Oracle vs. Microsoft: The open source software factor

Many IT pros believe Oracle's recent endorsements of the open source movement were designed specifically to destabilize Microsoft.

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Many IT professionals believe that Oracle's recent moves in the open source software (OSS) market -- including its purchase of open source stalwart Sleepycat Software Inc. -- were undertaken in an effort to destabilize Microsoft.

The biggest threat to Microsoft is Linux and open source software.
Myles Halsband,
consultantMonument Data Solutions

OSS users, consultants and other IT pros interviewed during the recent New England Oracle Applications User Group conference speculated that Oracle's major endorsement of the open source software movement was also designed to help the company reach its goals of "offering everything under the sun" and eradicating the growing threat posed by rival database software maker MySQL.

"It's a brilliant strategy from Oracle's standpoint to go into the open source software market because it doesn't hurt them," said Carl Rubin, a consultant with Monument Data Solutions in Needham, Mass. "[Oracle has purchased] complementary products, and it gives them entryways into new clients and new stuff."

Back in February, Oracle announced plans to purchase Lincoln, Mass.-based Sleepycat and its embeddable Berkeley DB database management system (DBMS). At the time, Oracle cited International Data Corp. research which predicted that the embeddable database market would grow to $3.2 billion by 2009. Oracle says that with more than 200 million deployments, Berkeley DB -- which is distributed under a dual-license model -- is the most widely used open source database.

Last October, Oracle acquired Finland-based Innobase, the creator of InnoDB, a transactional database technology distributed as part of the open source MySQL database. MySQL competes directly with Oracle's flagship DBMS.

According to reports earlier in the year, Oracle also had acquisition discussions with at least two other open source firms, including Cupertino, Calif.-based Zend Technologies Inc. and Atlanta-based JBoss. Oracle is also said to be considering the possibility of creating its own version of the Linux operating system, according to published reports. Oracle has a long history of supporting Linux.

Rubin said that the purchase of Sleepycat gives Oracle the chance to take on Microsoft and SQL Server at the low end of the database market. With Berkeley DB, he said, Oracle can now offer an embeddable database at a lower price point than ever before, and that is bad news for Microsoft.

"Oracle has created a lower-price strategy by not using the [Oracle 9i Lite] database for this embedded thing," Rubin said. "It kills SQL Server because it's [aimed] at the bottom end of the market. SQL Server is at about $1,500 for five users, [but] you can buy Sleepycat for next to nothing and pay a small maintenance fee per year."

More on open source software and Oracle:

Open source software and Oracle: Special Report

Despite Oracle's claims to the contrary, Rubin thinks the purchase of Innobase was clearly designed to disrupt MySQL's business over the long term.

"What that does is it cuts MySQL out of their marketplace and will knock them off their feet," Rubin said. "[MySQL does] not have another product to go in there and they probably will not have another product release for at least a year."

Myles Halsband, a consultant who also works for Monument Data Solutions, agreed that Oracle's Sleepycat purchase was aimed squarely at Microsoft.

"The biggest threat to Microsoft is Linux and open source software," Halsband said. "[Oracle is] hoping that by strengthening that sector, they might weaken Microsoft's essentially iron grip, on the desktop market especially."

Halsband said that Microsoft shouldn't take the growing threat from open source software lightly. He keeps seeing the technology pop up in the companies he works with, especially at startups and older firms that are launching new ventures, and he says that open source is becoming the development methodology of choice for those companies because of its low total cost.

Halsband added that he does not see open source software gaining a foothold in the area of financial applications, where streamlined open source applications lose out to more fully featured proprietary offerings.

"I think that the financial side is driven by functionality," Halsband said. "And if I'm a CFO, I'm probably reluctant to invest resources and people in a product that has a very small user base."

Another conference attendee, a software manager who works for a Cumberland, R.I., firm, said that he thinks Oracle's open source buys and other acquisitions over the last few years prove that the company wants to enter into as many software markets as possible.

"They're just trying to cover as much ground as possible," he said. "Potentially, the sky's the limit if it's out there and it makes economic sense."

Despite Oracle's decision to cozy up to the open source software market, no one seems to think that the firm will ever release an open source version of its namesake DBMS, which produces the bulk of its revenue.

Sridhar Bogelli, the founder and chief executive officer of Apps Associates, a Southborough, Mass.-based application development consultancy, said, "I can't see them being totally open because [they're very] proprietary and their strength and wealth is in their core."

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