Is it kill or cure for Oracle's database buy?

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That said, Oracle's multibillion-dollar database business is still growing . Like its primary competitors IBM and Microsoft, it has lowered prices and created low-end versions to appeal to developers and smaller organizations. Analyst and industry executives say those moves are partly in reaction to the low cost to businesses of acquiring open-source products.

"More and more, larger software vendors are beginning to realize that if they lose bottom of market, they may never get the top," said Winston Damarillo, the CEO of venture fund Simula Labs, which has launched Gluecode and other businesses built around open-source software. "MySQL is threatening Oracle not in absolute dollar terms, but in mind share."

"More and more, larger software vendors are beginning to realize that if they lose bottom of market, they may never get the top."

--Winston Damarillo, CEO, Simula Labs

Like all entrenched companies, Oracle has to walk a fine line: It needs to embrace popular open-source software without cannibalizing its own established businesses, analysts said.

IBM has been one of the most aggressive companies in embracing open source. It purchased Gluecode, a maker of open-source Java application server software, and intends to make Gluecode products available to smaller customers and offer them an upgrade to its WebSphere line.

In its middleware business, Oracle, too, has been steadily warming up to open-source products. The company said the next version of its Oracle Application Server suite will work with open-source development frameworks, such as Spring and Hibernate (as well as with IBM's own middleware).

Although it has been cagey about its plans, Oracle could use the Innobase acquisition to dip its toe into open-source database waters, Redmonk analyst Stephen O'Grady noted.

"They could attempt to monetize (open source) through MySQL by owning a component that MySQL depends on. Or they could use it from a competitive stand point to hurt them," O'Grady said.

O'Grady added that because of the acquisition, some developers may be drawn other open-source databases, such as PostgreSQL. But because the MySQL database is widely used, the company will likely rebound from any short-term competitive hit it may take, he said.

Meanwhile, the founder of Innobase, Heikki Tuuri, is carrying on. He's no stranger to Oracle, though, having first visited with company executives in 1999.

"It's business as usual," said Tuuri, whose new title is vice president of server technologies at Oracle. He will continue to work in Helsinki.

Customer cares
Oracle's acquisition of Innobase has raised concern among some MySQL customers.

"Oracle just bought themselves a whole lot of leverage with MySQL AB and a talented team of database engineers to boot," Jeremy Zawodny, an engineer who does MySQL support at Yahoo, wrote in a recent blog posting.

Zawodny suggested that Oracle could "put the squeeze" on MySQL corporate customers by reneging on or changing the terms of the contract between MySQL and Innobase. However, Phillips did tell Mickos he would renew, and Mickos said that MySQL has "broad rights" to continue serving its InnoDB customers. The deal between the two companies ends in about a year.

"The contract is such that even if you imagine the worst--that it doesn't get renewed for whatever reason--we have a long term until it terminates, so we'll able to continue for a long time. And we have a right to serve our customers perpetually," Mickos said.

In theory, MySQL could take the InnoDB code, which is available under the GPL, and continue development of the technology itself. It can also steer customers to other storage engines.

Overall, the Oracle buy serves as a cautionary tale for upstart companies that rely on important third-party products, whether they be open-source or not .

"There was a flaw in MySQL's business model," Lubet said.

SAP?

I haven't seen any articles that mention the effect of this on SAP's partnership with MySQL.

Seems like an obvious reason for Oracle to buy InnoDB.

[Too Old For IT]

Buy to Kill

It would be a good way to force thousands of open source database users on to Oracle, and feed Larry Ellison's certified meglomania.

SAP?

I haven't seen any articles that mention the effect of this on SAP's partnership with MySQL.

Seems like an obvious reason for Oracle to buy InnoDB.

[Too Old For IT]

Buy to Kill

It would be a good way to force thousands of open source database users on to Oracle, and feed Larry Ellison's certified meglomania.