The Open Road

Neelie Kroes

(Credit: European Commission)

IBM and Hewlett-Packard could not have planned it any better.

The European Union has launched an in-depth investigation into Oracle's acquisition of Sun, potentially delaying the merger by several more months. In doing so, the EU is actually guaranteeing the demise of Sun's hardware business and gifting it to Sun's competitors by misunderstanding the deal's impact on open source, generally, and on MySQL, specifically.

If you haven't been paying attention, the delay on the merger due to U.S. and EU scrutiny has already resulted in two shockingly bad quarters from Sun. Many enterprise customers are already moving to competitors like IBM because of the uncertainty surrounding the future of Sun products, The Wall Street Journal reports.

Further delay will only compound the problem.

Unlike the U.S., which approved the deal, the EU's Competition Commissioner Neelie Kroes is concerned that Oracle's takeover of Sun will end up diminishing competition:

Systems (like MySQL) based on open-source software are increasingly emerging as viable alternatives to proprietary solutions. The Commission has to ensure that such alternatives would continue to be available.

The Commission doesn't have to. MySQL's open-source license already does. It's open source: even Oracle can't put the open-source genie back in the bottle once it has been released, as MySQL has, under the GNU General Public License.

Consider: some of the folks cheering loudest for the EU to clamp down on the proposed merger, like representatives from Monty Program, have already demonstrated Oracle's (and Sun's) lack of control over MySQL. Monty Program has created a significant fork, or derivative, of the MySQL database, and stands to gain much by the EU's obstructionism.

In delaying the merger, the EU isn't helping MySQL. It's helping its competitors, including Drizzle, OurDelta, MariaDB (Monty Program's fork), Percona, etc.

Competition within and around MySQL is alive and well, regardless of Oracle. After all, as former MySQL CEO Marten Mickos has been saying for years, MySQL has never really competed with Oracle, anyway. MySQL serves (and has helped to create) a very different market: the Web database market.

When asked in April if Oracle's bid for Sun would end up hurting MySQL, Mickos responded: "MySQL works for Web-based applications. Oracle is for older, legacy applications." The vast majority of Oracle's revenue comes from enterprise IT. The vast majority of MySQL's revenue comes from Web companies like Facebook, Google, etc.

MySQL and Oracle don't really compete. They live in two very different markets.

So, if anything, Oracle's acquisition of Sun helps it leverage MySQL into a market--the growing Web database market--that its own technology is ill-equipped to manage. It also gets a lower-cost product with which to bludgeon its real enemy, Microsoft, coupled with a greater footprint in the rising open-source developer community.

Open source is not the enemy in this deal. Microsoft is.

The EU, however, has made itself an enemy to Oracle, Sun, and MySQL by holding up the merger, a situation that will only get worse due to its glacial pace, as CIO.co.uk's editor Martin Veitch suggests. Customers are not the beneficiaries of its intervention: Sun's server competitors like IBM are.

Though the EU purports to be in tune with open source, its meddlesome muddling reveals a surprising ignorance of open source, and shows a complete disregard for MySQL's true market opportunity.

UPDATE @ 6:59 Pacific on 9/4/09: I solicited comment from Gartner vice president and Distinguished Analyst, Donald Feinberg, who had this to say:

The EU does not understand open source. This is clear by using DBMS (MySQL) to extend the deadline. It also is clear that this is an attempt to use MySQL as a cover-up to a political agenda. It is protectionism at its worst.

The EU is entering deep water here, water that it clearly does not adequately understand.

Follow me on Twitter @mjasay.

Damned if you do. Damned if you don't.

That's the message coming out of the European Commission as it grumbles about Microsoft's decision to strip Internet Explorer from OEM and retail versions of Windows 7 in Europe, as CNET reports.

The EU wants Microsoft to bundle a range of competing browsers with Windows 7. Microsoft, apparently in an act of defiance, said "Let them eat cake!" and is offering no browser at all.

Before you join the EU's protest, however, consider that this could well be Mozilla's best chance to increase its 31.1 percent market share in Europe.

Microsoft's Dave Heiner indicates that it will "offer (IE) separately and on an easy-to-install basis to both computer manufacturers and users." For such people, Firefox will be as hard (or easy) to get as before.

But what about those left without a browser? As Mike Shaver, Mozilla's vice president of engineering, articulated to me, most people download Firefox...using IE, which means leaving them browser-less (even without IE) is tantamount to cutting off their access to Firefox.

I disagree.

Mozilla has done a masterful job of marketing itself. From Asa Dotzler's early Spread Firefox campaign to its campus representatives, Mozilla rightly earns kudos from Advertising Age:

Mozilla competes against Microsoft, Apple and Google -- arguably the biggest and most valuable brands in the world -- and it succeeds with no traditional advertising (or big budgets) to speak of.

How? It's the community, stupid. In a ground war--that is, in a war of foot soldiers and hand-to-hand combat--I think Mozilla would beat IE. When your neighbor in Colmar, France, complains about her lack of Internet access on her new PC, are you going to install Firefox or IE for her? I'm guessing that Mozilla's army of enthusiastic community volunteers would be over in seconds with a Firefox-laden USB stick.

In fact, I can see the Firefox community taking up residence outside retail computer shops, offering to install Firefox. I can see the same community figuring out clever ways to add Firefox installation to other programs, giving Mozilla the same inside track on installations that Microsoft presumably will have.

Necessity is the mother of all invention, and it may well prod Mozilla's community to get deeply engaged in proselytizing and distributing Firefox in ways far beyond what it has hitherto done.

Sure, Microsoft's tactics (providing easy FTP access, etc.) will give it a healthy handicap in the competition, but community, not government, could make this one of Mozilla's single-best opportunities to leapfrog IE in Europe.

For those that like the idea of government and community helping Mozilla, just remember, as these Wall Street Journal readers do, that the hand that feeds today can quickly become the hand that takes tomorrow. What happens when Firefox gets too big for the EU's comfort? Will it coddle Opera into a competitive position next?

Even so, Mozilla's Shaver suggests a valid concern, noting that "if it takes a non-profit with a global community to overcome the (browser market's) barriers,...the market is fundamentally non-competitive." He may be right.

But that's not the question for me because I think government involvement here can end up hurting the market as much as it helps it. The question is whether Mozilla could win this war through superior marshaling of community ground forces. I think it could. Do you?

Update @ 12:45 PT: Mozilla CEO John Lilly offered this statement on Microsoft's actions in Europe:

It's impossible to evaluate what this means unless and until Microsoft describes -- completely and with specificity -- all the incentives and disincentives applicable to Windows OEMs. Without this it's impossible to tell if Microsoft is giving something with one hand and taking it away with the other, and more to the point, it's impossible to tell whether this does anything more than change the technical installation process of the OEMs and make life more difficult for people upgrading to Windows 7.

It's a good point. Microsoft's decision to remove the browser completely could well be a sneaky way to try to undermine the European Commission's case, and may have the effect of making the OEMs push Microsoft and Google bid against each other for inclusion.

In other words, same ol' same ol'. Microsoft will undoubtedly offer financial incentives, documented or not, to OEMs to include IE. In a fair fight Mozilla wins. But Microsoft doesn't have much incentive to fight fairly...unless forced to do so.

Follow me on Twitter @mjasay.

As reported by CNET, Mozilla has been granted "third-party status" in the European Commission's antitrust case against Microsoft. This gives Mozilla a bird's-eye view of the proceedings, with the ability to raise objections.

Mozilla, however, will be unlikely to raise its objections any louder than Mozilla chair Mitchell Baker already did on her blog:

I've been involved in building and shipping Web browsers continuously since before Microsoft started developing (Internet Explorer), and the damage Microsoft has done to competition, innovation, and the pace of the Web development itself is both glaring and ongoing.

There are separate questions of whether there is a good remedy, and what that remedy might be. But questions regarding an appropriate remedy do not change the essential fact. Microsoft's business practices have fundamentally diminished (in fact, came very close to eliminating) competition, choice, and innovation in how people access the Internet.

So what to do about the problem? Baker is careful to avoid putting forward a suitable remedy, but Firefox architect Mike Connor doubts that forcing Microsoft to bundle rival browsers like Firefox and Opera would be the right outcome. For a lot of reasons, I agree.

As Connor points out, Firefox has managed to achieve 20 percent market share against Microsoft, as measured by Net Applications, despite Microsoft stacking the deck against competition by bundling its own Internet Explorer (IE) browser with Windows.

It has achieved this in part by partnering with Google, and in part by creating a browser that is significantly better than IE in terms of performance, security, extensibility, and just about any other metric, including price (IE is not free--it requires the purchase of Windows to use it or an emulation technology like WINE).

Yes, Baker correctly points out on her blog that Firefox may well be the only example of forcing Microsoft to retrench after it has staked its claim to monopoly market share, but this doesn't obviate the fact that Firefox has, in fact, taken 20 percentage points from Microsoft's share.

Firefox doesn't need an EU handout. It has the market share to prove it. What it does need is expanded partnerships with other consumer technology companies that can introduce it to consumers. Google was perhaps the first, but why not Apple (assuming someone can convince Apple to stop wasting development cycles on Safari)? Or Amazon/eBay/Craigslist (perhaps an optimized shopping experience with Firefox)?

Government is not the answer, as Ars Technica's Ryan Paul opines:

The popularization of the open source development model arguably emerged as a response to Microsoft's monopoly. Developers had to find innovative ways to compete with an entrenched product. If the government had intervened in the software industry at an early stage and those conditions hadn't existed, the browser market could arguably be a lot less rich and competitive than it is today.

It's risky to let the government perpetually equalize the market, because sometimes the greatest innovations appear when inventors have to face tougher odds.

Firefox is disruptive. Force-feeding customers to use it through government fiat is Microsoft-esque, and will be the wrong path for Firefox. Firefox doesn't need favors. It just needs disruptive new routes to market, similar to what it has done with Google and its Get Firefox campaign.

Follow me on Twitter at mjasay.

Just when I think the freedom brigade is on a roll, I read nonsense like this from the European Union, as reported in Ars Technica, suggesting that the EU is considering extending copyright terms by 45 years in order to guarantee income for aging artists. US entitlements like Medicare having nothing on this....

Every few years the US extends copyright terms because Disney lobbies the heck out of Congress' weak-kneed legislators to prevent Mickey Mouse from becoming public domain. After pilfering the commons for the basis of much of its revenue (Beauty and the Beast, Cinderella, and even, perhaps, Mickey Mouse), Disney keeps going back to the congressional well to ensure its God-given right to make money on old intellectual property forever and ever.

But that's the US. I would have hoped that the EU would show a bit more common sense. Alas! Its proposal completely fails to solve even the problem it sets out to fix, as Open Rights Group notes:

"The Commission makes much of the challenging financial situation facing aging performers," it says. "While we do not accept that IP law is an appropriate mechanism to deal with this situation, as we will demonstrate in the second section of this submission, it also turns out to be a very inefficient one."

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It's perhaps not surprising that the European Union, while long attempting to remain neutral on open source, has finally come out to suggest that it will favor open source. Like the US Navy, the EU recognizes the value in open source and open standards:

For all future IT developments and procurement procedures, the Commission shall promote the use of products that support open, well-documented standards. Interoperability is a critical issue for the Commission, and usage of well-established open standards is a key factor to achieve and endorse it.

Undoubtedly Steve Ballmer will be on a plane within days to try to hector the EU into ceding its sovereignty to Microsoft again. (Btw, Ballmer beat the pulpit at Accel's recent CEO day, accusing open source of stealing Microsoft's intellectual property. This man dearly needs to get a life...and a clue.)

I read this article on European Commission chief Neelie Kroes last night, and Tuesday morning woke up to news that the European Union is set to levy even more fines against Microsoft. Why? According to Bloomberg News:

European Union regulators may fine Microsoft Corp. for failing to comply with a 2004 antitrust order to charge "reasonable" fees for patent licenses on operating system software, three people familiar with the matter said. The fine may be announced as soon as February 27, said the people, who declined to be identified because the decision isn't public. Microsoft said in a January 24 U.S. regulatory filing that the penalty may be as much as 1.5 billion euros ($2.2 billion).

Wow. I continue to believe that the industry is able to take care of Microsoft by itself. Ms. Kroes and the European Commission are fighting yesterday's battle, while open source and SaaS are already winning today's battle against Microsoft, step by step.

I don't believe in victory by government fiat. I believe that markets--that competitors--are more than capable of toppling Microsoft's lard-laden dominance of 20th-century markets. Open source doesn't need the European Commission's help. I won't say "no" to Ms. Kroes taking a few billion from Microsoft's bank account, but we don't need it to win.

Red Hat wasn't impressed by Microsoft's pledge to open up its APIs and protocols. This isn't surprising. More surprising, however, is the EU's dismissal of Microsoft's announcement:

The commission would welcome any move towards genuine interoperability. Nonetheless, the commission notes that today's announcement follows at least four similar statements by Microsoft in the past on the importance of interoperability.

The devil is always in the details, but it is the European Commission and the open-source community pushes Microsoft to live up to its pledge that it will do so...kicking and screaming at times, no doubt. Still, I'm cautiously optimistic that it can be prodded toward that end (and that there are people within Microsoft who would love to get there sooner rather than later).

It's ironic how different Europe can be from the United States. While the U.S. continues its mindless rampage against the future of digital distribution with DRM, RIAA, MPAA, and other acronyms designed to stuff the 21st century back into the 20th century's ideas of how to package and sell property, Europe is actually investing in that future. To be exact, it's putting $22 million toward peer-to-peer technology, in a BitTorrent-minded project called P2P-Next.

Surely European broadcasters are against the move, right? After all, research suggests that 50 percent of those using BitTorrent are doing so to steal TV shows. As one TorrentFreak blogger noted, however, European broadcasters believe this situation presents an opportunity rather than a threat:

One of the biggest names taking part is the BBC, who will use the new BitTorrent client to stream TV programs. Other partners in the P2P-Next project are the European Broadcasting Union, Lancaster University, Markenfilm, Pioneer Digital Design Centre Limited and VTT Technical Research Centre of Finland. The main goal is to develop an open source, BitTorrent-compatible client that supports live streaming.

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In what now appears to be a near daily experience, the European Union is investigating Microsoft for antitrust violations related to its attempts to get its Open Office XML file format standard accepted as an international "standard." As the argument goes, Microsoft apparently fought hard to get OOXML ratified as a standard.

Ya think?

European Union antitrust officials have asked Microsoft for information about its activities in the standards-setting process -- an early step in an investigation -- and are stepping up scrutiny of the issue, according to people familiar with the matter. The file format in question is computer code that describes how a document such as a letter or spreadsheet is digitally stored.

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