Experts: Oracle and MySQL do not create a database monopoly

Open-source MySQL widely used but lacks sales figures that interest regulators

Oracle Corp.'s $7.4 billion acquisition of Sun Microsystems Inc. will bring together the world's most valuable relational database with the most popular open-source one -- MySQL.

Oracle reaped $22 billion in revenue from its namesake database between 2005 and 2007, which more than doubled the database sales of its next closest competitor, IBM, according to IDC.

Meanwhile, MySQL has been downloaded more than 100 million times, according to Sun. The company claims there are 70,000 MySQL downloads a day and 12 million MySQL databases in production. The database is actively running at Web 2.0 giants such as Google, YouTube, Craigslist, Yahoo and Digg.

Should such numbers, combined with Oracle's significant base, draw the attention of government antitrust regulators? No, according to analysts and experts.

"Oracle is a powerhouse in database management systems, but it's hardly a monopolist," wrote analyst Curt Monash of Monash Research today. "I may well be overlooking something, but I haven't found a compelling antitrust trigger."

The deal "reduces competition in the database market by removing the threat of MySQL 'going up-market' from its base in Web applications to compete with Oracle's enterprise class database," said Roger Burkhardt, CEO of open-source database provider Ingres Corp. But even he conceded that the implications were not strong enough to raise the monopoly siren.

An Oracle spokeswoman declined to comment on the issue. Oracle's chief competitors, Microsoft Corp. and IBM also declined to comment.

Experts cite a plethora of reasons why the deal doesn't create a database monopoly.

For one, MySQL, despite its wild popularity, won't add much to Oracle's revenues.

Oracle reaped $8.34 billion from database sales in 2007, giving it 37.6% of the $22.2 billion global market, according to IDC. The 2008 figures are not yet available, the research firm added.

MySQL's sales, meanwhile, were just $38 million in 2007, ranking it just 19th in the market, according to IDC. The open-source database placed behind a plethora of unheralded database vendors, such as Siemens, Unisys, Hitachi, even Apple, whose FileMaker personal database had triple MySQL's revenue.

"MySQL has a tremendous impact, but it's in a piece of the market where no money changes hands," said John Newton, chief technology officer of Alfresco Software Inc., a maker of open-source content management software.

It's a very different situation from the $11.2 billion in combined Unix server sales that would have come from a merged IBM and Sun. Merger negotiations between IBM and Sun fell apart in recent weeks.

"Regulators look closely at cold hard cash," said Gartner Inc. analyst Kenneth Chin. "Open source is less on their radar screen."

Also, Oracle's grip on the database market is not as firm as, say, Microsoft's dominance in PC operating systems.

For instance, IBM, bolstered by its acquisition of Informix Corp., actually stole the database crown from Oracle briefly in 2001.

Besides IBM and Microsoft, which each hold about a fifth of the database market, Oracle faces strong competition from Teradata, Sybase and a whole ecosystem of innovative start-ups, noted Monash. "The DBMS industry isn't even the secure oligopoly it appeared to be earlier this decade," he wrote.

Oracle is also a nonfactor in the smaller but still significant nonrelational database market. According to IDC, Oracle held just 0.2% of the $3.34 billion market in 2007 through its open-source BerkeleyDB database. Microsoft and IBM dominate that market with the desktop Access and mainframe IMS databases, respectively.

Gartner's Chin said that the acquisition could prompt moves by Oracle that would get loud objections from the very vocal MySQL customer base. For example, he said that Oracle could raise the price of enterprise subscriptions to MySQL, or require that customers purchase support from Oracle for all production MySQL databases, not just a few designated ones. "I would not be surprised if Oracle did that," he said.

Chin did note that Oracle did not meddle in the sales and marketing processes of open-source databases BerkeleyDB and InnoDB after buying them in 2006 and 2005, respectively.

Also, Oracle has said early on that Sun will continue to operate as a separate entity. That means MySQL will likely at least maintain its independence, as well as staying far enough away from Oracle's pricey database to prevent inadvertent cannibalization, he said.

Alfresco's Newton agreed, though he argued that Oracle may try to subtly steer the course of MySQL's development to slow the addition of features such as more scalable clustering that would compete with Oracle's main database.

But even if that happens, the open-source community as well as makers of third-party MySQL storage engines could ensure that such options remain available, he said.

Copyright © 2009 IDG Communications, Inc.

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