SOFTWARE INDUSTRY NEWS

Microsoft and SAP side with EU regulators on reservations to Oracle-Sun deal

11 December 2009 , Written by Dhruv Tanwar
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While Oracle is reported to be drumming up support to address any concerns that the European Commission may have, rivals Microsoft and SAP are trying to support the EC's case so that the $7.4 billion acquisition does not go through.

Oracle's customers have come out in support for the software giant, and have reportedly told EU regulators that the acquisition would not hinder competition in the database market. Reports suggested the Oracle's customers "uniformly and consistently" supported its case during the first day of a closed hearing. The European Commission has has objected to the deal over competition concerns and had threatened to block the deal on the grounds that Oracle, as the world's second-largest software maker, might use the deal to eliminate Sun's MySQL database product as a competitor.

Speaking to reporters, Thomas Vinje, Oracle's lawyer said "I am extremely happy. There can't be a better voice than customers'. The customers said that there is robust competition in the market.” Oracle's customers who were reportedly expected to attend the hearing include telecom giants Ericsson  and Vodafone. Oracle President Safra Catz and a representative from the US Department of Justice, who earlier this year cleared the deal, were also present at the event.

Reports quoted anti trust lawyers as saying that customer support would increase Oracle's chances to get the deal cleared, possibly even without concessions. The second day of the hearing on Friday would reportedly see more Oracle customers including Spanish bank Banco Bilbao Vizcaya Argentaria SA, the British Atomic Weapons Agency, the British National Health Service and Sabre Holdings Corp present their views.

Competitors Microsoft and Germany's SAP AG are said to be laying out a strategy to back the EC's case. SAP had earlier conveyed its concerns to the EC that Oracle's acquisition of MySQL would damage competition in the database market by eliminating a key top players.

However, the remote possibility of SAP getting back at Oracle for a malpractice and unfair competition suit in California in March 2007 is something that has skipped the attention of the media for the most part. According to Wikipedia, in its 2007 complaint, Oracle had alleged that a Texas subsidiary SAP TN had used accounts of former Oracle customers to download patches and support documents from its website and appropriate them for SAP's use. The article says that later SAP had admitted wrong-doing on smaller scale than Oracle alleged in the lawsuit while admitting to inappropriate downloads but denying theft of any intellectual property.

In April this year, Sun and Oracle announced an agreement under which Oracle would acquire Sun, subject to approvals and customary closing conditions. A statement on Sun's website said that the acquisition would combine best-in-class enterprise software and mission-critical computing systems, and that Oracle plans to engineer and deliver an integrated system—applications to disk—where all the pieces fit and work together so customers do not have to do it themselves. The key benefit, the statement says, is that customers would from lower system integration costs and better system performance, reliability and security.

The US Department of Justice approved the deal in August 2009, and the EC has till January 27, 2010 to decide. The delay in the deal is reported to be costing Sun around $100 million a month.
 

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