Oracle Closes in on Sun, Wall Street Worries
January 25, 2010
Let the worries begin. The European Commission Thursday approved the $7.4 billion merger between database giant Oracle and long-time Wall Street denizen Sun Microsystems.
"I am now satisfied that competition and innovation will be preserved on all the markets concerned," Competition Commissioner Neelie Kroes said in a statement.
Sun has historically been a powerhouse in capital markets with its Sparc hardware and Solaris operating system, which have allowed brokerages to trade faster and more reliably. Its Java language is used for enterprise software, and the MySQL database is a popular back end for Wall Street's Web-based applications.
The Commission initially had concerns that the merger could put MySQL and Java at risk. But after a four-month investigation, the Commission determined that there were credible open source alternatives to MySQL, and that the Java community development process includes Oracle competitors.
The Commission approval was the biggest obstacle holding up the merger, though China and Russia have yet to weigh in.
"Oracle expects unconditional approval from China and Russia and intends to close the transaction shortly," Oracle said Thursday.
Oracle's plans to acquire Sun will mean tighter integration between Oracle databases and Sun hardware. However, Aite Group analyst Adam Honore recently surveyed two dozen capital markets CIOs about the merger, and says that companies running "critical instances" of MySQL are dubious of Oracle's claims that it will protect that less-costly database.
"There are quite a few MySQL instances [on Wall Street], for a variety of relational database applications. It's all over the place,'' he said.
The uncertain future of MySQL is their biggest concern about the merger, he said. Other CIOs were also worried about the future of the Sun hardware, he said, with the merger accelerating plans to move to a different platform. "You're probably looking at a few percentage point reduction in market share," he said.
At trading platform vendor Marketcetera, Inc., MySQL is the underlying embedded database for the company's trading platform. That platform powers such hedge funds as Cerebellum Capital and Nobilis Capital.
"It stores all the trades and positions," said Toli Kuznets, the company's co-founder and CTO. "We've been using it for four years, from the beginning of Marketcetera."
According to Kuznets, the company chose the MySQL platform, in part, because the firm is philosophically committed to the open source concept. "But obviously, it is because of ease of use and cost," he added.
Kuznets added that he's not worried that Oracle might kill the database.
"And if Oracle stops innovating, someone else will just take over innovating," he said.
According to the European Commission, MySQL's open source nature allows it to be forked - with a new player taking over development. In addition, the Commission also determined that the PostgreSQL database was a credible open source alternative for many database users.
MySQL is a database that is commonly used for Web-based applications on Wall Street. Users include the Chicago Mercantile Exchange, HypoVereinsbank, Credit Agricole, Dun & Bradstreet, Lloyds TSB, and Shinsei Bank.
At Aizawa Securities Co., Ltd., a leading Japanese brokerage, MySQL is used to power a Web-based customer system for viewing transactions.
