The Post-Oracle Sun Exodus

It appears Oracle is starting to experience some high profile departures from ex-Sun employees now that the acquisition has been finalized. First came Tim Bray:

Today I resigned from Sun/Oracle — the official integration date here in Canada is March 1st, so I won’t ever have actually been an Oracle employee. I’m not currently looking for another job. I’ll write some looking-back and looking-forward stories when I’ve got a little perspective. I can’t say enough good things about the people at Sun – and outsiders with whom I worked – over the past few years. Thanks for enriching my life!

…then, Simon Phipps:

Today is my last day of employment at Sun (well, it became Oracle on March 1st in the UK but you know what I mean). I am a few months short of my 10th anniversary there (I joined at JavaOne in 2000) and my 5th anniversary as Chief Open Source Officer. I hope you’ll forgive a little reminiscence.

Followed by most of the Drizzle team, including Monty Taylor, Eric Day, Stewart Smith, Lee Bieber and Jay Pipes (although notably not including Brian Aker from what I can tell [UPDATE 3/9/10 11:44AM: Ilan has informed me that Brian mentioned leaving Sun during his Drizzle QA at SCaLE 8X. Confirmation here; “Now I work for myself. All opinions expressed are solely the opinion of me, myself, and I…”]):

Although a few folks knew about where I and many of the Sun Drizzle team had ended up, we’ve waited until today to “officially” tell folks what’s up. We — Monty Taylor, Eric Day, Stewart Smith, Lee Bieber, and myself — are all now “Rackers”, working at Rackspace Cloud. And yep, we’re still workin’ on Drizzle. That’s the short story. Read on for the longer one

So, what does this mean for Oracle? Well, obviously less than it would have meant for Sun. Whenever two large technology companies merge, you always expect some attrition… both voluntary and involuntary. That’s what makes M&A in this industry so difficult, especially when Open Source companies are involved. With an Open Source company, much or what you’re acquiring when you buy a company is the people. If those people start leaving in droves, much of the value of the company goes with it.

That being said, this situation is probably a little different. That’s in part because Oracle handles these situations a little differently than most companies and likely knew exactly what they wanted out of Sun when they made the acquisition. With many in the Open Source community already skeptical of Oracle, however, the fact that many of these early departures have been directly related to Open Source positions is not going to instill a lot of confidence. Like Sun or not, they had a huge number of critical Open Source projects under their belt. The stewardship of those projects will help dictate to what extent they flourish moving forward. How Oracle will handle that stewardship remains to be seen. They’re certainly more focused on profits than Sun was, but you can see some positive anecdotal experiences out of previous FLOSS acquisitions such as Sleepycat. My guess is that things will play out substantially different on a project-by-project basis here… and a couple forks and a couple abandoned projects are probably inevitable.

–jeremy

Oracle Sun Merger Closes

As I’m sure you’ve heard by now, the Oracle acquisition of Sun has closed. From MySQL and Java to OpenSolaris, OpenOffice.org and more; it’s difficult to understate the potential impact this will have on the Open Source community. Many people are skeptical of Oracle. This perception, correct or incorrect, may have the ability to negatively impact some of the communities that this acquisition affects. One point that is difficult to argue with is that Oracle is maniacally focused on profitability. That wasn’t always the case with Sun and I’d expect there to be some immediate changes as a result of this. Shortly after the deal closed, Oracle had a five hour webcast discussing Oracle’s plans. As Stephen O’Grady notes, “Between Ellison, Kurian, Phillips and the rest, we got our share of answers yesterday. But as is almost always the case in such situations, there was as much left unsaid as said”. A few tidbits from his very good Q&A:

Q: What’s the big picture of this transaction?
A: What was old is new again? A couple of years back, some of the best and brightest Solaris engineers began blurring the lines between what was hardware and what was software. This skunkworks project was called Fishworks, for Fully Integrated Software and Hardware…works. Basically the project was a storage device that blended features of Solaris (DTrace, ZFS, etc) with some impressive analytics, and an interesting storage hybrid incorporating both disk and flash storage elements. It’s hardware like this, I think, that is the future for Oracle.

Q: How do you figure?
A: As Cote covered in his excellent quick take, Ellison, in planning for the future, is looking to the past. Specifically, IBM’s past. “Our vision for the year of 2010 is the same as IBM’s for 1960,” as he says, meaning that you buy a single machine that has everything you want on it, preintegrated.

Will Oracle still sell you their database if you’re running on, say, Dell servers? Certainly. But will they also be telling you how much faster it runs on their integrated appliance, and how that appliance – through the magic of ZFS and storage pooling – will give you better performance at a lower cost, and real time performance analytics via DTrace? You bet.

Q: Which stated plans are those?
A: In talking to the Journal, Ellison said the following:

“We are not cutting Sun to profitability,” Mr. Ellison said. “We think that this business will be profitable immediately.”

He went on to say, however, that he would be leaving certain non-profitable lines of business:

Mr. Ellison said that Sun will add $1.5 billion to Oracle’s bottom line in the first year, largely because he will get out of “businesses that don’t make money.”

Q: Which businesses are those?
A: Exactly.

Q: Meaning we don’t know?
A: It’s certainly less than obvious. Likely candidates like NetBeans or OpenOffice.org were explicitly mentioned on yesterday’s call, which presumably wouldn’t be the case if the plan was to immediately retire them. No, the Sun Cloud and OpenSolaris were but a few of the obvious product lines that were MIA on Wednesday.

Q: What is Oracle going to do with OpenOffice?
A: Apparently continue to invest in it, and marry it to that which Ellison hates most in a product referred to as “Cloud Office.”

Q: MySQL is getting its own salesforce, though, right?
A: MySQL will maintain an independent sales and development staff, yes, though organizationally it will be grouped with Oracle’s open source GBU. You could argue that this is because MySQL’s more of a competitive threat, that it’s natural given the differing markets served by the products, or that it’s at the behest of the EU. Or all of the above. Either way, it means that MySQL – at least for now – has some room to move.

Q: Back to the operating system question for a second. When the acqusition was announced, you said the following:

The betting here is that Solaris will continue to be supported, but not as a frontline option, with the possible exception of cloud offerings where the quirks of the operating system are rendered invisible by the platform. Think IBM with AIX, HP with HP-UX, and so on: there is ample precedent for the (successful) continuation of two competing product lines, and as Oracle itself acknowledges above, there’s an awful lot of Oracle running on top of Solaris.

You further speculated that some of the Solaris assets might be candidates for relicensing. What do you think now?
A: That that view is wrong. We’ll see, of course, how things play out, but it would certainly appear that Oracle is committed to the Solaris platform indefinitely. Personally, I think that will be difficult to manage over time, but it’s pretty clear that the above guess was off. As some Sun folks were kind of enough to tell me when it was published.

If anything, Oracle advantaged Solaris vs Linux during yesterday’s presentation. When discussing them both, Solaris came first and had bullet points like Secure, Scale, and so on. Linux? It was described as the most “widely used” operating system.

I remain convinced that Oracle will have a tough time maintaining and messaging two competitive products, but given the depth of their appliance ambitions they may see that as a short term problem only.

As you can tell, in the short term there are probably going to be more questions than answers. While it seems MySQL is safe for now, how the developer community reacts to the Oracle ownership of the product remains to be seen. Will people stick with MySQL? Will Percona or MariaDB be the ones to benefit? Or will it be a completely different DB such as PostgreSQL that gains as a result.

While it’s clear that Oracle is going to kill some products, there doesn’t seem to be a consensus on exactly what will survive. That uncertainty could be extremely detrimental to some projects. One of the biggest questions for me is what will become of OpenSolaris/Solaris and how that decision will impact Linux support within the company. Sun had a mixed history with Linux, but Oracle has been a big proponent recently. Will they switch gears and go with a product they have more ownership over, or will they stick with Linux which is doing much better in the marketplace.

I have quite a bit of other commentary on this topic, but I’ll attempt to break that into separate posts in the near future as more information becomes available.

Additional Reading:
* Sun & Oracle’s impact on open source acquisitions
* Best of luck to Jonathan, who is stepping down.

–jeremy

Oracle Sun Acquisition Musings

A little time has past since the announcement that Oracle would acquire Sun. While there are still many unanswered questions, I thought I’d post a quick update on the topic.

The first topic I’ll cover is the Sun hardware business. From a recent interview with Larry (via Ostatic):

“No, we are definitely not going to exit the hardware business. While most hardware businesses are low-margin, companies like Apple and Cisco enjoy very high-margins because they do a good job of designing their hardware and software to work together. If a company designs both hardware and software, it can build much better systems than if they only design the software. That’s why Apple’s iPhone is so much better than Microsoft phones.”

Ellison also confirms in the interview that far from discontinuing the SPARC chip, he intends to increase investment in it. “We think designing our own chips is very, very important,” he said. He also notes that Sun outsources almost all of its manufacturing to companies such as Fujitsu.

So it looks like Oracle will indeed be pursuing the “entire stack” path that many predicted. One major benefit to Oracle here is that if a customer is getting both their hardware and software (including both the OS and applications) from the same company, it makes switching away from that company extremely costly and complicated.

That brings us to the OS. It’s still not clear to me which way Oracle is going to go here. Long term I can’t see Solaris and Linux being first class citizens within Oracle. Which one they choose remains to be seen. They “own” Solaris in a way they could never “own” Linux, which may be the deciding factor for a company like Oracle. That being said, I’d imagine more of their customers want Linux so it’s certainly not going to be an easy decision. Some are speculating (via Matt) that if Oracle does go with Solaris that a company like IBM may acquire Red Hat. I’m not so sure about that, but it is a possibility. While IBM does really like Linux, Jboss would be a major duplication for IBM (and it represents a lot of the growth potential within Red Hat).

Finally, here’s a recent announcement regarding MySQL:

The following was in the just released monthly bug report for the Falcon storage engine:

“With the news that Sun has aggreed to be purchaced by Oracle, Some inevitable changes will occur. Once the acquisition is made, the need for Falcon as a MySQL storage engine will be re-evaluated. Until then, Falcon will continue to improve stability and performance. The team will also evaluate other technical niches that may be unique to Falcon.”

I for one would be very disappointed to see Falcon not supported by Oracle. I know they have worked very hard to create a next-generation storage engine. While it could be argued that InnoDB can fill all use cases, I believe that choices are a good thing and having one less choice is not a good thing.

Good luck all on the team. You have been nothing but kind and generous when answering my dumb questions via email and in person. You can count my vote for “keep it!!”.

I think it’s clear that this acquisition will mean some significant changes for the future path of MySQL. The fact that a lot of upcoming MySQL-related innovation may come from outside the company, and from places like the Open Database Alliance should at least ensure that MySQL remains viable from a technology standpoint.

–jeremy

Oracle Agrees to Acquire Sun Microsystems

With rumors of an IBM acquisition still swirling, early this morning Oracle announced that it is acquiring Sun for roughly $7.4 billion. From a CNET article:

Oracle and Sun announced Monday that they have entered into a definitive agreement under which Oracle will acquire Sun common stock for $9.50 per share in cash. That puts the value of the transaction at about $7.4 billion, or $5.6 billion net of Sun’s cash and debt.

Oracle President Safra Catz said in a statement:

We expect this acquisition to be accretive to Oracle’s earnings by at least 15 cents on a non-GAAP basis in the first full year after closing. We estimate that the acquired business will contribute over $1.5 billion to Oracle’s non-GAAP operating profit in the first year, increasing to over $2 billion in the second year. This would make the Sun acquisition more profitable in per share contribution in the first year than we had planned for the acquisitions of BEA, PeopleSoft and Siebel combined.

To me, IBM seems like a better fit for Sun and this acquisition leaves as many questions as answers. While Oracle recently announced a hardware product line in a partnership with HP, do they really want to be in the hardware business themselves? A few years ago Larry Ellison definitively said they did not want to be in that business. With much of Sun’s revenue coming from hardware, will they spin that division off or use it to focus more on a complete Oracle stack, that includes everything from hardware to database. Moving to the individual parts of that stack, will Oracle continue with the Sparc CPU line or be interested in the more commodity x86 lines. At the OS level, will Oracle continue to focus on Linux and their Unbreakable implementation or will they attempt to keep Solaris alive. Oracle has been contributing to Linux in a significant way recently, and it would be a huge loss for that to go away IMHO. At the recent Linux Foundation summit Oracle touted that it views it’s upcoming btrfs filesystem as superior to ZFS. What does the future hold for projects such as that?

That brings us to MySQL. I’d contend that MySQL is “worth” more to Oracle than it is to any other company (including IBM) and here’s why. To most other companies, MySQL is roughly worth the net present value of future projected MySQL revenue. The thing most people don’t understand about the MySQL/Oracle relationship is that for many small to medium commercial projects, MySQL is “good enough” and has a much lower TCO than Oracle. Even so, many companies didn’t actually want to go with MySQL for a variety of reasons (many political and procurement related). This created a situation where the *option* of MySQL effectively capped the price people would spend on low end Oracle projects. It wasn’t just the number of people actually leaving Oracle for MySQL, it was the number threatening to and getting additional (and sometimes steep) discounts on Oracle as a result. This creates a premium to Oracle that no other company would have been able to extract. What this acquisition means for the long term future of MySQL within Sun is unclear to me. Oracle has owned InnoDB for a long time. This could either be a long overdue reunion of Inno and MySQL, or the beginning of a slow death for MySQL. One where Oracle doesn’t overtly kill the project, but deprecates any features it sees as threating to its main cash cow and relegates MySQL to a web-only type product. On a related note, the acquisition almost certainly means the end of Postgres support within Sun.

It seems one piece that will certainly benefit from the acquisition is Java, although I’d imagine that IBM is not too happy that Oracle now “owns” Java. Eclipse might have to change it’s name now ;) Also, the rivalry between Larry and Bill Gates is well known. Does this mean that Oracle will be interested in funding addition OpenOffice.org development even thought it’s *way* outside their normal target market?

In the end, Oracle is one of the best acquisition machines on the plant. They have been purchasing and integrating companies for a long time. They’ve become very good at it. However, most of the companies they have acquired have been very specific targets in niche markets that aimed to fill a perceived gap in Oracle’s offerings. Sun is not that. They are a huge company with a massive product line that spans hardware and software. This is not the average Oracle acquisition and the decisions Oracle makes will have massive implications not just for Open Source but for the entire IT industry.

–jeremy

(Note: Interestingly, the Oracle press site has been down with a “Server is too busy to handle request” for the last 30 minutes. I’ll update the first link in this post as soon as it’s back up. Until then, here’s a NYT article.)

[Updated] Additional links:

Glyn Moody
Matt Asay
Larry Augustin

Roundtable Discussion: Why Can't We All Just Get Along (Liveblog)

Panelists:
Jim Zemlin – Linux Foundation
Ian Murdock – Sun
Sam Ramji – Microsoft

* Lessons learned after being at MSFT for a couple years as the “Open Source” guy
– Sam: When he came in from BEA, things working together “just made sense” to him. Day 1 he would have explained what he was doing a bit better to the legal team. Engineers tend to change much quicker than lawyers, whose job is to mitigate risk.
* Similar question to Ian:
– Was a bit of a culture shock going to Sun. He was used to working at 50+ person companies that he had started. Thinks he may have been a bit naive when first going into Sun. “Large companies have more inertia than you might think”.

* It’s clear that Microsoft sees the computing landscape changing. What can the Open Source crowds do to help the agents of change within the company?
– Sam: We’re a large company and some parts are changing faster than others. Identifying that there is a place to go with the things you think are not going well is important. He’d like to be seen as the unelected representative within Microsoft for us. He might not have an immediate answer, but he wants to better understand the problems.

* Why does he (Sam) care what the Open Source and Linux communities think?
Sam the person: “I think computing just needs to get better”
Sam the MSFT representative: We’re at a point in our history that we need to understand what the next engine of growth is going to be.

* What is Sun going to do with MySQL?
– Ian: We’ve fully committed to the Open Source model. MySQL represents a huge opportunity. The kinds of software you see being used in Web 2.0 and cloud computing represent a new dynamic. Sun’s global sales force plus products like MySQL are where Sun will grow.

* Where is Microsoft going next?
– Sam: We want to build software that is in demand on every platform. He sees 4 general directions for this: server, client, mobile and cloud.

* Sam: “When you hear the same thing from enough customers, you listen…even if you don’t necessarily agree”. Gave the example of Microsoft supporting PHP, despite having put a lot of resources toward and really liking ASP.NET.

* We’re clearly disappointed about Software Patents in this community. The recent FAT lawsuit included.
– Sam: We agree there are issues, but don’t think the whole system should just be thrown out. Says Microsoft suffers more than anyone else in the current system. Spends over $100M a year defending against patent suits. Did not address FAT lawsuit specifically.
Ian: It’s a bit of an arms race and large companies feel the need to amass patents for defensive reasons. No one wants to be the first to drop all their patents.

* Ian: With cloud computing, are we losing many of the advantages of Open Source?
– Jim: I don’t think the operating system discussion is going to be decided for a while.
– Sam: Now the “cloud” is just elastic computing. The next cloud with be more like Google App Engine or Microsoft Azure. The idioms and structures are different… it’s a whole different environment.
(Note: I don’t think they fully understood the question Ian was asking, but it’s a really important question…and one I’ll be thinking about quite a bit moving forward. It’s not always just about access to the code. It’s about the code being usable outside the original context, portability and other related issues)

* Question from Jeremy Allison: Asserting patent rights is fundamentally against the Open Source ethos. FAT lawsuit aside, Jeremy would simply like clarity around what interoperability IS possible and what interoperability (from a legal perspective) IS NOT possible.
– Sam: We learned a lot from the work MSFT did with Samba on licensing protocols, but it won’t scale to 1,000 of protocols. “We can and must do more about predictability on where we’re going”. Places where we currently have a licensing program are probably good places for Open Source to stay away from, at least in the near future. “We need to improve here”. The SMB/CIFS agreement went through 35 iterations in 6 weeks. We’re willing to learn.

The final consensus: where we can be more clear with each other, let’s do it. Linux, Microsoft and Sun are all going to be around for the long haul. We’re all going to be here, let’s make the best of it. Let’s move beyond ideology and be pragmatic.

That’s the end of the Summit for today. See you at the Exploratorium for the evening reception.

–jeremy

The MySQL exodus at Sun

It looks like the exodus of top MySQL execs from Sun is in full swing. Yesterday, Monty posted the following:

Time to move on
I have now departed from Sun and joined my own company, Monty Program Ab.

There were a lot of rumors around me resigning in August/September last year. I didn’t back then want to comment on the rumors, because I was still trying to work something out with Sun. Now I can finally describe a bit of what was going on.

In this case, the rumors had some elements of truth to them. I had told management that I thus would be submitting my resignation immediately as I strongly believed that the 5.1 release was not ready and that those problems needed to be fixed before it went GA. This action, together with other peoples´ efforts, did have the wanted effect and I made an agreement with Sun´s upper management to not initiate my resignation but instead stay around for three more months to help Sun work out things in MySQL Development and also give Sun a chance to create an optimal role for me within Sun.

The three months did stretch out to seven months, and the changes I had hoped Sun would apply to in the MySQL Database group to fix our development and community problems did not happen fast enough.

Sun and I concluded in the end that I have much higher chances of achieving my goals outside of Sun, so it’s just better to swallow the bitter apple, go out and get things going. We parted in good terms and we both expect to continue to do business and work together.

As you probably know, Monty is one of the two co-founders of MySQL AB. The other co-founder, David Axmark, left Sun last year. It’s often the case that founders leave the acquiring company after a little while, so neither of these came as a huge surprise to me. Today, however, we got the news that Marten Mickos is leaving Sun amid a reorg:

I just got news that Marten Mickos, former MySQL CEO, is to depart Sun amid a reorganisation of its infrastructure and database business units. Don’t expect an announcement from Sun on this, but the news is confirmed.

It seems that Sun is combining its Software Infrastructure organization with its Database Group to form a unified open source product group under the leadership of Karen Tegan Padir, vice president of MySQL & Software Infrastructure.

Marten was the long time CEO and really helped MySQL AB grow from a business perspective. Sometimes that growth came at the cost of angering the MySQL community. While founder Monty was a tech guy, Marten was a business guy. To see him leave so soon is much more of a surprise to me. Combined, these three losses are huge for Sun, and may start to raise questions not only about the future of MySQL within Sun… but about the future of Sun in general. Sun has done some very innovative things in the past, but has clearly been going through a bit of a cultural shift internally. I always saw the MySQL AB acquisition as a potential way to help spread the Open Source mantra inside a company that was a bit conflicted. It will be interesting to see how Sun moves forward from here.

–jeremy

Tech Vendors That May Not Survive 2009

We all know that the global economy is not doing well right now. Very few days go by without some bad news hitting the wire. This article (if it can be called an “article”… it’s more of a flash presentation) may be a signal that we’re going a bit too far though:

In the Channel Insider 2009 Market Pulse Survey, we asked solution providers which vendors they thought would go out of business or be acquired in 2009. The results may shock you. Based on their perceptions and predictions, the following are the vendors that made the going list of those that won’t be here in 2010.

The list follows:

10. VMWare
9. Symantec
8. Citrix
7. Sun
6. AMD
6. CA
5. Salesforce.com
4. McAfee
3. Checkpoint
2. NetApp
1. Novell

To be honest, I think the downside to the current economic situation is likely to be longer and deeper than many are predicting. To suggest that the companies above, however, will be gone in 11 months is in many cases ludicrous. There are a couple of them that could survive that duration on legacy contracts alone; without making a single sale. It is possible that many will get acquired, as the companies that do have cash on hand will find many bargains to be found. Acquisitions happen in all economic situations after all. When the news gets this negative it’s often a sign that a bottom may be near. I’m not convinced of that yet, but I think this quarter will give us a pretty good indication of what 2009 will bring.

–jeremy

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