Xsigo: Hardware Play for Oracle, Not SDN

When I wrote about Xsigo earlier this year, I noted that many saw Oracle as a potential acquirer of the I/O virtualization vendor. Yesterday morning, Oracle made those observers look prescient, pulling the trigger on a transaction of undisclosed value.

Chris Mellor at The Register calculates that Oracle might have paid about $800 million for Xsigo, but we don’t know. What we do know is that Xsigo’s financial backers were looking for an exit. We also know that Oracle was willing to accommodate it.

For the Love of InfiniBand, It’s Not SDN

Some think Oracle bought a software-defined networking (SDN) company. I was shocked at how many journalists and pundits repeated the mantra that Oracle had moved into SDN with its Xsigo acquisition. That is not right, folks, and knowledgeable observers have tried to rectify that misconception.

I’ve gotten over a killer flu, and I have a residual sinus headache that sours my usually sunny disposition, so I’m no mood to deliver a remedial primer on the fundamentals of SDN. Suffice it to say, readers of this forum and those familiar with the pronouncements of the ONF will understand that what Xsigo does, namely I/O virtualization, is not SDN.  That is not to say that what Xsigo does is not valuable, perhaps especially to Oracle. Nonetheless, it is not SDN.

Incidentally, I have seen a few commentators throwing stones at the Oracle marketing department for depicting Xsigo as an SDN player, comparing it to Nicira Networks, which VMware is in the process of acquiring for a princely sum of $1.26 billion. It’s probably true that Oracle’s marketing mavens are trying to gild their new lily by covering it with splashes of SDN gold, but, truth be told, the marketing team at Xsigo began dressing their company in SDN garb earlier this year, when it became increasingly clear that SDN was a lot more than an ephemeral science project involving OpenFlow and boffins in lab coats.

Why Confuse? It’ll be Obvious Soon Enough

At Network Computing, Howard Marks tries to get everybody onside. I encourage you to read his piece in its entirety, because it provides some helpful background and context, but his superbly understated money quote is this one: “I’ve long been intrigued by the concept of I/O virtualization, but I think calling it software-defined networking is a stretch.”

In this industry, words are stretched and twisted like origami until we can no longer recognize their meaning. The result, more often than not, is befuddlement and confusion, as we witnessed yesterday, an outcome that really doesn’t help anybody. In fact, I would argue that Oracle and Xsigo have done themselves a disservice by playing the SDN card.

As Marks points out, “Xsigo’s use of InfiniBand is a good fit with Oracle’s Exadata and other clustered solutions.” What’s more, Matt Palmer, who notes that Xsigo is “not really an SDN acquisition,” also writes that “Oracle is the perfect home for Xsigo.” Palmer makes the salient point that Xsigo is essentially a hardware play for Oracle, one that aligns with Oracle’s hardware-centric approaches to compute and storage.

Oracle: More Like Cisco Than Like VMWare

Oracle could have explained its strategy and detailed the synergies between Xsigo and its family of hardware-engineered “Exasystems” (Exadata and Exalogic) —  and, to be fair, it provided some elucidation (see slide 11 for a concise summary) — but it muddied the waters with SDN misdirection, confusing some and antagonizing others.

Perhaps my analysis is too crude, but I see a sharp divergence between the strategic direction VMware is heading with its acquisition of Nicira and the path Oracle is taking with its Exasystems and Xsigo. Remember, Oracle, after the Sun acquisition, became a proprietary hardware vendor. Its focus is on embedding proprietary hooks and competitive differentiation into its hardware, much like Cisco Systems and the other converged-infrastructure players.

VMware’s conception of a software-defined data center is a completely different proposition. Both offer virtualization, both offer programmability, but VMware treats the underlying abstracted hardware as an undifferentiated resource pool. Conversely, Oracle and Cisco want their engineered hardware to play integral roles in data-center virtualization. Engineered hardware is what they do and who they are.

Taking the Malocchio in New Directions

In that vein, I expect Oracle to look increasingly like Cisco, at least on the infrastructure side of the house. Does that mean Oracle soon will acquire a storage player, such as NetApp, or perhaps another networking company to fill out its data-center portfolio? Maybe the latter first, because Xsigo, whatever its merits, is an I/O virtualization vendor, not a switching or routing vendor. Oracle still has a networking gap.

For reasons already belabored, Oracle is an improbable SDN player. I don’t see it as the likeliest buyer of, say, Big Switch Networks. IBM is more likely to take that path, and I might even get around to explaining why in a subsequent post. Instead, I could foresee Oracle taking out somebody like Brocade, presuming the price is right, or perhaps Extreme Networks. Both vendors have been on and off the auction block, and though Oracle’s Larry Ellison once disavowed acquisitive interest in Brocade, circumstances and Oracle’s disposition have changed markedly since then.

Oracle, which has entertained so many bitter adversaries over the years — IBM, SAP, Microsoft, SalesForce, and HP among them — now appears ready to cast its “evil eye” toward Cisco.

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Cheriton Sees Opportunity in Infrastructure

When I wrote my first post on this blog, way back in 2006, I assumed that technology infrastructure largely was a spent force. I expected incremental enhancements, gradual advances, but I didn’t anticipate another major boom or a significant disruption of the established order in what once had been a vibrant technology space.

While the technology industry as a whole can suffer from blinkered, willful optimism, perhaps I was afflicted by a different condition entirely. I might have been too pessimistic, too gloomy, dispirited by the technology downturn of the early 2000s and the lack of a meaningful, sustained recovery in the years that immediately followed.

By the way, when I refer to technology, I’m not talking about social networking such as Facebook. I understand that there’s a lot of technology behind the scenes at Facebook, but the customer-facing “social” phenomenon leaves me cold. I never did see the point of Facebook from a user’s perspective, though I understood how it could serve as an unprecedented data-mining machine for advertisers.

Opportunity Renewed

Fortunately, though, I was wrong about the decline and fall of infrastructure. It took a while, but a new era of infrastructure has arisen, based on virtualization, orchestration, and automation. Technological possibilities that we could only dream about more than a decade ago are now possible. In the networking realm, software-defined networking (SDN) is enabling comparatively outmoded network infrastructure to catch up with compute and, to a lesser degree, storage infrastructure as the promise of an application-driven, programmable data center comes into clearer view.

Suddenly, at long last, there’s new opportunity in infrastructure.

You don’t have to take my word for it, either. There are people who’ve designed and developed industry-leading technologies who espouse the same opinion. Some of these people are billionaires, and they’re backed their convictions with substantial sums of money, investing in technologies and companies with clear mandates to remake IT infrastructure.

Outrageously Wealthy Canuck

One of those people is David Cheriton, a billionaire who wears many hats. He is Professor of Computer Science and Electrical Engineering at Stanford University, where he researches networking and distributed systems, and he also serves as a co-founder and chief scientist at Arista Networks. He’s also an investor in startup companies. Back in 1998, one early-stage company in which he invested, along with Arista co-founder Andy Bechtolsheim, was Google.  The duo made a similar early investment in VMware, so they’ve done okay.

Born in Vancouver, raised in Edmonton, Alberta, and ranked 37th on a Wikipedia list of “richest Canadians”** — Forbes ranks him 21st among outrageously wealthy Canucks  — Cheriton recently spoke about innovation and entrepreneurship at a Churchill Club event in Silicon Valley. The event was co-hosted and organized by the Hua Yuan Science and Technology Association and also featured Ken Xie, who founded NetScreen (acquired by Juniper Networks in 2004) and is now president and CEO of unified-threat-management/firewall vendor Fortinet, a company he also founded.

In addition to his apparent knack as an investor, Cheriton has considerable firsthand experience as an entrepreneur and an innovator. Before he and Bechtolsheim combined forces at Arista Networks,  they founded Granite Systems, a Gigabit-Ethernet switching concern that was acquired by Cisco in 1996 for about $220 million in stock, back when shares of Cisco were continuously on the rise.  Subsequently, after the Google investment, Bechtolsheim and Cheriton combined forces again to found Kealia, which specialized in server technology based on AMD’s Opteron microprocessor.  That company was acquired by Sun Microsystems in 2004, providing technology included in the Sun Fire X4500 storage product.

Room for Improvement

In 2005, Cheriton and Bechtolsheiim followed up with Arista, then called Arastra, and its 10-GbE switching technology, which brings us to the approximate present and back to something Cheriton said at the Churchill Club event late last month. Noting that people tend to become preoccupied with the latest developments in social networking and mobility, Cheriton expressed his enthusiasm for infrastructure, as an investment vehicle as well as an area in which he has an abiding technical interest. As quoted in a BusinessWeek article, Cheriton said: “I think there is an opportunity to go back and say, ‘Gee, I think there’s lot of room for improvement in the infrastructure.’ ”

Reinforcing that point, he noted that technology infrastructure today is predicated on ideas that are about 30 years old. The network was the place to start the infrastructure refurbishment, Cheriton believed, and Arista Networks grew from that conviction.

But Cheriton hasn’t stopped there. He also founded a company called Optumsoft, about which not much is known. On its website, Optumsoft is described as an early-stage startup company “taking distributed computing and distributed software development mainstream.” Quoting from the website:

Recent advancements in multi-core computing systems, coupled with the ever increasing functional and performance requirements of software has created an exciting market opportunity for addressing the programmatic and architectural issues involved in modern software development. Optumsoft is addressing this growing market with a novel technology approach that is transparent, scalable, and portable, resulting in significant improvement to the development and maintenance of distributed/parallel structured software systems. Early production usage by commercial clients has validated the technology and value proposition.

Last fall, an anonymous source suggested on Quora that what Optumsoft was building related to “how to structure object-oriented RPC in a way that makes it easy to build robust systems.  The technology behind Arista’s EOS is based on some of these ideas, as was software structure at a previous startup, Kealia.  The technology includes an IDL and a C++ runtime, similar to what you’d get using CORBA.”

Nebula and Tintri

On the investment side, Cheriton and Bechtolsheim have put money into Nebula, which has venture-capital backing from Kleiner Perkins Caulfield & Byers and Highland Capital Partners. Built on OpenStack, the Nebula Enterprise Cloud Appliance is designed to provision and configure flexible, scalable cloud-computing infrastructure. Although it doesn’t say so on the Nebula website, previous reports indicated that Arista’s networking technology is included in the Nebula appliance.

According to the BusinessWeek article,  Cheriton also has a stake in Tintri, co-founded by Kieran Harty and Mark Gritter. Harty was EVP of R&D at VMware for seven years, and Gritter was one of the first of Cheriton’s employees at Kealia. They’ve assembled a PhD-laden engineering team that has developed a virtual-machine-aware storage appliance designed for virtualized environments, which the company says have been underserved by older storage technology that apparently contributes to “VM stall.”

Another early-stage investment that Cheriton made was in Aster Data Systems, a purveyor of a massively parallel DBMS that runs on clustered commodity servers. Already a minority owner of Aster, Teradata bought the 89% of the company it didn’t own for $263 million last year.

Cheriton has made bets on infrastructure, and he’ll likely make others. It’s an encouraging sign for those of us who gravitate to that part of the industry.

(**No, I am not on the list, but thanks for asking.)

Update on IBM’s Acquisition of Platform Computing

Despite my best efforts, I have been unable to obtain specific details relating to the price that IBM paid to acquire high-performance computing (HPC) workload-management pioneer Platform Computing. If anything further surfaces on that front, I’ll let you know.

In the meantime, others have made some good observations regarding the logic behind the acquisition and the potential ramifications of the move. Dan Kusnetzky who has longstanding familiarity with Platform in both a vendor and analyst capacity, provides a succinct explanation of what Platform does and then provides the following verdict:

“I believe IBM will be able to take this technology, integrate it into its “Smarter Computing” marketing programs and introduce many organizations to the benefits of harnessing together the power of a large number of systems to tackle very large and complex workloads.

This is a good match. “

Meanwhile, Curt Monash recounts details of a briefing he had with Platform in August. He suspects that IBM acquired Platform for its MapReduce offering, but, as Kusnetzky suggests, I think IBM also sees a lot of untapped potential in Platform’s traditional HPC-oriented technical markets, where the company already has an impressive roster  of blue-chip customers that have achieved compelling business results in cost savings and time-to-market improvements with the company’s cluster-management and load-sharing software.

There’s a lot of bluster about the cloud in relation to this acquisition, and that undoubtedly is a facet IBM will try to exploit in the future, but today Platform still does a robust business with its flagship software in scientific and technical computing. 

Platform apparently told Monash that it had “close to $100 million in revenue” and about 500 employees. The employee count seems about right, but I suspect the revenue number is exaggerated. According to a CBC news item on the acquisition, market-research firm Branham Group Inc. estimated that Platform generated revenue of about $71.6 million in its 2010 fiscal year. Presuming the Branham numbers to be correct, Platform would have 2011 fiscal year revenue ranging from $75 million to $80 million.

Finally, Ian Lumb, formerly an employee at Platform (as was your humble scribe) considers the potential implications of the acquisition on Platform’s long-heralded capacity to manage heterogeneous systems and workloads for its customers. This is a point that many analysts missed, and Lumb does an excellent job framing the dilemma IBM faces. Ostensibly, as Lumb notes, it will be business as usual for Platform and its support of heterogeneous systems, including those of IBM competitors such as Dell and HP.

But IBM faces a conundrum. Even if it were to choose to continue to support Platform’s heterogeneous-systems approach in deference to customer demand, the practicalities of doing so would prove daunting. Lumb explains why:

“To deliver a value-rich solution in the HPC context, Platform has to work (extremely) closely with the ‘system vendor’. In many cases, this closeness requires that Intellectual Property (IP) of a technical and/or business nature be communicated – often well before solutions are introduced to the marketplace and made available for purchase. Thus Platform’s new status as an IBM entity, has the potential to seriously complicate matters regarding risk, trust, etc., relating to the exchange of IP.

Although it’s been stated elsewhere that IBM will allow Platform measures of post-acquisition independence, I doubt that this’ll provide sufficient comfort for matters relating to IP. While NDAs specific to the new (and independent) Platform business unit within IBM may offer some measure of additional comfort, I believe that technically oriented approaches offer the greatest promise for mitigating concerns relating to risk, trust, etc., in the exchange of IP.”

It will be interesting to see how IBM addresses that challenge. Platform’s competitors, as Lumb writes, already are attempting to capitalize on the issue. 

No Ruse: Hurd Joins Ellison at Oracle

A changing of the guard has occurred in the Oracle executive suite, with Charles Phillips on the way out and Mark Hurd, former chairman and CEO of Hewlett-Packard, taking his place as co-president alongside Safra Catz.

The move is both unsurprising and surprising at the same time. For example, it’s not surprising that Phillips is leaving Oracle. Reports had persisted for some time that he might depart. His departure needn’t have coincided with Hurd’s arrival, but that’s the way it worked out.

Comfortable Arrangement

Speaking of which, Hurd’s move to Oracle makes perfect sense considered within the context of his friendship with Larry Ellison. The two apparently are close, and they share considerable mutual admiration and respect. There’s every reason to think they’ll be able to co-exist at Oracle’s executive heights.

That said, I’m still not sure that Oracle needs Mark Hurd. It’s already a lean, mean ship, and Hurd’s modus operandi is to identify and rectify operational inefficiencies in pursuit of cost reductions. Oracle does that well today, and probably could have continued to do so without Hurd joining the company, no doubt at great expense to shareholders.

From Tennis Court to Boardroom

I have to wonder whether Ellison is making this move purely on the basis of business considerations or whether he made the decision more for personal reasons. It certainly feels like executive fiat. I don’t think Hurd will do any lasting damage at Oracle — he’ll be reporting to Ellison and will not be given the latitude he had, up until near the end, at HP — but nor am I convinced that he offers a lot of upside value.

I had thought Ellison and Oracle might have been engaging in a ploy in leaking discussions of Hurd taking a job there. I thought Ellison might have been trying to help his friend’s negotiating position in relation to a CEO position elsewhere. There had been talk to that effect in recent days.

In the end, though, the tennis tandem have become boardroom buddies. What will be interesting to watch now is not so much how Hurd coexists with Ellison, but how well he gets along with co-president Safra Catz. You know the old saying: Two’s company, three’s a crowd.

Pondering Hurd-to-Oracle Reports

Everybody knows by now that Oracle CEO Larry Ellison and former HP CEO Mark Hurd are good friends, on and off the tennis court.

Ellison, you might recall, sent the New York Times an impassioned email missive decrying the HP board’s decision to show Hurd the door, ostensibly over dubious expense reports. That futile intervention by the Oracle chieftain was testament to his loyalty to his friend and it might actually have reflected Ellison’s true estimation of Hurd as an executive.

We’ll know soon enough, because reports have surfaced in the Wall Street Journal and the aforementioned New York Times suggesting that Oracle might offer a top executive position to Hurd. Other reports also suggest that Hurd could snag a seat on Oracle’s board of directors.

These reports all are fueled by “a person briefed on the talks” between Hurd and Ellison. The person in question has chosen to remain anonymous, apparently due to the confidentiality of the matters under discussion. We don’t know whether the talks are being leaked by somebody inside Oracle, someone close to Hurd, or by other parties with knowledge of the situation.

Like Dropping Anvil on Subdued Prisoner

If Hurd were to join Oracle, it would be in a senior executive capacity, especially if he also were to claim a position on the board. This suggests that one of Oracle’s current co-presidents, Charles Phillips or Safra Catz, could be displaced as a result of Hurd’s ascension. Of the two, Phillips is thought by many to be more likely to suffer if Hurd were to join the Oracle executive team.

Still, if Hurd were to join Oracle, I’d attribute the move to Ellison’s friendship with Hurd rather than to any burning need for Hurd’s talents at Oracle. Hurd would not come cheaply, and — on the basis of a rigorous cost-benefit analysis, surely an approach Hurd would appreciate — it’s not obvious that he’d bring a return on the considerable investment he’d entail.

After all, Oracle doesn’t have difficulty running a tight ship. Why would it have need for the services of an executive who is the technology industry’s answer to Al Dunlap, a man variously honored with affectionate sobriquets such as “Chainsaw Al” and “Rambo in Pinstripes.” Adding Hurd to the mix would be overdoing it, like dropping an anvil on a prisoner who’s already been subdued.

Potential Negotiating Leverage

The fact is, Oracle doesn’t need Hurd’s operational help with the integration of Sun Microsystems, and Larry Ellison doesn’t require or want assistance plotting the strategic course and vision for his company. Besides, Hurd’s strength is not and never was vision. His calling card, his speciality, is finding and then mitigating or eliminating operational inefficiencies. Oracle doesn’t have many of those.

All of which causes me to wonder whether this story has been leaked for other reasons. We know Ellison and Hurd are friendly. We know Ellison is inclined to come to his friend’s assistance. Allow me to hypothesize for a moment. Let’s assume Hurd is in negotiations for a CEO job with another technology company in Silicon Valley, one whose operations might benefit from some vigorous austerity measures. Let’s further suppose that Hurd is trying to negotiate the sort of boffo compensation to which he has become accustomed. Finally, let’s assume that the company in question is reluctant to acquiesce to his demands. In those circumstances, a putative offer of a plum job at Oracle could provide Hurd with convenient negotiating leverage.

No matter what transpires, I would not be surprised to see Hurd take a board seat at Oracle, effectively substituting for the one he lost at News Corporation in the wake of the scandal (or whatever it was) at HP. Ellison and Hurd are friends, after all.

Dell Reloads in Mid-Market Data Center

Last week, Dell announced a fusillade of products for small- and medium-sized enterprises looking to benefit from converged, virtualized data centers.

Depending on one’s vantage point, Dell proactively announced the products to offer its mid-sized enterprise customers interoperable solutions that will allow them to derive efficiencies from data-center automation;  or it made the announcement reactively, in a bid to preclude incursions into its installed base by Cisco, IBM, HP, and perhaps even Oracle, which has yet to play the data-center-hardware hand that it was dealt in its marathon acquisition of Sun Microsystems.

In receiving an update yesterday from Brian Payne, director of Dell PowerEdge servers, and Mike Roberts, senior manager of Dell PowerEdge servers, I was struck by how much emphasis the Dell spokesmen placed on two key themes: openness and innovation.

For Dell, architectural openness is defined by interoperability, adherence to industry standards, and customer freedom from proprietary lock-in. Dell draws a distinction between its interoperable approach to data-center networking and the proprietary offerings of Cisco and, increasingly, HP. Dell contends that customers that adopt  converged data-center solutions from HP or Cisco — encompassing servers, storage, networking, and virtualization — could find themselves tied to a vendor that stops innovating. For those customers, the result could be competitive disadvantage, especially if their counterparts patronize vendors  — for instance, Dell — that offer an interoperable, open model.

This leads to a discussion of innovation. Dell is at pains to stress that it has innovated and continues to innovate in the data center. Indeed, while there’s nothing revolutionary or dramatically disruptive in Dell’s new slate of product announcements, the company is making noteworthy advances in its server architectures, its storage offerings, its management software, and its support for virtualization. It’s also innovating, through its Dell Business Ready Configurations, in offering preconfigured solution bundles to mid-size enterprises in target vertical markets.

Although Dell suffers from a brand-image hangover that has proven difficult to shake,  the company has escaped from the ghetto of white-label box vendors. To be sure, Dell still has chapters to write in its data-center narrative, but it is proving adept at devising and deploying viable technical architectures and business solutions for its target markets.

In that respect, what Rob Enderle, principal analyst at the eponymous Enderle Group, told Channel Insider rings true:

“The market likes choice and specialization. No one vendor, since IBM owned this market, has been able to be expert enough at all business sizes and types providing room for each vendor to specialize and carve out a market.”

“Dell tends to favor firms who want to do much of the work themselves, aren’t particularly interested in global services, and want a hardware vendor who is at arm’s length from software to avoid lock-in. There appear to be enough of those folks to sustain Dell.”

I generally agree. Moreover, I think a case can be made that those customers, once they’ve made a significant data-center buying decision, are unlikely to switch vendors unless they’re given a compelling reason to do so. Usually, though not necessarily, that impetus would involve their incumbent vendor falling woefully behind the innovation curve over a sustained period.

Dell is cognizant of the risk, which explains why the company is pushing the innovation theme so forcefully. It wants customers to understand that its interoperable converged data center doesn’t involve an innovation tradeoff in relation to alternatives from IBM, HP, and Cisco.

Accordingly, Dell draws attention to the fact that its new blade-server hardware features the latest industry-standard microprocessors from Intel (in the PowerEdge M710HD) and AMD (in the PowerEdge R715), not to mention an interesting utilization of general-purpose GPUs in its PowerEdge M610x.

Similarly, Dell cites automated data tiering and performance improvements in its EqualLogic PS6000XVS and PS6010XVS storage arrays. It also talks up the performance advances in its PowerVault MD3200 and PowerVault MD3200i storage arrays.

On the networking side, with the release of PowerConnect-J series of products, the first offerings derived from Dell’s OEM agreement with Juniper, Dell emphasizes that its customers can rely on Dell’s networking partnerships to ensure that they don’t suffer from Cisco envy. There is a similar message in Dell’s extension of the PowerConnect B-Series of chassis-based switches OEMed from Brocade. which recently gave its own notice that it has its head and heart back in the enterprise-networking fight.

Dell also draws attention to energy-efficiency enhancements delivered in its M1000e blade-server chassis, and it notes systems-management updates to its Lifecycle Controller, Chassis Management Controller, and Integrated Dell Remote Access Controller (iDRAC). Yes, a lot of this is rustic meat and potatoes, but it’s all part of the data-center buffet, and Dell needs to demonstrate that it hasn’t forgotten to provide  a full menu.

When I spoke with Dell, I got the feeling that it fears Cisco most of all. IBM plays upmarket, mostly out of Dell’s neighborhood, and HP is a known commodity — in more ways than one — perhaps with a reputation for enterprise innovation that is no longer warranted under the grim cost-cutting scythe of Mark Hurd’s technocrats of doom.

Cisco, though, seems to command Dell’s full attention. There appears to be a belief within Dell that Cisco won’t be content to spread its Unified Computing System (UCS) for data centers exclusively to high-end enterprises and cloud-based service providers. That assumption is probably correct. Dell has reason to be concerned.

Then again, healthy paranoia never hurt anybody. If concern about Cisco keeps Dell focused on delivering solutions to its core customers in the middle market, the preoccupation will have been a positive stimulus.

As a company, though, Dell might have a better chance defending its turf if it put more resources into its SME and enterprise strategies and product portfolios and proportionally fewer resources into consumer markets, where it seems destined to lose market share and squander brand equity.

XML Co-Inventor Spurns Oracle for Google

Unwilling to make the corporate voyage from Sun Microsystems to its new owner, the good ship Oracle, XML co-inventor Tim Bray has abandoned ship for the fecund shores of Google.

One could say Google made him a deal he couldn’t refuse. But in a good way, not like in the Godfather.

Bray seems reasonably pleased with his new corporate home, and he’s definitely excited about his new role as developer-advocate for Google’s Android.

Apparently there’s a good, untold story about what sparked his departure from Oracle. Quoting from Bray’s blog:

I’d had an offer to stay with Oracle which I decided to decline; I’ll maybe tell the story when I can think about it without getting that weird spiking-blood-pressure sensation in my eyeballs. So I reached out to a couple of appealing potential next employers, both were interested, and Google seemed like the best bet.

In a column along the right side of his blog, Bray offers a blunt statement of orientation: “I work for Google, but the opinions expressed here are my own, and no other party necessarily agrees with them.”

Indeed, as I read his blog, I got the distinct impression the Google PR team will have its hands full keeping Bray “on message.” Here’s what he has to say about his new employer:

It’s now too big to be purely good or in fact purely anything. I’m sure that tendrils of stupidity and evil are even now finding interstitial breeding grounds whence they will emerge to cause grief. And there are some Google initiatives that I feel no urge to go near.

It’s not exactly Google boilerplate copy, is it? Still, I admire the frankness, honesty, and acuity of the sentiments. It isn’t that Bray doesn’t like Google — he goes on to list plenty of reasons why he’s joined his new employer — it’s just that he isn’t willing to serve as spinmeister or unquestioning apologist for everything the company does or touches. He’d make a lousy corporate publicist, but he’ll probably serve with distinction in his new role.

Bray relishes not only leaving Oracle and joining Google, but also the prospect of competing against Apple in what is popularly and rather tritely referred to as the “mobile-platform war.” (None of this stuff is war, folks, but I understand the need some media types have to sex it up for mass consumption. Readers are seen as dim bulbs, responsive only to the synthetic fertilizer of lurid headlines and shrill sensationalism. I tend to treat my garden a little more organically.)

Anyway, back to Bray’s antipathy toward Apple, which is considerable and genuine. Says Bray:

The iPhone vision of the mobile Internet’s future omits controversy, sex, and freedom, but includes strict limits on who can know what and who can say what. It’s a sterile Disney-fied walled garden surrounded by sharp-toothed lawyers. The people who create the apps serve at the landlord’s pleasure and fear his anger.

I hate it.

I hate it even though the iPhone hardware and software are great, because freedom’s not just another word for anything, nor is it an optional ingredient.

Even though he feels sharp antagonism toward Apple’s vision of the mobile Internet’s future, Bray acknowledges the “greatness” of Apple’s software and hardware. He’s not indiscriminately throwing verbal hand-grenades over the parapet; he’s offering targeted criticism, consistent with an open-systems, developer-friendly worldview.

I look forward to Bray’s post on why he decided not to join Oracle.

Will HP Pursue Database and Router Acquisitions?

In his column this week at MarketWatch, John C. Dvorak muses about potential acquisitions that Hewlett-Packard might pursue.

Seizing on recent comments from HP CEO Mark Hurd regarding intensifying competition with Cisco and Oracle — proud owner of Sun Microsystems and all of its hardware and software technologies — Dvorak posits that HP might acquire a router vendor and a database vendor to counter its rivals.

The pundit then goes on to cite Sybase as a potential HP database acquisition. He mentions Juniper Networks as a router vendor HP might like to purchase.

My view is that HP doesn’t have to buy either company. Anything can happen (and usually does), but, presuming that HP feels a need to own routers and database software, it has other options. It might not even need to pursue acquisitions to fill the perceived gaps.

Let’s consider database-management software. It’s mostly a mature, slow-growth market in the developed world, where competitive displacement is a daunting proposition. Meanwhile, open-source databases and Microsoft SQL Server are the ascendant offerings in fast-growing developing markets.

Oracle salesmen give prospective customers in China and India — and many other countries besides — a toxic case of sticker shock. Not coincidentally, one of the reasons Oracle was so keen on owning MySQL was so that it could have a cudgel with which to beat Microsoft in developing markets.

Does HP — with its significant professional-services presence — really need Sybase? I don’t think it does. Instead of plunking down good money for database vendor, why doesn’t HP just sell OpenSQL the way it and IBM sell Linux for servers? No muss, no fuss. And it gets a product offering that can be priced affordably, with services as part of the package, for the fast-growing developing world.

More likely, HP could just partner aggressively with Microsoft, bundling Microsoft SQL Server into its solution portfolio, confounding Oracle and IBM in the process. Don’t dismiss this possibility. HP and Microsoft already partner extensively in this area and in others.

With regard to routers, does HP really need Juniper? I think HP would only buy Juniper if it wanted to go head to head against Cisco at carriers and wireless operators as well as in enterprise — and I’m not sure that’s HP’s game. If HP is focused primarily on enterprises, then it’s already (presuming China okays the purchase) got 3Com, which produces a range of cost-effective enterprise routers and could develop higher-end extensions to that product portfolio if given the corporate mandate to do so.

HP doesn’t need routers. It already has them.

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.

Oracle and EC Positions Harden in Wake of Statement of Objections

Now that the European Commission (EC) has issued a formal statement of objections to Oracle’s proposed acquisition of Sun Microsystems for $7.4 billion, misdirected debates will ensue on multiple fronts.

We could argue all day about what ought to happen, what should happen, but it doesn’t matter. What we think is irrelevant to this process and to the ultimate disposition of Oracle’s bid for Sun.

What matters now are two things: the adamancy of the EC’s opposition to Oracle’s Sun acquisition, which turns on competitive concerns about the former’s ownership of MySQL in the database market; and how Oracle responds to that opposition.

Given the unusually prompt and surprisingly vituperative counterattack that an EC official delivered in the wake of Oracle’s disdainful reply to the European regulatory body’s statement of objections, I don’t think we should count on the EC to suddenly back down after seeing the sweet light of reason in Oracle’s argumentation.

So far, we are not seeing the two sides angle toward a compromise or reconciliation. If anything, they’re heading in the other direction, hardening their respective positions and digging in for a protracted battle.

Initially, when Oracle first announced its bid for Sun, we didn’t see much discussion of MySQL as a deal consideration. Some analysts had estimated that MySQL accounted for about $300 million in revenue in its last fiscal year. That might not seem like a huge amount, but remember that MySQL is doing well in database-management markets that are growing fast – those in developing countries such as China, India, Southeast Asia, Eastern Europe, and Latin America.

Bear in mind, too, that Oracle isn’t a major player in those markets. Its flagship database software is too expensive to compete in cost-sensitive markets where many businesses are at earlier stages of development than their counterparts in mature economies. In that context, one can see that Oracle views MySQL as a ticket to growth in a world where growth has become harder to attain. What’s more, MySQL gives Oracle a competitive entry in those high-growth markets against its longtime nemesis Microsoft and that vendor’s Microsoft SQL Server.

Does Oracle want to give up MySQL and leave behind an opportunity to gain share, revenue, and profitability in growth markets where it currently isn’t prospering against its longtime adversary? In a word, no.

Oracle wants MySQL. It doesn’t view the open-source database as incidental to its acquisition of Sun. Instead, Oracle sees MySQL as an essential asset, one it very much wants to own.

Look at it this way: Anything Oracle would cobble together with Sun’s hardware and other software for a data-center convergence battle against IBM, HP, and Cisco would confront prolonged, stiff competition in a war of attrition for consolidation spoils in mature data centers. That’s a war with waging, yes, but it’s one Oracle isn’t certain to win, and Larry Ellison and his team know it.

Meanwhile, MySQL represents an attractive, high-probability hedge against the more speculative data-center initiative. Unlike Sun in the data center, MySQL is on the ascent in the developing world’s database-management markets. It’s number one or two already in some key high-growth jurisdictions, and Oracle – with its ample resources and prodigious sales machine – could drive even greater returns. MySQL’s market opportunity isn’t as big as the one associated with the data-center push, but it’s probability of return is higher. Oracle knows it, too.

So, Oracle won’t let go, and the European Commission is spoiling for a fight. I’m not sure why Oracle went into street-fighting mode, but its truculent stance seems unlikely to persuade the EC to reconsider its position. Increasingly, it seems the EC will only be appeased if Sun consents to divest MySQL before or concurrent with the Sun acquisition.

What’s likely to happen now is that Oracle basically will object to the statement of objections. With no softening or surrender likely in the positions or the EC and Oracle, the current impasse is likely to lead to a formal rejection of the deal by the EC. According to a piece in the Wall Street Journal, here’s how that process would look:

The European Commission is due to make a final ruling on the deal by Jan. 19. Oracle could appeal if the EU ends up blocking the acquisition. In that event, the case would head to trial, and the process could drag on for months or even years, said Bert Foer, president of the American Antitrust Institute, a nonprofit group that isn’t affiliated with the case.

All the while, Sun’s asset value will depreciate. Oracle already says Sun is losing approximately $100 million per month as this acquisition’s approval is delayed.

Would Oracle just pull the plug and walk away, invoking a $260-million breakup fee? The consensus is that Oracle isn’t leaning in that direction. That, in and of itself, tells you how much Oracle wants this deal to go through, and it also tells you that MySQL is a significant element in Oracle’s grand design.

Oracle Threatens “War” Against EC Regulators

I wrote earlier today that push was coming to shove in the standoff between the European Commission (EC) and Oracle regarding the former’s in-depth review of the latter’s pending $7.4-billion acquisition of Sun Microsystems.

Perhaps I understated matters.

If a report by Paul Meller of IDG News Service is accurate, Oracle is preparing to take the battle to the hockey rink, with the gloves coming off and the jerseys of EC regulators getting pulled over their heads in the ensuing melee.

Anticipating a statement of objection from the EC this week. Oracle is planning to mount an aggressive onslaught against the European regulatory body.

Said an anonymous source, “familiar with Oracle’s thinking”:

“The ball game would change dramatically if the Commission issues a statement of objections.

Oracle has been holding back until now, and contrary to what the Commission says, it has addressed the substance of the Commission’s concerns about the deal in huge abundance.”

Holding back? Oracle? That alone sounds farfetched, but I’ll let it pass.

Of course, the sticking point remains MySQL and the competitiveness of the database market. The EC contends that Oracle hasn’t satisfied concerns regarding how Oracle’s ownership of MySQL would affect competition in the database market. Oracle, if the anonymous source quoted by Meller is correct, believes it has addressed the EC’s concerns.

Meller’s source also confirms what has been written here before: that Oracle sees MySQL as “a strategic imperative of the deal.” Oracle wishes to use MySQL as its competitive entry against Microsoft in SMB accounts and in developing markets, such as China, India, Eastern Europe, and Latin America. For Oracle, owning MySQL is all about beating Microsoft in fast-growing database markets where its existing products give prospective customers sticker shock.

Another anonymous source, “close to the merging companies,” suggested that the merger file was handled in the summer months by “B-team” European regulators while the frontline roster of EC competition bureaucrats was enjoying lengthy seasonal vacations. I suppose it’s never too early to exploit the anti-European stereotype of indolent Old World grandees spending the summer under sun umbrellas on Mediterranean beaches.

One of the anonymous sources in Meller’s story said an EC formal objection to the Oracle-Sun merger will trigger transatlantic “war,” with American politicians, such as Speaker of the House Nancy Pelosi, ready to intercede on Sun’s behalf. It would be similar to the U.S. government’s reaction to the last major deal blocked by the EC, involving GE’s bid to acquire Honeywell in 2001, according to the source.

What we’re seeing now are preemptive hardball tactics from Oracle. It’s trying to intimidate the EC into backing down, into letting the deal go through unmolested. The intimidation might work, with Oracle’s saber rattling persuading the EC not to spark a transatlantic row by further obstructing or denying the acquisition.

Then again, the tough-guy tactics could backfire. EU Competition Commissioner Neelie Kroes doesn’t seem a shrinking violet. On this rink, on European soil, she just might be willing to drop the gloves with Larry and Safra.

Push Coming to Shove in Oracle-EC Standoff

As Oracle and the European Commission continue to square off over the former’s pending $7.4-billion acquisition of Sun Microsystems, the eventual outcome remains in doubt even as the respective positions of the principals become unambiguous.

With the Financial Times reporting yesterday that Oracle is braced for a formal objection from Brussels to its planned Sun acquisition, we know that positions have hardened.

The EC is demanding that Oracle prove that its ownership of MySQL, which currently belongs to Sun, will not compromise competition and customer choice in the database market. Alternatively, presuming Oracle cannot satisfy EC concerns regarding competitive harm that would result from its ownership of MySQL, European antitrust regulators would like Oracle to agree to the concession of divesting MySQL.

All indications suggest that Oracle has no interest in parting with MySQL. For Oracle, that open-source bauble represents a critically valuable piece of Sun’s corporate domain. There is no way Oracle would be inclined to leave it behind.

Similarly, one can reasonably conclude that Oracle obviously has not been successful in persuading the EC that, from a competitive perspective, it would represent a responsible, trustworthy custodian of MySQL. I am not privy to the case Oracle has made at the EC nor to the expectations or the negotiating position the EC has assumed. Still, given what we do know, it’s clear no headway is being made.

If the EC invokes a formal objection, Oracle’s acquisition of Sun will not be dealt a lethal blow. What’s more, a possibility exists, as the article in the Financial Times says, that “one side or the other will back down, according to observers in Brussels.”

But it’s getting late in the game, and Oracle has noted that Sun, which is shedding employees and cutting costs during this extended period of regulatory purgatory, is losing approximately $100 million monthly. Meanwhile, Sun’s data-center rivals — IBM and HP — feast on the uncertainty surrounding the company’s eventual fate.

Make no mistake, there is uncertainty surrounding Sun’s fate. It isn’t as if IBM and HP have to resort to exaggeration or fabrication to frighten Sun customers into their welcoming embrace.

At some point, though we haven’t reached it yet, Oracle might decide to walk away from this deal, to pursue its data-center aspirations along some other avenue.

Watch the Sun (JAVA) stock price. It will reveal a lot about which way the pendulum is swinging. On April 20, just after the deal was announced, Sun’s shares traded at $9.15. As of noon today (November 3), Sun stock exchanged hands at $8.28 per share, down approximately 9.5 percent from when news of the acquisition broke.

For those keeping score, Oracle’s takeover bid for Sun was pegged at $9.50 per share. Sun’s share price today is down nearly 13 percent from that benchmark.