Business Tech

The European Commission on Monday formally dug in its heels over Oracle's planned acquisition of Sun Microsystems, but Oracle accused the regulatory body of "profound misunderstanding" in a rebuttal that declared its intention to fight the opinion.

The regulatory body issued a statement of objections about the merger, according to a Securities and Exchange Commission filing from Sun Microsystems. The open-source MySQL database software is the sole issue of concern in the matter, Sun said in the filing.

"The Statement of Objections sets out the Commission's preliminary assessment regarding, and is limited to, the combination of Sun's open source MySQL database product with Oracle's enterprise database products and its potential negative effects on competition in the market for database products," Sun said in the filing.

Oracle, though, fired back immediately, saying the objection "reveals a profound misunderstanding of both database competition and open-source dynamics." And indicating that other technologies are in limbo during the European deliberations, Oracle said, "Oracle's acquisition of Sun is essential for competition in the high-end server market, for revitalizing Sparc, and Solaris and for strengthening the Java development platform."

Meanwhile, the U.S. Justice Department reiterated its stance that the acquisition isn't anticompetitive. But given the gulf between Oracle and EC perspectives and Oracle's unwillingness to spin the MySQL software group off, it appears the matter won't be resolved soon.

MySQL is open-source software, meaning anyone may see, modify, and distribute the human-readable source code that underlies the software package computers actually run. Oracle's core database product is proprietary, meaning they don't grant those freedoms. MySQL is used widely at Facebook and Google among other companies, and competes to some extent with Oracle's existing products, arguably indirectly by expanding into newer markets to which Oracle's software isn't as well-suited.

Oracle castigated the commission in its statement:

It is well understood by those knowledgeable about open source software that because MySQL is open source, it cannot be controlled by anyone. That is the whole point of open source.

The database market is intensely competitive with at least eight strong players, including IBM, Microsoft, Sybase and three distinct open-source vendors. Oracle and MySQL are very different database products. There is no basis in European law for objecting to a merger of two among eight firms selling differentiated products. Mergers like this occur regularly and have not been prohibited by United States or European regulators in decades...

Sun's customers universally support this merger and do not benefit from the continued uncertainty and delay. Oracle plans to vigorously oppose the Commission's Statement of Objections as the evidence against the Commission's position is overwhelming. Given the lack of any credible theory or evidence of competitive harm, we are confident we will ultimately obtain unconditional clearance of the transaction.

The Justice Department, which is in Oracle's camp, detailed its reasoning in a statement from Deputy Assistant Attorney General Molly Boast of the Justice Department's Antitrust Division.

And though Boast pointed to the department's "strong and positive relationship on competition policy matters" with the EC, she also said, "At this point in its process, it appears that the EC holds a different view. We remain hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the commission's jurisdiction."

The Justice Department reasoned that there are other database packages available and that open-source projects can be forked by those who disagree with corporate sponsors' handling of the software.

"Several factors led the (Justice Department's antitrust) division to conclude that the proposed transaction is unlikely to be anticompetitive. There are many open-source and proprietary database competitors. The division concluded, based on the specific facts at issue in the transaction, that consumer harm is unlikely because customers would continue to have choices from a variety of well established and widely accepted database products," Boast said. "The department also concluded that there is a large community of developers and users of Sun's open source database with significant expertise in maintaining and improving the software, and who could support a derivative version of it."

Compuware announced Monday that it has completed the buyout of Web optimization company Gomez, bringing aboard the acquired firm's 272 employees into a new Web Performance division.

As an application and testing firm, Compuware provides enterprise customers with tools to optimize the performance of their server-based applications. Gomez helps its customers monitor and manage the performance of their Web sites and Web-based applications.

Compuware believes that the addition of Gomez, first announced in October, will allow it to provide a wider range of services to help customers test and optimize both in-house and Internet-based applications.

The deal has also garnered praise from some industry analysts. A recent IDC report "Compuware Expands SaaS Portfolio With Gomez Acquisition" sees the Gomez/Compuware marriage as a good match with plenty of upside.

"We're thrilled to welcome the Gomez team to Compuware," said Compuware President and Chief Operating Officer Bob Paul in a statement. "Together, Compuware and Gomez will--through a solution that features rapid time-to-value, ease of use and real-time answers--give IT and business executives the optimal application performance they need to drive brand image, customer loyalty and revenue."

Compuware said it will keep the Gomez brand, technology, and business model but look to integrate its new purchase in such areas as sales and marketing. Gomez CEO Jaime Ellertson will remain and serve as president of Gomez, the Web Performance division of Compuware.

Compuware expects the acquisition to add to operations this year.

Cisco Systems is once again stepping on its partners' toes and taking on new rivals as it adds new capabilities to its suite of unified communications products and services.

On Monday, the company will announce several new and enhanced software tools for instant messaging, e-mail, social networking, videoconferencing, document and video sharing. Some of these new products will compete directly with similar products offered by Cisco partners, Microsoft and IBM.

Cisco is taking direct aim at Microsoft with a new corporate e-mail service called Webex Email. Cisco has combined technology from its acquisition of Postpath with its Webex conferencing service. The combined offering gives corporate users access to their Outlook e-mail from any browser. The new service puts email in the "cloud" and eliminates the need for Microsoft Exchange servers.

Cisco already competes with Microsoft in the unified communications market. In fact, the two companies are strong rivals here. But Microsoft has had an advantage over Cisco with its strong presence on the desktop.

Competition between Cisco and Microsoft started to heat up earlier this year, when Cisco took its WebEx Web conferencing service into the cloud. At that time, Cisco executives said there was a possibility that Cisco would compete directly with Microsoft's e-mail Exchange platform.

As for the online collaboration market, Cisco and Microsoft aren't the only ones developing solutions. Google also offers document creation and sharing online. But so far those services haven't gotten much appeal outside of the individual consumer market. And it has yet to take shape in the enterprise market. And of course, Google already offers Internet-based e-mail through Gmail. IBM, another major Cisco partner, is also trying to get into Web-based e-mail market with its product iNotes.

As part of its blitz of collaboration announcements, Cisco also announced several other products and enhancements to its unified communications line-up, including some new social-networking tools and enhancements to its video conferencing and high-end telepresence solutions.

On the social-networking side, Cisco has developed a YouTube-like service called Cisco Show and Share that allows users to create, edit, and share video content. It is also introducing the Cisco Enterprise Collaboration Platform, which creates a sort of Facebook for corporate users. The tool includes the ability offer blogging, wikis, team pages, and instant messaging on an internal social networking site.

Other new products include the Cisco Intercompany Media Engine. This product allows users from different companies to communicate and collaborate with each other over a secure network connection.

On the video side, Cisco is introducing the Intercompany Cisco Telepresence Directory, which allows users to see who is available for video chats. The company also added the ability to allow Webex users to click to make video calls to users in a Cisco Teleprresence room. These video conferencing rooms are high-definition video conferencing purpose-built rooms that often cost about $300,000. Cisco also said it has tweaked its telepresence product to allow it to work with equipment from competitors, such as Polycom and Tandberg.

Cisco is currently trying to acquire Tandberg for $3 billion. But Tandberg's shareholders recently said they would reject the offer if Cisco didn't increase its bid.

The European Commission must be feeling a bit silly right about now. Despite insisting that Oracle has not responded to its requests for comment and concessions in its planned acquisition of Sun Microsystems (and the open-source database MySQL), Amazon.com recently offered the EC all the proof it needs that MySQL competition remains alive and well.

Competition at pennies an hour.

(Credit: Amazon)

For those who missed it, Amazon announced last week a fork of the popular MySQL database, called RDS (Relational Database Service). RDS is essentially a hosted version of MySQL, one that developers can write to at the minuscule cost of pennies per hour.

Oracle hasn't even started with MySQL yet, and it already faces significant competition, not to mention the other MySQL forks (e.g., Drizzle).

As Redmonk analyst Stephen O'Grady writes:

From here, it seems fairly clear that while RDS will not be the best option for every MySQL user, it will find a more than adequate market of customers who are willing to trade money for time, as (former MySQL CEO) Marten Mickos might put it. Assuming that Amazon can realize its typical economies of scale by amortizing the management and administration costs of the service over a wide array of machines, the product should more than pay for itself simply by widening the addressable market.

How much wider will it make the addressable market? At a minimum, it will lower the barriers to entry for customers with relational needs (read: most customers) and a lack of cloud expertise. It will be fascinating to see, however, if Amazon has far grander ambitions in mind.

Interesting, and somewhat unfair to Oracle. Presumably Amazon's entrance into the MySQL market is A-OK because Amazon isn't currently a database company, but it is a significant and growing infrastructure provider. Why should it get to own a complete stack, but Oracle can't?

That, after all, is what Oracle is attempting to accomplish with the Sun/MySQL acquisition. Sun gives it hardware, while MySQL gives it a strong entry into the Web database market and an effective hedge against Microsoft in lower-end enterprise needs.

Oracle's bid for Sun/MySQL, in other words, isn't about squelching competition, but rather about enhancing it. Amazon's RDS proves that strong, viable competitors to MySQL can arise from within the MySQL community, which disproves the EC's argument that Oracle's control of MySQL will somehow crush competition.

And if the deal doesn't hurt competition, as Amazon RDS all-but-proves it doesn't, then the EC's opposition is hollow and should be shelved, as The 451 Group's Matt Aslett argues.

It's time for the EC to acknowledge it was wrong, and move on. Amazon surely has. But until the EC makes a final decision, Oracle (and MySQL) can't.

(Credit: IBM)

IBM on Wednesday announced a program designed to help educators and students pursue cloud-computing initiatives and better take advantage of collaboration technology in their studies.

The IBM Cloud Academy, announced at the Educause annual conference, includes a global roster of educational institutions as initial participants. Educause is a nonprofit association whose mission is to advance higher education by promoting the intelligent use of information technology.

IBM will provide the cloud-based infrastructure for the program, with some basic collaboration tools available at the outset. IBM's LotusLive service provides the basis for the new offering. Participants will immediately be able to do some very basic tactical functions on the new system:

• Create working groups on areas of interest to the education industry
• "Jam" on new innovations for clouds in education-related areas with IBM developers
• Work jointly on technical projects across institutions
• Share research findings and exchange new research ideas

Shared research across universities and other higher-learning institutions remains a vital part of technological innovation, but many programs don't have formal tool sets in place. Cloud services are a logical place to run these types of programs, especially as international groups need immediate access to data from their partners.

Oracle is taking a hard line in dealing with European Union objections to its planned acquisition of Sun Microsystems, according to a Financial Times report Tuesday.

EU antitrust regulators are concerned that Oracle, which has a large business in proprietary software, won't be a good home for Sun's open-source MySQL database business. According to the report, Oracle is unyielding, offering no concessions to deal with the EU's concerns.

That stance could lead the regulators to issue a formal complaint objecting to the deal, and that move could occur within days, according unnamed sources in the story. Neither the EU or Oracle commented for the story.

MySQL's former chief executive, Marten Mickos, has urged the EU to approve the acquisition, but cofounder Monty Widenius has objected. Sun shareholders and the U.S. Justice Department have approved the deal.

As much as Twitter is a powerful communication and social application, it's a relatively simple Web app. As part of a new contest sponsored by Engine Yard, Ruby on Rails developers are going to turn Twitter into their own application server.

The contest asks developers to program the "Worst App Server Technology Ever" (Waste) using Twitter as the message bus. While much of the contest is being done tongue-in-cheek, it's actually an interesting use case to see if a service like Twitter can take the place of a more traditional message bus like IBM MQ series or AMQP (Advanced Message Queuing Protocol).

Contest participants register up to five Twitter handles and code the function that each would perform in a program. When the contest challenge is issued on November 12, participants will have to use at least 10 of the pre-designated Twitter handles (other than their own) as endpoints to perform functions on data sets located at unique URLs. All messages will work through a series of automated public Twitter replies.

This is somewhere between an application server, a social game, the "telephone game" and service-oriented architecture (SOA) where Twitter plays the role of the enterprise service bus and the Twitter API is the broker between data sources. SOA relies on services exposing their functionality other applications and services can read to understand how to utilize those services. In this case, Twitter can be used as an application server in the cloud. (Take that buzzword bingo players.)

The funny thing is that as absurd and comical as this sounded when the Engine Yard guys told me about it, I've started to think about this as a way to possibly achieve a real technological breakthrough. And while I don't think that Twitter will be the "cloud bus," I do think that there is a lot to be learned from applying this type of constraint to a data flow process.

Engine Yard VP of marketing Michael Mullany told me that the contest shows how developers can leverage a relatively straightforward platform in innovative ways. But it's also another example of an interesting marketing effort to use Twitter as the vehicle for one's own benefit. Also, in true open source fashion, developers wind up building new applications based on code written by their peers.

Let's hope Twitter can handle the attention and developers are not greeted by the ever-lurking fail whale. You can check out the contest and learn more details at Engineyard.com

Betting that the benefits of the move will outweigh the risks, Yahoo has released the source code underlying in-house software called Traffic Server that can speed up Web site operations.

The software works by moving some data and operations closer on the Internet to the people trying using those services. Yahoo released it as an "incubator" project under the auspices of the Apache Software Foundation, a seasoned organization for managing open-source projects and also the site that houses the Hadoop open-source project Yahoo favors for large-scale data-processing challenges.

Shelton Shugar, Yahoo's senior vice president of cloud computing, plans to announce the move at the Cloud Computing Expo in Santa Clara, Calif., on Tuesday in a keynote speech, but the software actually arrived at Apache last week.

Shelton Shugar, Yahoo's senior vice president of cloud computing

(Credit: Screenshot by Stephen Shankland/CNET)

"We've donated Traffic Server to Apache because we think it's a great piece of code, and we want to build a community around that in the same manner we built a community out of Hadoop," Shugar said in an interview.

Traffic Server is a battle-hardened package with more than 200,000 lines of C++ code. Yahoo originally got the software through its acquisition of Inktomi earlier this decade, and it's been using it ever since. Today, the software delivers 30 billion Web objects and 400 terabytes of data each day.

And Yahoo can rightly be proud of Traffic Server's performance: that comes from a surprisingly small number of Yahoo servers--between 100 and 150, said Chuck Neerdaels, vice president of data services at Yahoo. The software is set up particularly to run multiple tasks at the same time, a design well-suited to today's servers with multicore, multithreaded processors.

Source code is what humans write in a higher-level programming language; only after it's been translated into binary machine code can a computer actually run that program. When associated with an open-source project, this software is available for anyone to see, modify, and distribute, in contrast to the locked-down world of proprietary software such as Microsoft Windows. So in effect, Yahoo is allowing others not only to use Traffic Server for their own ends, but also to modify it--for example, by taking advantage of its ability at to accept plug-ins that can adapt it for different tasks.

Giving away the farm?
So isn't there a risk that Yahoo is giving away some pretty important technology that's central to its business? Plenty of start-ups today are trying to grow to Yahoo's scale, and many of them are competitors.

Some Yahoo rival might very well gain as a result, but on balance, the company thinks that it'll come out ahead. For one thing, Traffic Server in isolation is not as powerful as Traffic Server woven into Yahoo's computing fabric, the company argues.

"What we're giving up is a generic building block. What makes it really interesting at Yahoo is how we've connected it with other things to make a bigger service," Neerdaels said. As for Yahoo's major rivals: "We suspect our larger competitors already have some solution they're happy with."

Yahoo expects a number of benefits from broader development and use of Traffic Server.

"We think a lot of folks can benefit from this, and by raising the tide, we think we can benefit as well," Shugar said.

For one thing, making Traffic Server open-source software will mean that people will grow familiar in its use, making it easier for Yahoo to hire engineers who already are up to speed.

"By virtue of basing services on open-source software, we attract people who want to work on open source. They like it, and they like the idea of it. It's a skill they can take with them from one place to another," Shugar added.

For another, Yahoo can benefit from others adapting the software to a broader range of uses, he said.

Gaining influence among developers
There are intangible benefits, as well, when it comes to recognition among programmers, whose influence in some ways makes them the digital elite. Microsoft long ago learned that much of its power comes from developer allies, and Google is trying to put that lesson to good use as well by releasing many open-source projects--Google Chrome being one recent example.

Yahoo isn't in the business of selling technology to others in the manner of Amazon Web Services, Microsoft Azure, or Google App Engine. But having solid technology is essential to Yahoo. While it's willing to sell its search business and engineering skills to Microsoft, it still needs in-house expertise to power its many Web properties and to reduce its operating costs.

Here, Traffic Server is important. For example, one area where Yahoo uses Traffic Server was at Yahoo Sports for handling scores. A regular Web server sends out the Web page to a person's browser, but Traffic Server handles the JavaScript technology that periodically refreshes the contents of a scoreboard element on that page.

It's only a "trickle" of data, but at Yahoo's scale, that can be some pretty heavy work. "When they moved to using the Traffic Server front end, they shaved something like 200 machines off their back end because session management was more efficient," Neerdaels said.

Another part of Yahoo operations retrofitted with the software is Yahoo Mail, he said. Traffic Server can be used to process the cookie text files on a person's browser to figure out whether that person can be logged in automatically or the person needs to authenticate anew. It also can route traffic appropriately when, for example, a person who is "homed" to Yahoo's servers in India visits the site while in the United States.

Traffic Server also manages a lot of more nuts-and-bolts tasks. For example, it can cache Web data closer to browsers so the original Web servers that house the data aren't as overtaxed. And it can store a Web address stored in the Domain Name System to speed up network speeds.

What's it good for?
Some of these chores can be handled by existing software, such as Squid, which is already open source. But Yahoo is on a roll with its open-source work, as the company seeks to advance its internal cloud-computing infrastructure. Expect more to come.

"As various pieces of our cloud get to a point of maturity, we will open-source specific pieces," Shugar said. Future candidates include Yahoo's foundation for hosting its Web applications on a virtualized, more flexible foundation, and its Sherpa and Mobstor services for storing data.

Winning open-source allies can be difficult, and Neerdaels said it takes an engineer a good six months to fully comprehend all Traffic Server's code, so immediate gains beyond fostering goodwill are unlikely.

But in the long run, Yahoo's program could pay significant dividends. Building a series of significant open-source packages could lead to a Yahoo infrastructure that's high-power but more standard than custom-made.

It's not every day that large, significant software packages arrive on the Net in open-source form--much less a series of them that are increasingly relevant to a competitive market of large-scale Web sites.

In this case, Yahoo's gift may indeed become Yahoo's gain.

More midsize companies are being attacked by cybercriminals at the same time they're spending less on security, says a McAfee report released Wednesday.

Across the world, more than half of the 900 midsize businesses (51 to 1,000 employees) surveyed by McAfee for its report, The Security Paradox, said they've seen an increase in security breaches over the past year. Despite the threat, the recession has caused most of these companies to freeze their IT security budgets.

(Credit: McAfee)

McAfee found that the costs of dealing with a security attack can be high. Over the last year, one of five midsize companies surveyed lost $41,000 in sales on average as a result of a breach. In China alone, 38 percent of the businesses questioned lost an average of $85,000 due to an attack. And more than 70 percent believe a serious data breach could put them out of business, noted the report.

(Credit: McAfee)

But as the recession has grown, IT budgets have dropped. Almost 40 percent of the companies trimming their IT security budget plan to limit the purchase of new security products. And more than a third are switching to cheaper security software to cut expenses, even though they realize that may put them at greater risk.

"An organization's level of worry and awareness about increasing threats has not overcome the downward pressure on budgets and resources," said Darrell Rodenbaugh, senior vice president of global midmarket for McAfee, in a statement. "But this creates a vicious cycle of breach and repair that costs far more than prevention."

Midsize companies also may underestimate their risk, according to McAfee. Among companies with fewer than 500 employees, more than 90 percent believe they're protected from cybercriminals and feel they don't face the same threats that larger firms do.

But McAfee discovered that businesses with 101 to 500 people had on average 24 security breaches over the past three years, compared to 15 breaches for those with 501 to 1,000 employees.

In the long run, dealing with the aftermath of a security attack eats up a company's time and expenses. The study found that 65 percent of firms spend less than four hours a week on IT security, but around the same percentage have spent more than a day recovering from security breaches.

"Our research shows that organizations that put more effort on preventing attacks can end up spending less than a third as much as those that allow themselves to be at risk," said Rodenbaugh.

The study was conducted by research firm MSI International, which surveyed 100 midsize businesses in each of the following countries: U.S., U.K., Australia, Canada, China, France, Germany, India, and Spain. The results were compared with prior studies done in North America and Europe.