This article Oracle’s Open-Source Shopping Spree in Business Week Online suggests that Oracle is involved in serious discussions with JBoss, Zend and SleepyCat about a take over – for a total of $600 Million. I find it hard to believe this is serious – one would think that Larry has enough to chew on at them moment (although probably once you have swallowed something you do not need to chew it unless you are a cow). JBoss with its Application Server and Hibernate framework for ORM is a very serious player on the open source front in the J(2)EE arena. However, would taking that player out bring a lot of business to Oracle? Or would Oracle have the products continued as open source products, getting revenue from services? That is a business model that does not suit Oracle at all, given the profit margins expected by its shareholders. Or would Oracle expect customers that "buy in" into the (Oracle) Open Source products from the JBoss stable to also spend money on commercial Oracle products, like its database or AppServer add-ons? Or would it pull the plug on the JBoss products after some time? Or is it all just a hoax? The article seems serious enough though. It states: "The JBoss purchase, even at a premium, is a way to build market share in middleware at a much lower price [than buying BEA would cost]."
The article concludes by saying: "Oracle is the only company selling databases, a full line of applications, and middleware for large corporations. Microsoft (MSFT)
does the same with midsize companies, while IBM doesn’t do
applications, and SAP doesn’t sell databases. As open-source versions
of all of these technologies gain steam, the last thing Ellison &
Co. want is another major software vendor to cobble together comparable
depth.Still, it’s a gutsy strategy.
can be up to 90% cheaper than other software, and that could feel
threatening to Oracle employees peddling databases and middleware in
the traditional manner. Oracle could be setting up a culture clash the
likes of which it has never seen. And as always, a software company’s
biggest assets are typically its engineers. If they head for the door,
Oracle is just buying code and — in the case of JBoss — a customer
base that’s largely getting a free ride.
Another unknown is how
the deals will sit with the vast open-source community. Technologies
like PHP and JBoss are key ingredients in the bulk of open-source
deployments, and if these deals go through they’ll be in the hands of a
large traditional software player. Selling the open-source community on
Ellison’s plan might prove just as hard as selling it to Wall Street.