How Bad is the Oracle-Sun (MySQL) Deal For the Database Market

Since Oracle’s buyout of Sun Microsystems, many have expressed concerns about the future of MySQL open source database management system. Recently, things got to another level when the European Commission opened an in-depth investigation into Oracle’s takeover of Sun Microsystems, having ’serious concerns’ about its effect on the database market. EC states that Sun reported 31% sales drop in Q2 compared to same quarter in 2008. My opinion is very aligned with that of the EC, because monopolies and oligopolies are known to be bad for the industry, which includes customers and suppliers. Moreover, companies that are in strong market position do not have enough incentives to innovate, mostly because of the cost related to technological switching for customers. For example, a client that has invested vast sums of money in terms of license, training and service fees of a certain product will have to cash in from its investments before it considers switching to another more innovative product. If the benefits for switching is not enough to cover the cost of adopting the new product, then the client will have to stick to an inferior product that it has already invested in. Oligopolies, who are aware of this, are not encouraged to innovate because chances of attracting a client that has already adopted competition’s product are slim.

In this particular case (Oracle owning MySQL), things are even more frightening. If we look at Oracle’s product line, we could say that MySQL database is in competition with Oracle 11g Express Edition because both product are free of charge. Well, the comparison stops there since the limitations of 11g Express Edition make it more a trial version of 11g Standard or Enterprise. On the other hand, MySQL is an end-to-end product and many industrial size project are deployed on it. Now, knowing that 11g is Oracle’s bread and butter, it is indeed quiet concerning for MySQL. The real question is: how can the takeover wizard can integrate MySQL into its product line? Will Oracle management be able to keep key staff members so that it can compete in the MySQL support and services market?