Oracle Announces Meeting On Sun Acquisition

Open SourceSoftware

Oracle is now confident enough that the European Commission will finally sanction its acquisition of Sun Microsystems that it has called a press conference

Oracle’s complicated nine-month-long mission to acquire Sun Microsystems will come to an end at some point in the next seven days.

The world’s second-largest software company is now confident enough that the European Commission will sanction the acquisition that on 20 Jan. it called a news conference for 27 Jan. to unveil its “Oracle+Sun” strategy for 2010 and beyond.

At the event, CEO Larry Ellison will outline plans for the combined companies, reveal product road maps and position the enlarged company as a full-service IT product and service provider in the same league as IBM and Hewlett-Packard.

The event will be Webcast globally. Details are available here.

Oracle and Sun sources had nothing more to say on the record on 20 Jan. about the impending regulatory approval or the 27 Jan. event.

There’s a lot riding on this transaction. The career fates of thousands of employees at Sun hang in the balance. Thousands of Sun shareholders and a large number of its corporate customers are also waiting for the long-stalled deal to close, for it affects them all in numerous ways.

On 16 Dec, eWEEK learned through knowledgeable sources that the standoff between Oracle and the EC antitrust regulators had been broken and that an agreement was imminent. Paperwork and legal communications are all that remains of the long, tiresome tussle over the future of Sun and its open-source MySQL database.

The EC, which serves as the law enforcement body of the 27-nation European Union, said it would make a decision by 27 Jan. about whether to sanction the deal so that Oracle can acquire Sun and continue to do business in Europe as a full-service systems vendor. Oracle does more than 20 percent of its business in Europe.

The No. 1 sticking point all along has been MySQL, an open-source database that Sun bought for $1 billion two years ago. The EC has been withholding approval of the acquisition since August 2009, seeking some kind of assurance that MySQL, which originated in Finland and Sweden, will be allowed to innovate and compete fairly in the IT marketplace.

That Oracle’s own proprietary database often competes directly against MySQL is seen by many industry people as an obvious conflict of interest and by some as an insurmountable objection to the deal. Ellison contends that MySQL does not compete directly with his company’s high-margin databases, but a large number of people working in relevant fields disagree.

On 13 Jan, an international consulting company, UBS, predicted that Oracle would lay off half—or about 14,000—of Sun’s staff when the deal is approved.

Sun responded a day later with a memo to all employees saying Oracle will rely heavily on the skills of Sun’s workers and in fact is not planning to lay off that many employees.

“Oracle has asked me to assure Sun employees that this report [by UBS] is absolutely untrue,” Brian Sutphin, executive vice president of corporate development and alliances at Sun, wrote in the memo.

Antitrust regulators in Russia also are balking at approving the transaction, preferring to wait until the EC goes public with its declaration.

eWEEK will have full details when a decision on the acquisition is finally made public.

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