European Concerns About

Oracle Acquiring Sun's MySQL

Florian Mueller
EU Policy Strategist
Adviser to Monty Program Ab
(a company founded by MySQL's creator)

Press conference in Silicon Valley 10/26

Analyst briefing in New York City 10/27
 Florian Mueller Background
Part I
● 1985 (age 15): articles for computer magazines
● 1986 (age 16): youngest computer book author
● 1987-1998: consultant and representative
● focus on licensing and distribution partnerships
between Californian and European companies
● Berkeley Softworks → GeoWorks (traded as GWRX;
„outperformed every other geographic market incl US“)
● Knowledge Adventure (Bill Gross, Steven Spielberg)
● Davidson & Associates (traded as DAVD), acqu by CUC
● Blizzard Entertainment: Warcraft II became #1 in
Germany, first time for Blizzard to top a sell-thru ranking
 Florian Mueller Background
Part II
● 1996-2000: founded, managed and sold startup
● 2001-2008: MySQL
● First meeting (March 2001) in co-founder's kitchen
● 2001-2004: Adviser (on strategy matters) to the CEO
● From 2004 on: Shareholder
● 2004-2006: patent policy campaigns consistently
supported by MySQL (and additional sponsors)
● Multiple awards and nominations to rankings
(Economist/European Voice; Managing IP; CNET etc.)
● 2007: Real Madrid CF, EU competition policy
● Often interrupted: own development project
Role in Oracle/Sun/MySQL Process
● No involvement with US DOJ process
● Mid-August: authored position paper, helped
with questionnaire replies and EC conf call
● Then focused on own project again, but stayed
in contact with Monty Program on friendly basis
● Announcement of new involvement: last week
● Information effort in response to misinformation
● Involvement with processes in other
jurisdictions possible, not always announced
 MySQL: new market disruptor and
low-end disruptor
● New market: dynamic web pages
● Code base geared toward data warehousing,
strenghts/weaknesses profile good for web
● Linux, Apache, MySQL, PHP/Perl: LAMP stack
● Non-transactional until 2001 → storage engines
● SAP technology partnership in 2003 (SAP DB)
● Version 5.x tree (2005-2009): stores
procedures, triggers, views, information
schemata, cursors, XML...
● MySQL Cluster real-time carrier-grade DB
Low-end disruptor MySQL
(chart downloaded from Wikipedia, author: Megapixie)
 Competitive Situation
● General-purpose vs. single-purpose databases
● Cross-platform vs. single.platform databases
● Lock-in: DB switching costs only justifiable for
fundamental cost savings over time
● Open source: MySQL strong community AND
commercial following, no competitor has both
● Migrations, design wins, price competition
● Functionality, reliability, scalability, credibility
● Competing across all segments, synergies
 Destruction Ratio
● Then-CEO Mårten Mickos according to Forbes
(February 2004):
● „Software has been overglorified for 20 years. You've
been able to overcharge for underperforming software“
● mission: „turning the $10-billion-a-year database
business into a $1 billion one“
● Internally: „for every $10 of Oracle revenue that
we destroy we make $1 of MySQL revenue“
● Construction value = $1 billion to Sun
● Destruction value from Oracle perspective = ...
Company (Not Community) Project
● Intellectual Property Rights (IPRs) of the core
(database engine and other key elements)
created or acquired by company
● Testing and word-of-mouth most important
community contributions, plus smaller tools
● Further innovation of complex DB engine (core)
requires significant # of full-time developers
● IPR comparison with Red Hat: MySQL brand
vs. not owning Linux brand; core vs. fringe
 Revenue Model
● 10%: professional services; not too scalable
● IPRs allow higher prices, lower marketing costs
● 90%: dependent on non-open-source licensing
● Dual licensing – same codes different rights/oblig's:
– embedding of MySQL code into other products not bound
to „share-alike“ obligation of Free Software GPL;
– „quid pro quo: if you are open source, then we are;
if you are commercial, then we are, too“
● Subscriptions (MySQL Enterprise):
– MySQL + proprietary tools linked to professional services
– Non-open-source tools are the essential differentiator
 Forking: Legal But Not Viable
● Fork vendor needs to establish a new brand,
difficult to find any such success story ever
● Dual-licensing only a possibility for IPR owner
● Subscription business would lack differentiation
● Developing alternatives to proprietary tools would
take time/$ and the result would
– either have to be open source (thus no differentiation)
– or depend on a commercial license from IPR owner
● Effectively, multiple forks would compete for
only about 10% of the opportunity (services)
 Only divestiture sustains
virtuous circle
● IPRS
● → revenues
● → development (company, not community)
● → more IPRs and all over again
● Monty: „different home than Oracle, a home
where there will be no conflicts of interest
concerning how, of if, MySQL should be
developed further“
 Behavorial Remedies and
Oracle Promises Not Helpful
● FAQ in April: MySQL just addition, no details
● Statements on R&D investment only deep into
phase II of EU regulatory process
● R&D promises don't mean effective competition
● Regulators prefer structural over behavioral
remedies
● Oracle won't be the turkey that votes for Xmas
● Only separate commercial entity will use
MySQL to compete with Oracle ever more
 EU Process
● Phase I decision: EC press release (3 Sep)
didn't mention any other area of concern
● Phase II: deadline for EC decision (unless
extended by 15, 20 or 35 days): 19 Jan 2010
● EC will need to decide soon (if it hasn't already)
whether it issues Statement of Objections
● EC spokesman reproached Oracle for failure to
act constructively
● Oracle can end process anytime with remedies
 Thank you!

For further information:

florian.mueller@live.com