Viability of Open-Source Business Models Irrelevant to EC’s MySQL Objections

Yesterday the New York Times published a story that used MySQL as a point of departure for a broader examination of the efficacy of business models surrounding open-source software. At the end of the article, the NYT and its sources appear to have reached the conclusion that nobody except Red Hat makes money as a purveyor of open-source software.

I’m not sure that’s entirely true, though I understand and accept the broader point that’s being made: It’s not easy cranking out sustained profitability as an open-source software company.

Maybe open source is more a cultural or social movement than a profit-spinning business phenomenon. Even granting that point, I’m not sure how or whether it plays into the current brouhaha pitting Oracle against the European Commission regarding the fate of Oracle’s proposed acquisition of Sun, the current custodian of MySQL, for $7.4 billion.

We know why Oracle wants MySQL — as a competitive foil to thwart Microsoft in developing markets and the SMB space, where Oracle’s flagship database isn’t a major player — and we know that the EC has concerns about Oracle’s pending ownership of MySQL. The EC has voiced strong reservations about the competitive repercussions of Oracle’s control of MySQL, which could conceivably be neutered so that it never develops into a meaningful rival to Oracle’s high-end database offering.

The EC claims three vendors — Oracle, IBM, and Microsoft — account for about 85 percent of the world’s database market. It also contends that Oracle’s ownership of MySQL would strengthen the triumvirate’s market grip, potentially leading to market abuses by a cartel-like cabal. Ideally, the EC would like to see Oracle divest MySQL.

There might be an ulterior motive to the EC’s machinations. It’s possible that the EC sees European interests as benefiting more than American ones from the proliferation of open-source software. On the whole, though, I think Neelie Kroes, the EC’s competition chief, means what she says in the following statement:

“In the current economic context, all companies are looking for cost-effective I.T. solutions, and systems based on open-source software are increasingly emerging as viable alternatives to proprietary solutions. The commission has to ensure that such alternatives would continue to be available.”

It’s not so much about European IT dominance as it is about European (and other) companies of all types having cost-effective IT solutions at their disposal. In that context, it’s probably irrelevant whether open source is a movement or an industry with a viable business model. As long as open-source software persists, the EC will get what it wants.

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