Monday, April 20, 2009


It's in the works for Oracle to acquire Sun. While I don't really care about these two specifically it's reminded me of something that irritates me.

Why must companies acquire one another?

I'm not saying Oracle and Sun (or other companies) don't have good reasons to merge. I'm also not saying there are never times when it makes sense. However, I am saying that too many companies seem to do it these days.

There is often market consolidation as that market grows. Initially there will be a lot of players, with the weaker ones dropping out or being bought out. Then things level off. Sun and Oracle have been loosing market share to IBM and Microsoft for years, but they are important to the market. Perhaps they feel they have a better chance together than alone.

Is the technology market uniquely built to funnel business into two or three large competitors? Who does this make the most sense for? Businesses who use the technology, the customers or the businesses that make the technology, or the investors? In other markets I'd say the customer looses, but in technology, having fewer competitors makes for better interoperability. Does it need to be this way?

There are standards for technology. Philips head screws, standard/metric bolt heads, common dimensions for lumber, standard light bulb sockets, etc. All of these things could have been proprietary and thus we'd be stuck with a few manufactures who controlled them. Since they are registered and open standards anyone can manufacture those items. It makes the market larger and more competitive giving customers choice and lower prices.

When it comes to computer technology there are some standards, especially in hardware, but software is really still up in the air. In large part because the standards are not standard. Microsoft has a choke hold on the Word document format, even it's new, 'open' .docx format. There is an open standard document format but Microsoft doesn't want to adopt that because it could hurt Word's dominance. If an open source application worked with their documents as well as their own, suddenly there is competition again. That's good for customers, bad for Microsoft and it's investors.

The same could be said for Oracle buying Sun. Last year Sun acquired MySQL, the open source database engine darling loved by many Internet businesses. Because it uses standard SQL it is enterprise friendly. Microsoft, Oracle, and IBM each have their own database engines that they sell, for a premium. MySQL cuts into their bottom lines. They can compete against each other based on many other propritary software packages and the like. It's a lot harder to compete with free. So if Oracle buys Sun, it could crush MySQL, start charging for it, or change the code to be more compatible with the Oracle database engine, breaking the openness that MySQL currently enjoyes.

Again the customer looses.

1 comment:

mattg said...

Actually, the Flat-Head screwdriver WAS proprietary, originally... They didn't want the Phillips-bearing public to be able to open up some things. The tendency is for things to evolve into an open standard though, and now everyone has two kinds of screwdrivers.

As far as I know, Oracle can't "un-open-source" MySQL. There always has to be a free MySQL out there, because of the license it was created under. But they can charge a TON for support, and "enterprise" features that are not open source. In effect, if they wanted to play hardball, they could make MySQL free *and* worthless. But I think they're more into Sun for Java (the MySQL is a perk though), so they can unite against the .NET/SQL Server juggernaut.

Even if they do try to kill/sunset free MySQL, the OS community will just switch to Postgress anyway. Nothing wrong with Postgress.