Sun acquisition by Oracle

The acquisition of Sun Microsystems by Oracle Corporation was completed by Oracle on January 27, 2010. Significantly, Oracle, previously only a software vendor, now owned both hardware and software product lines from Sun (e.g. SPARCstations and Java, respectively).

A major issue of the purchase was the fact that Sun was a major competitor to Oracle, raising many concerns among antitrust regulators, open source advocates, customers, and employees.^[1] The EU Commission delayed the acquisition for several months over concerns of Oracle's plans for MySQL, Sun's competitor to the Oracle Database.^[2] The commission finally approved the takeover, apparently pressured by the U.S. to do so, according to a Wikileaks cable released in September 2011.^[3]

History

In late 2008, Sun was approached by IBM to discuss a possible merger.^[4] At about the same time, Sun also began discussions with another company, widely rumored but unconfirmed to be Hewlett Packard, about a potential acquisition. By March of 2009, talks had stalled between Sun and both IBM and the other potential suitor.

On April 20, 2009, Sun and Oracle Corporation announced that they had entered into a definitive agreement under which Oracle would acquire Sun for $9.50 a share in cash. Net of Sun's cash and debt, this amounts to a $5.6 billion dollar offer from Oracle. Sun's shareholders voted to approve the proposal on July 16, 2009, although the deal was still subject to regulatory approvals.^[5] Terms of the agreement between Oracle and Sun included dependencies on the antitrust laws of "the United States and Canada, European Union, China, Israel, Switzerland, Russia, Australia, Turkey, Korea, Japan, Mexico and South Africa".^[6]

On August 20, 2009, it was reported that the U.S. government, pursuant to the Clayton Antitrust Act, approved Oracle's purchase of Sun.^[7]

On September 3, 2009, the European Commission announced that it would not immediately approve the deal, but would instead perform a second round of investigation, focusing on the implications of Oracle's control of MySQL (acquired by Sun in 2008).^[8]

On October 20, 2009, Sun filed with the U.S. Securities and Exchange Commission (SEC) its intention to cut 3,000 jobs globally over next 12 months, citing losses caused by delays in the acquisition process.^[9]

On November 6, in its 10-Q filing for the 1st quarter of the 2010 fiscal year, Sun announced 25% total revenue decrease, compared to the 1st quarter of the previous year, due to "economic downturn, the uncertainty associated with our proposed acquisition by Oracle, increased competition and delays in customer purchasing decisions".^[10]

On January 21, 2010, EU Competition Commissioner Neelie Kroes announced unconditional approval of the deal.^[11]

On January 27, 2010, Oracle announced that it had completed its acquisition of Sun Microsystems, making Sun a wholly owned subsidiary of Oracle.

Impact

Resignations

Several notable engineers resigned following the acquisition, including James Gosling, the creator of Java (resigned April 2010), Tim Bray, the creator of XML (resigned April 2009), and Bryan Cantrill, the co-creator of DTrace (resigned July 2010).

While the deal was still pending regulatory approval, the JRuby team collectively resigned from Sun and moved to Engine Yard. ^[12]

The Drizzle DBMS team collectively resigned from Sun and moved to Rackspace. ^[13]

Most of Sun's executive management team, including CEO Jonathan Schwartz, resigned immediately after the acquisition was complete. John Fowler, Executive VP of Sun's systems group, remained at Oracle as Executive Vice President of Hardware Engineering.^[14]

In addition, Simon Phipps, Sun's Chief Open Source Officer, and Tim Bray, Sun's Director of Web Technologies also left the company.^[15]

OpenSolaris

In early 2010, troubling signals began to emerge concerning the future of OpenSolaris. It was omitted from Oracle Product roadmaps ^[16] and End of Life Documents were published on Oracle's website.^[17] A statement from Oracle read "Keep it movin', folks ... nothing to see here. The page is a policy page to describe how the service life of the product works. [We're] not announcing EOL [for OpenSolaris]."^[18]

Then in August 2010, leaked documents indicated that Oracle would end releases of OpenSolaris at 2010.05. In addition, it would no longer release the developing Solaris source code during development. Instead it would only publish it after each new version of Solaris is released. Since Oracle was no longer supporting all the development of an open version of Solaris, the OpenSolaris Governing Board disbanded, ending the project.^[19] Independent development continues with the OpenIndiana fork.

MySQL petition and forks

A major issue discussed in media and considered by the EU Competition Commission was Oracle's acquisition of MySQL, an open-source competitor to Oracle acquired by Sun in February 2008, as part of the deal.

In response, several forks were made with the intent to ensure the future success of MySQL despite being purchased by its biggest competitor. These include Drizzle and MariaDB. Monty Widenius, one of the founders of MySQL, also started a petition asking that MySQL either be divested to a third party, or have its licensing changed to be less restrictive than the previous GPL terms it operated under prior to and during its ownership by Sun.^[20]

Java Android lawsuit

Oracle filed a patent infringement lawsuit against Google over its use of Java in the Android platform. Android apps run in the Dalvik Java virtual machine. The apps are written in Java but are compiled into Dalvik's custom bytecode format which is incompatible with standard Java runtime environments.^[21] Google thus avoided licensing fees associated with J2ME, the mobile version of Java. However, aspects of the Dalvik system are very similar to the Java technology patented by Sun and now Oracle.^[22]

Regardless of the legal merits, commentators have questioned the wisdom of the lawsuit over Android, a platform which has reinvigorated the Java community. In addition, it gave another worrying signal to open source community members about Oracle's stewardship of open technology.^[22]

Apache Software Foundation resignations

The Apache Software Foundation has resigned its seat on the Java SE/EE Executive Committee due Oracle’s refusal to provide a technology compatibility kit (TCK) to the ASF for its Apache Harmony open-source implementation of Java^[23][24]

OpenOffice resignations and fork

After Oracle ended OpenSolaris, some members of the similarly open source OpenOffice.org Project became worried about their project's future with Oracle. Thus they formed The Document Foundation and created the LibreOffice fork. The LibreOffice brand was hoped to be provisional, as Oracle had been invited to join The Document Foundation and donate the OpenOffice.org brand.^[25]

In response Oracle demanded that all members of the OpenOffice.org Community Council involved with The Document Foundation step down from the Council, citing a conflict of interest.^[26] Many community members decided to leave for LibreOffice, which already had the support of Red Hat, Novell, Google, and Canonical.^[27] LibreOffice produced its first release in January 2011.^[28]

Program closures

Project Kenai, a Sourceforge-like project for Java apps, was migrated to Java.net by Oracle. ^[29]

Project Darkstar, a project to investigate and create solutions for issues in massive online gaming environments, was closed by Oracle on February 2, 2010 ^[30][31].

Customer Relations

Oracle has changed the software support model to also require hardware support. The new policy states "when acquiring technical support, all hardware systems must be supported (e.g., Oracle Premier Support for Systems or Oracle Premier Support for Operating Systems) or unsupported." ^[32]

In March 2010 the Solaris 10 download license changed to limit unpaid use to 90 days.^{[33] [34]}

References

1. ^ "Oracle Completes Acquisition of Sun". Yahoo. 27 January 2010. http://finance.yahoo.com/news/Oracle-Completes-Acquisition-iw-2658323391.html?x=0&.v=1. Retrieved 27 January 2010. 
2. ^ Commission clears Oracle's proposed acquisition of Sun Microsystems
3. ^ Mick, Jason (September 1, 2011). "U.S. Pressured EU to Approve the Oracle's Acquisition of Sun". Daily Tech. http://www.dailytech.com/US%20Pressured%20EU%20to%20Approve%20the%20Oracles%20Acquisition%20of%20Sun/article22581.htm. 
4. ^ Alex Handy (July 16, 2009). "Proxy reveals three-way competition over ownership of Sun". SD Times. http://www.sdtimes.com/link/33610. Retrieved 2010-01-30. 
5. ^ "Sun Microsystems Announces Stockholder Approval of Oracle Merger Agreement". Sun Microsystems. July 16, 2009. http://www.sun.com/aboutsun/pr/2009-07/sunflash.20090716.1.xml. Retrieved 2009-07-16. 
6. ^ Sun Microsystems (June 8, 2009). "Definitive Merger Proxy". EDGAR. United States Securities and Exchange Commission. http://www.sec.gov/Archives/edgar/data/709519/000119312509126389/ddefm14a.htm. Retrieved 2010-01-30. 
7. ^ Thomasch, Paul (August 20, 2009). "Oracle wins U.S. approval to buy Sun Microsystems". Reuters. http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSN2053486920090820. Retrieved 2009-08-20. 
8. ^ "Oracle Faces In-Depth EU Probe Over $7.4 Billion Sun Purchase"
9. ^ Sun Microsystems slashing up to 3,000 jobs, 10 pct", Associated Press, October 20, 2009
10. ^ Form 10-Q for SUN MICROSYSTEMS, INC.
11. ^ "Oracle wins unconditional EU approval for Sun buy". Reuters. 21 January 2010. http://www.reuters.com/article/idUSTRE60K1ZN20100121. Retrieved 21 January 2010. 
12. ^ "Sun's JRuby team jumps ship to Engine Yard". 2009-07-27. http://www.itworld.com/business/72663/suns-jruby-team-jumps-ship-engine-yard. Retrieved 2009-07-28. ^{[dead link]}
13. ^ "Eric Day - Drizzling from the Rackspace Cloud". http://oddments.org/?p=282. 
14. ^ "Questions and @nswers with: John Fowler". Profit Magazine. Oracle Corporation. http://www.oracle.com/profit/features/qand%40.html. Retrieved 2010-02-15. 
15. ^ Kelly Fiveash (2010-03-09). "Open source boss quits Sun Oracle". The Register. http://www.theregister.co.uk/2010/03/09/simon_phipps_quits_sun_oracle/. Retrieved 2010-02-15. 
16. ^ "OpenSolaris devs 'ignored' by Oracle". 2010-02-25. http://www.theregister.co.uk/2010/02/18/opensolaris_under_oracle/. Retrieved 2010-02-25. 
17. ^ http://www.sun.com/service/eosl/eosl_opensolaris.html
18. ^ http://www.eweek.com/c/a/Linux-and-Open-Source/Oracle-Explains-Unclear-Message-About-OpenSolaris-444787/
19. ^ Shankland, Stephen (23 August 2010). "Lacking Oracle help, OpenSolaris group disbands". CNET. http://news.cnet.com/8301-30685_3-20014478-264.html. 
20. ^ Monty Widenius. "Save MySQL!". http://www.helpmysql.org. Retrieved 2010-01-31. "[Signer hereby asks] competition authorities around the world to block Oracle's acquisition of Sun unless one of the structural solutions selected by [signer] below is put in place as a legally binding requirement: (select at least one; all combinations are possible) MySQL must be divested to a suitable third party that can continue to develop it under the GPL. Oracle must commit to a linking exception for applications that use MySQL with the client libraries (for all programming languages), for plugins and libmysqld. MySQL itself remains licensed under the GPL. Oracle must release all past and future versions of MySQL (until December 2012) under the Apache Software License 2.0 or similar permissive license so that developers of applications and derived versions (forks) have flexibility concerning the code." 
21. ^ Paul, Ryan (23 February 2009). "Dream(sheep++): A developer's introduction to Google Android". Ars Technica. http://arstechnica.com/open-source/reviews/2009/02/an-introduction-to-google-android-for-developers.ars. Retrieved 6 March 2011. 
22. ^ ^{a b} Paul, Ryan (14 August 2010). "Oracle's Java lawsuit undermines its open source credibility". Ars Technica. http://arstechnica.com/open-source/news/2010/08/oracles-java-lawsuit-undermines-its-open-source-credibility.ars. Retrieved 6 March 2011. 
23. ^ "The ASF Resigns From the JCP Executive Committee". Apache Software Foundation. December 09, 2010. https://blogs.apache.org/foundation/entry/the_asf_resigns_from_the. Retrieved December 09, 2010. 
24. ^ Paul, Ryan (December 09, 2010). "Apache quits Java governance group in protest of Oracle abuses". Ars Technica. http://arstechnica.com/open-source/news/2010/12/apache-resigns-from-jcp-in-protest-of-oracle-governance-failures.ars. Retrieved December 09, 2010. 
25. ^ "OpenOffice.org Community announces The Document Foundation". The Document Foundation. 28 September 2010. http://www.documentfoundation.org/lists/announce/msg00000.html. Retrieved 21 October 2010. 
26. ^ Paul, Ryan. "Oracle wants LibreOffice members to leave OOo council". Ars Technica. http://arstechnica.com/open-source/news/2010/10/oracle-wants-libreoffice-members-to-leave-ooo-council.ars. Retrieved 23 February 2011. 
27. ^ Paul, Ryan (2 November 2010). "Fork off: mass exodus from OOo as contributors join LibreOffice". Ars Technica. http://arstechnica.com/open-source/news/2010/11/fork-off-mass-exodus-from-ooo-as-contributors-join-libreoffice.ars. Retrieved 6 March 2011. 
28. ^ Paul, Ryan (25 January 2011). "First release of LibreOffice arrives with improvements over OOo". Ars Technica. http://arstechnica.com/open-source/news/2011/01/the-document-foundation-announces-first-release-of-libreoffice.ars. Retrieved 6 March 2011. 
29. ^ http://www.oracle.com/technology/community/sun-oracle-community-continuity.html
30. ^ http://www.theregister.co.uk/2010/02/04/oracle_lights_out_for_project_darkstar/ Article at The Register regarding Oracle shutting down Project Darkstar
31. ^ http://www.projectdarkstar.com/forum/?topic=1540.0 Project Darkstar developers announce the shutdown on the community forums
32. ^ Kanaracus, Chris (25 March 2010). "Oracle Enacts 'all Or Nothing' Hardware Support Policy". CIO.com. http://www.cio.com/article/588163/Oracle_Enacts_all_Or_Nothing_Hardware_Support_Policy?page=1&taxonomyId=3045. 
33. ^ Rodrigues, Savio (26 March 2010). "License change leaves Sun Solaris users at a crossroads". InfoWorld. http://www.infoworld.com/d/open-source/license-change-leaves-sun-solaris-users-crossroads-858?page=0,0. 
34. ^ Farrell, Nick (31 March 2010). "Oracle will cut Sun's open source". The Inquirer. http://www.theinquirer.net/inquirer/news/1599130/oracle-cut-sun-source.