Wednesday, October 21, 2009

Monty, Stallman, MySQL, Oracle, and Sun: Open Letter Wars

I've tried to confine my ranting about the current state of the Sun/Oracle/MySQL debates to my Twitter feed, but I think I need to do more than the 140 character limit allows.

Background On Recent Moves

In case you haven't been following the state of play, we've got two recent open letters sent to the EU competition commissioner: If you've been following either of my posts on the subject, you'll know I'm not a dispassionate observer in this matter, particularly where Mr. Widenius is involved.

Competition and Acquisition

First of all, let's directly address the core matter at hand, which is that Monty, RMS, and the various others appear to believe that the Database market is hopelessly consolidated and were Oracle to get its hands on the copyright to the MySQL source code that would be bad for competition.

This, to be honest, completely and utterly disregards the actual history of the database market, which has always been one of consolidation and benefits to the consumer:

  • Illustra, a Berkeley spin-out, was bought by Informix
  • Informix was bought by IBM
  • RedBrick was bought by IBM
  • RDB was bought by Oracle

While this consolidation has reduced the number of vendors in the market, as of 2007 there was still pretty hefty competition with Oracle even then only with a 44.1% share of the paid database market. As someone who has had to work professionally with Oracle, DB/2, Sybase, and Microsoft SQL/Server, I can say this is almost certainly because it's the best overall product.

Furthermore, those numbers in terms of the database revenue are completely suspect (with the exception of Microsoft's). There's a huge amount of revenue for IBM and Oracle which are tied to services and software sitting on top of the database (such as Oracle applications and IBM services), and realistically the CFOs of each company can tune the percentage of the deal that goes to the underlying database based on what numbers they want to report. The overall deal may be $1MM, but the sales person has a lot of discretion on how they price the database component.

Is there so little competition in the market that it's hurting consumers? Hardly. The recent squabble over Oracle's TPC-C pseudo-announcements indicates that the vendors actively compete with each other. Furthermore, the rate of feature expansion has been truly dramatic. Finally, the ability of firms like Vertica to rapidly jump into the market indicates that this isn't a market that requires significant levels of competitive concern on the part of regulators.

The technology industry is based on larger firms buying smaller ones. Competition authorities should rightfully be concerned only if it harms consumers in general, not whether it harms a particular subset of users.

But MySQL Is Special

With all due respect, no it isn't.

Let's consider the pseudo-market for Open Source databases. We've got:

And that's just considering the relational ones. When you consider the NoSQL movement as potential competitors (which I, for example, most certainly do), MySQL just isn't that special anymore.

While it is possible that an Oracle acquisition might be bad for MySQL consumers, it doesn't follow that MySQL is so special and perfect and pure that it harms any general category of consumers. While databases aren't perfectly replaceable, if someone found that Oracle's stewardship of MySQL was so onerous that they wanted to move off of it, it wouldn't be impossible to move to another database, either commercial or Open Source.

What that means is that you're in a classic case where the acquisition of a particular company might be harmful to consumers of that company's products, but it doesn't generically affect the market in a negative way. IBM and Microsoft will continue to compete in the commercial space, and PostgreSQL, Ingres, and LucidDB will continue to compete in the Open Source space. There's no net harm to consumers as a whole from an acquisition, even if the result of the acquisition was the complete shutdown of all commercial support for MySQL.

Oracle Is A Bad Acquirer

First of all, let's get the obvious out of the way: Oracle bought BerkeleyDB, and continued to enhance it; Oracle bought InnoDB, and continued to enhance it. At no point did they crush them to drive Oracle database revenues, or change the licenses, or stop forward momentum. So when you look at the actual track record of the company, they're in the clear.

But they might do, because they're an evil, scary corporation that MySQL turned down once before (from the Stallman piece):

Oracle made an earlier effort to buy MySQL in 2006, but the management rejected Oracle's offer, in part because Oracle would not disclose its plan for MySQL, and some members of the MySQL management team were concerned that Oracle was only acquiring MySQL to curb its advances in the marketplace.

I know a number of people involved with MySQL when it was an independent organization. While there were people who worried about that fact, senior management wasn't. More importantly, Monty was willing to sell MySQL to Oracle in 2006 for the right price. The use of the words "in part" there are telling, because the primary consideration that MySQL's senior management had wasn't some happy-clappy love for the Libre Software Movement, it was money.

I'm sorry, but I fail to see what's changed in between 2006 and 2009 except that Monty is a whole heck of a lot richer. Why in 2005 and 2006 were offers ultimately rejected from Oracle based primarily on money, but now Oracle is an evil corporation that can't be trusted with MySQL? Larry's the same guy he was then, Oracle has bought BEA but they don't compete in any way with MySQL, it's the same company. Why would Monty trust Oracle back in 2006 but not now?

Force Oracle to Sell MySQL

This is Monty's solution. And it's cunning. It's particularly cunning that he says repeatedly that the obvious Monty-connected acquirer, Monty Program AB, lacks the funds to do such a purchase. Again, a half-truth.

MySQL was worth $1Bn in early 2008. Since then markets globally have tanked, but MySQL has had some good commercial strength recently within the Sun organization. So let's conservatively say that it's still worth $1Bn. Let's then say that Oracle values the acquisition of Sun highly enough to let MySQL go for less, and do a 20% haircut to $800MM. Who's got that kind of money to acquire?

  • Microsoft. You think Stallman and Monty would be happy with that? No.
  • IBM. #2 in the database market. Erm, raises same issues that Oracle would.
  • Sybase has the market cap (super-recently) but not the cash.
  • Red Hat has the market cap, but not the cash.
  • Novell lacks the market cap and the cash.
  • Computer Associates has the market cap and the cash, but is the place technology goes to die. They also have Ingres to work with.
  • VMWare has the market cap and the cash and an acquisitive streak, but would MySQL really fit into their product strategy? I can see Spring driving people to vCloud, but can't even fathom the same kind of strategic benefit for MySQL.
  • Symantec has the market cap and the cash, but their storage work has been pretty solidly focused on backup and low-level storage these days.
It doesn't look to me like there are that many companies out there that could really buy MySQL in cash and make Stallman and Monty happy.

But you don't actually need to have the cash yourself: you can use private equity money. It's happened before: BEA was funded by private equity originally to consolidate the Tuxedo market. That's why Monty's protestations ring hollow: his statement is explicitly "we don't have the money." But I think he could probably come up with it, and if he doesn't, then he needs to work with better financiers.

Finally, let's assume that Oracle really wants the rest of Sun, and considers carefully Monty's open statement that Sun is hemorrhaging $100MM of cash per month. Wouldn't it make sense for Oracle to actually just donate MySQL to pretty much anybody to make the EU issue go away? Oh, and lo and behold, Monty has two of those ready to go: Monty Program AB, and the Open Database Alliance.

To me, the current situation amounts to blackmail: we'll keep blocking your acquisition of Sun until you do what we want.

Consider The Sources

So let's look at the motivations of the major current players.

Stallman is irrelevant to any commercial discussion. His press release essentially says "I don't like the GPLv2 anymore, even though I wrote it, and it would be better if MySQL was under the GPLv3." Tough. Furthermore, RMS has no commercial experience of any kind. I fail to see how someone who has never even worked for a profitable commercial enterprise could be considered knowledgeable about how an acquisition would affect the marketplace in an anti-competitive way that harms consumers.

Furthermore, RMS' press release completely belies his previous positions regarding the possibilities for commercialization of GPL projects. He's stated in the past that offering dual licensing is only one of many ways that you can make money with the GPL being the dominant licensing model. Why all of a sudden does he believe that this is the only possibility for MySQL? Why is he so adamant that without that ability, there's no ability to derive commercial revenue from MySQL?

Monty has been slinging FUD about this acquisition for months. He was such a disruptive element inside Sun that they released him from his Non-Compete just to make him go away. Given that he's an extremely rich, disgruntled ex-employee and project founder, he has personal reasons and financial ones (under the Monty Program AB umbrella) to cause as much disruption to this deal as possible.

I've said it before and I'll say it again: Monty has been playing a long game here, and I think he'll be obstructive to any potential move that Oracle would make with MySQL until the IP is under his control.

Personal Opinions Should Not Drive Competition Policy

Ultimately, you can sum up the entire argument against the Oracle/Sun acqusition due to the MySQL situation as:
  • We don't like Oracle owning the MySQL IP
  • Therefore, don't let Oracle own the MySQL IP
Unfortunately, saying that you personally dislike something doesn't provide a valid reason to block an acquisition on competition grounds. Saying that you don't trust Oracle doesn't alter the marketplace in a way that disadvantages customers as a whole. Saying that nobody else could make money by selling commercial licenses for MySQL doesn't mean someone else must be allowed to.

The moment the MySQL founders, who have been handsomely rewarded, took VC money they turned MySQL from being a hobby project/company, and into a major technology company and an asset. The change happened years ago, it's just that they're only starting to wise up now.

But it's happened. It's done. It's no longer anybody's pet project; it's an asset that can and should be used by whomever is willing to pay the most for the IP. As a customer, under the GPLv2, you still have rights, including the right to fork. But don't go whining that a company that made massive amounts of money for its shareholders by commercializing a technology is no longer under your control.

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