EU's MySQL inquiry may backfire for open source

It takes time, leadership, and a fair amount of luck to successfully build an open-source community. It also takes money. Lots of it, if IBM's $1 billion commitment to Linux is any indication.

Unfortunately, the return on such open-source community investments may be permanently scuppered by the European Commission's misguided defense of MySQL from Oracle's intended acquisition. If the EC is going to punish successful open-source endeavors like MySQL, will investors still clamor to finance the rise of open source?

In many ways, MySQL is the quintessential commercial open-source success story. On the financial side, MySQL managed to build a vibrant business, doing north of $90 million at the time of its acquisition by Sun Microsystems in February 2008.

Equally compelling, however, is the exceptional user and developer community that formed around the open-source database project, registering tens of millions of downloads and a massive developer community.

This community augmented MySQL's financial fortunes, of course, but it also protected MySQL database users from the whims of the company, as former MySQL CEO Marten Mickos wrote to European Competition Commissioner Neelie Kroes:

Even if Oracle for whatever reason would have malicious or ignorant intent regarding MySQL (not that I think so), the positive and massive influence MySQL has on the DBMS market cannot be controlled by a single entity - not even by the owner of the MySQL assets. The users of MySQL exert a more powerful influence in the market than the owner does.

Unfortunately, the EC seems intent on punishing MySQL--both community and company--for its success. Already the MySQL database project has started to fracture into competing forks, while business rivals like EnterpriseDB and IBM collect confused customers.

More worryingly, the EC's actions may end up diminishing potential returns to investors in other open-source projects, particularly those that take the added time and cost to build global communities.

Technology mergers and acquisitions activity is at a 20-month high. Open-source companies, however, may miss out on this resurgence, particularly those, like Acquia and EnterpriseDB, that build on successful open-source communities (Drupal and Postgres, respectively).

Indeed, based on the EC's actions, perhaps the worst thing these companies could do is foster successful open-source communities. Maybe they should just take the cash and run?

Consider: the EC didn't challenge Yahoo's acquisition of Zimbra, VMware's acquisition of SpringSource, Citrix's acquisition of XenSource, etc. What do they have in common? Rising revenue but, except in the case of SpringSource, much more limited communities than MySQL. (Even the Spring community pales in comparison to MySQL, impressive though it is.)

Granted, the major difference with Oracle/MySQL is that the two are ostensibly competitors, as CNET points out. In the letter referenced above, however, Mickos dismisses such competition. The reality is that MySQL and Oracle compete in two different database markets.

Regardless, as well as MySQL was doing, $90-plus million is spare change in the global database market. The EC, in other words, isn't trying to protect MySQL's business. It's trying to protect MySQL's community.

Such mollycoddling of an open-source community is destructive to all future investments in similar endeavors. Why should commercial entities bother fostering community--the very community that makes them less susceptible to hostile takeover and anticompetitive forces--if doing so simply ends up ruining financial returns?

The EC means well, but it is not doing the right thing for MySQL, its community, or other open-source commercial efforts. Quite the opposite. Just as the commercial open-source community has been pondering a move back to community-controlled open source, the EC threatens to hobble the shift.

The EC may well end up with less competition, not more, by blocking Oracle's proposed acquisition of Sun and its crown jewel, MySQL.

[shmariam]

I think you have to look at the total cost of investment for the MySql community. Not just the revenue of the parent company. The other issue which is most important is the way Oracle acquistions have gone in the past. I think this merits for the EU inquiry.

Success != 90 million dollars. While you may claim that is a runaway success for open source, it is in the real world a pittance and cannot be used to justify the amount of investment put into creating that product.

[pentest]

What planet to you live on where $90 million a year is not being successful. 99.9% of all companies would kill for those kinds of numbers.

[SIGHUP]

Can the EC block Oracle's acquisition of Sun? I thought all they could do is fine them?

[pentest]

Matt,

It is amazing how little you understand about open source. it is the community that drives projects, not corporate investment.

[ehabbash]

100% agree :

it is the community that drives projects, not corporate investment.

[tonybain]

Not always. I beleive over the last few years little core MySQL development has occurred in the community, most has happened in house at MySQL/Sun. Monty is now trying to reverse this with his Maria project but since 2003 or so I was told community involved had been steadily decreasing.

[odubtaig]

Didn't you know? His new hobby's flogging a dead horse. By applying the same rules to this merger as it would to a merger between any two large corporate entities in the same general field the EU is apparently 'killing' MySQL. Oh, and despite Red Hat's ongoing status as King of The Hill their pure-play attitude towards open source is stupid because none of their substantially less successful competitors such as Novell, Xandros et al are doing it.

[odubtaig]

Thinking about it, I'm just waiting for the point at which Matt slides so far in his point of view that he abandons all open source software, declares it all to be inferior and gets a job at some purely proprietary company. How anyone can argue 100% from a monority position that pure proprietary software has had it and it's only a matter of time before all companies will be doing it as soon as they wake up and at the same time write "if pure play open source was such a good strategy everone would be doing it" with regards to Red Hat without _any_ irony is beyond me.

[henchan]

If Sun or Oracle had bought Red Hat there would not be an existential threat to the Linux community.
The take-away for up-and-coming open-source communities might be to keep the core platform and commercial distributions at arms length from one another. Reasonably anticipate investigation when the former changes ownership, but not when purely a commercial play.
If the politicians don't get Marten's point and Oracle really needs them to move quicker Oracle might help their case along by proposing a division of the MySQL asset, such that key technology gets ring-fenced. Unnecessary but expedient.

[tajikar]

To SIGHUP, Oracle's CEO Ellison said back in May that the merger was contingent on EU approval so I assume it is written into their agreement with Sun.
Certainly Matt makes a case for mySQL, as an Open Source investment, suffering from the protracted US and EU reviews. I'm not sure that this is the real issue in this case. My concern would be Ellison's intent with the Sun aquisition? In his recent response to the EU he claims that Microsoft SQL competes against mySQL. There is a lot of speculation to the effect that he plans on using mySQL for this purpose. I work as a web designer and I find little competition between mySQL and Microsoft. My larger clients use Microsoft or Oracle because they need a more robust platform whereas my smaller clients use mySQL. Oracle may not be as interested in mySQL as an open source project as using it as a commercial product to compete more effectively against Microsoft. Oracle just delayed the realease of other open source software and it has been suggested that this may be a ploy to keep adoption of the open source version to a minimum. I don't think that Oracle is really that commited to Open Source, it's more likely lip service to get the merger through.

[JBBBBR]

Matt, nice work on finding a new angle but missed the fundamental point. The EU is investigating the world's largest (and most expensive) database company, purchasing the world's most popular open source database company. If one company has such control of the market, what damage could that do to European companies? That is what they are investigating.

If another large IT company bought MySQL (e.g. Sun), there wouldn't be a problem. You are jumping at conclusions if you think investors and users will abandon open source over this. It is a fast growing segment.

[Matt Asay]

I'm suggesting that would-be buyers are going to factor community into future M&A activity and this hold-up on MySQL makes community-building much less attractive from an investment perspective.

Would the EC block IBM? Probably. How about Red Hat? Wouldn't owning too much of the stack be tantamount to an open-source monopoly? Etc. The EC needs to back off.

[pentest]

The EC is doing its job, I understand you are a businessman and thus are motivated solely by greed and undereducated, but for someone who claims to understand OSS and the business of OSS you miss the boat on nearly a daily basis.

Have you figured out that OpenGoo is using the same model as your lame company yet?

[paulbee1958]

@ pentest, temper temper.

Everyone who was gloating at EU fines on Microsft and Intel, welcome to the brave new world of Centralised command and control

[LtBiggles]

As a Sun Software employee (not MySQL team though), this is one of the best blogs about this situation. Yesterday, I had to say farewell to three of my fellow Sun employees as reductions continue while we wait for Neelie Kroes to even tell us exactly what her complaint is.

Sun has led in growing open source software. What almost everyone is missing is the monetary reward for the owner of the assets is not the assets themselves, they are available for free, but the support purchased by business customers who need it to put the asset into production. Small 15 man firms cannot provide that level of support. Sun/Oracle can. And such support will permit the overall community to survive and thrive.

Too bad the EC's Neelie Kroes has it completely wrong. Three people I know just lost their careers because of her misunderstanding.