According to a Bloomberg story released November 21 concering the European Union (EU) statement of objections against the Sun (JAVA)/Oracle (ORCL) merger, it's hard to see why the homeboy EU open source project MariaDB, a fork of MySQL, needs the EU's statist protection. And it's clear why Oracle says the EU Competition Commission has a
"profound misundertanding of both the database marketing and open source dynamics."
The open source thing is a side show designed to get the open source blogblatherers up in arms but it is clear, if the Bloomberg story is accurate, that the EU really misunderstands enterprise software market dynamics. Apparently—according to Bloomberg’s reading of what it says is a 155-page document—the Eurocrats have decided that MySQL is the fourth leading database in the world. Also according to Bloomberg, the EU finding is based on the number of daily downloads of MySQL.
So now we know how the EU analyzes competition in the enterprise software market. It’s known by software market analysts as the Compuserve or AOL method. That is, it proposes that one size a software market not by the number of productive instances of a piece of software or by the revenue generated by that software but by the number of annoying free floppy diskettes sent out to consumers by snail mail every month. That is the way AOL and Compuserve executed try-it-you’ll-like-it marketing before Internet downloads became the norm. Billions of the diskettes of course immediately filled up landfills pre recycling days. Most never made it into a floppy drive never mind doing anything useful.
By the EU Competition Commission’s logic, MySQL must be the leading database in the world, not number four. At the reported 60,000 downloads a day, there must be more than 20,000,000 copies in productive use just from downloads in 2009. That’s something like five for every database administrator in the world. Figure that MySQL has been around for 10 years or so and that means 200 million instances are running. Figure that no reasonable program development person would download a copy every time he or she began a new application development project (that is, they would use the copy they previously downloaded) and you have to assume, using EU logic, that MySQL is in use in billions of productive situations.
And yet according to IDC, according to the Bloomberg article reporting on the leaked EU statement of objections document, Sun only realized $40 million in worldwide software revenue last year from MySQL. Typically IDC software market statistics do not include professional services revenues—such as for training and implementation—but just license and subscription maintenance revenue. I do not know the methodology or source that IDC used in the statistic quoted by Bloomberg. Another widely quoted source in last few weeks said Sun netted $300 million from the first full year of marketing MySQL. MySQL executives were widely quoted as saying the company did between $50 and $100 million in revenue in the last full year before it was acquired by Sun.
So why does MariaDB need the protection from the EU that its public policy expert is lobbying for? All it would seem Maria needs to do is peel off 10% of the vast MySQL installed base and it would have a multi-hundred-million dollar software and support business. Or maybe what is really happening is that the Maria guys know--because they were the MySQL guys until recently--that the project actually has very little business viability. And they have to stop the train for a decade or so until Maria might theoretically catch up to Oracle database functionality and popularity.
That's all I can figure from this EU-bureacrat-full-employment extravaganza.
Oracle, do the right thing by shareholders (yours and Sun's). Get out of the EU.
-- Dennis Byron