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What's behind Oracle's database buy?

Tags:
MySQL,
Acquisition,
Oracle,
Innobase

Martin LaMonica CNET News

Published: 14 Oct 2005 12:45 BST

Marten Mickos, chief executive of MySQL, got a phone call last Friday with surprising news: Oracle was buying Innobase, a small Finnish company with close ties to his open-source database company.

Oracle president Charles Phillips was calling to voice the company's "good intentions" in the purchase of the five-person outfit based in Helsinki.

But even with his reassurances, Mickos, like many others, is speculating about the tech giant's motives in buying a company that furnishes a key component in MySQL's database, an ever-more-popular rival to Oracle's software. Is Oracle seeking to disarm a potential competitor, or does it want to make open-source products a strategic part of its business?

"This is a relevant question. I would say the open-source community is waiting for an answer," Mickos said.

Financially, the deal barely makes a mark in the ledger at Oracle, which has been on a $16bn (£9bn) acquisition spree. But analysts and industry executives say it's important in that it makes one thing clear: Oracle sees the need to take into account the rising popularity of open-source databases.

Oracle said in a statement Friday that with the move, it "intends to expand its commitment to open-source software". And in his call to Mickos, Phillips said that the company expects to renew the contract under which Innobase supplies a storage engine called InnoDB to MySQL, which ships it as standard in its database.

Beyond that, executives have been tight-lipped on further details of the company's plans, and an Oracle representative declined to comment for this story.

In the past, Oracle executives have been dismissive of MySQL as a competitor. Chief executive Phillips said in August that open-source databases are a "net positive" on Oracle's own business.

"We think open source has (played) an important part in introducing new customers, who we wouldn't have known about, to the idea of databases," Phillips said in an interview with ZDNet UK sister site CNET News.com, noting that about 40 percent of new open-source database customers did not previously use such software. "When they want to do something more serious... they very quickly jump onto Oracle."

MySQL claims that its software has racked up 6 million installations, and large businesses such as travel giant Sabre Holdings rely on large farms of MySQL-based servers. Distribution partnerships with Novell and Dell are also expected to help it tap into enterprise interest in open-source databases. Businesses spent about $120m on such software last year, research firm Forrester has estimated.

It's that kind of market impact that has pushed Oracle into reacting to open-source rivals, analysts said.

"If Oracle thought it was threatened by MySQL, this was a very easy move, really for pocket change. They struck a very tricky punch to MySQL," said Paola Lubet, a vice president of marketing and business development at Solid Information Technology and a former Oracle database marketing executive.

InnoDB is not the only engine which will work with the MySQL database, but it is popular, particularly among people seeking high-end database features such as row-level locking and transactions. MySQL distributes the Innobase technology, which is licensed under the open-source General Public License (GPL), with its own product.

The MySQL database itself is available in two ways: freely under the GPL or via a commercial licence for business customers that want service and support.

MySQL is widely used by Web developers, who often combine the simple-to-use database with the so-called LAMP stack of open-source software, which also includes the Linux operating system, the Apache Web server and scripting languages such as PHP.

However, MySQL has greater ambitions for its product. The upcoming 5.0 update of its namesake database, which could be released as early as next week, contains some of the business-oriented features that typically attract customers to Oracle's line-up.

A threat?
While Oracle's flagship 10g database is seen as far more functional than MySQL, it's still seen as a rival. That's true for open-source products competing with Oracle's lineup, particularly on the low end and among the developers who help dictate database decisions.

In a recent survey, Evans Data found that more than 70 percent of developers had installed and used an open-source database — a rise of 7 percent in the past six months. Of the open-source databases, MySQL was by far