Several months ago we speculated about a possible acquisition of an open source ERP project by one of IT megavendors – IBM, Sun or Oracle. Much have changed since then, especially for Sun, who lost a lot of its value as a public company and became an easy target for an acquisition.
Rumors of talks between Sun and IBM surfaced a couple of weeks ago, but apparently IBM was not eager enough to put the money on the table. But Oracle was never (and will probably never be) afraid of acquiring other companies.
As of the time of writing it is not clear if it’s officially a done deal, but Oracle is to buy Sun for about 7B$. The implications on enterprise IT are huge, with two dimensions directly related to open source ERP – open source and enterprise applications.
Sun was the leading open source software vendor. It released several high end software products as open source ( the Java programming language, the Open Solaris operating system and many other smaller projects). It also acquired MySQL, the leading open source database software a few months ago. Oracle ,on the other hand, is synonymous with proprietary software, especially in the ERP market.
It is yet unclear what will be the future of these open source products. Just a reminder of their popularity – open source ERP solutions Opebravo, Compiere and Apache ofbiz, to name a few, rely heavily on Java and Java technology. MySQL is supported by several open source ERP, CRM and BI products, and is an extremely popular database engine for web applications.
If Oracle decides to make changes to license terms of these products, open source for enterprise will take a major hit. With this acquisition, Oracle now sits right on top of the tap of the open source stream into the enterprise. If it decides to close the tap (by changing Java and MySQL from free, open source to non-free proprietary software), many business application vendors who rely on these free technologies might face a huge hole in their business model.
Another aspect of this acquisition is Oracle’s ability to offer the enterprise customer with a complete business appliance – a combination of high end hardware and operating system(Sun Solaris), database software (Oracle DB or MySQL), a complete toolset around java, application servers and business applications (Oracle Applications and Siebel CRM). When we speculated about Sun buying an open source ERP vendor, the main motivation was exactly that – Sun’s ability to offer a complete business appliance, with robust hardware, OS and business software. We can now expect Oracle to be the first to market with the business appliance.
So what does it mean for open source ERP vendors chances of been acquired? Perhaps IBM, the obvious looser in this deal, would want to counter Oracle with their own appliances (with their AIX server line, DB2 database and an open source business application stack). Either way, it’s going to be interesting to see how well Oracle digests Sun.