Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Oracle's Gift to Growth Investors

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Is Oracle (Nasdaq: ORCL  ) getting too much of a good thing?

The Sun Microsystems (Nasdaq: JAVA  ) buyout gives Oracle exposure to plenty of new markets, and I don't think all of them are necessarily good for the buyer. But the whole deal is catching resistance from the European Union's antitrust regulators because Sun also comes with something Oracle knows very well.

Sun bought the MySQL database company in 2008. It took awhile to figure out exactly what Sun wanted to do with an open-source database platform. Apparently, Sun CEO Jonathan Schwartz simply wanted to introduce his other hardware and software products to a new set of customers. MySQL databases power some of the biggest names on the Internet: Google (Nasdaq: GOOG  ) runs its search engine with the help of MySQL databases, and Yahoo! (Nasdaq: YHOO  ) uses it for many parts of Yahoo! Finance, for example.

Oracle is a market-leading database expert, competing with other giants like Microsoft (Nasdaq: MSFT  ) and IBM (NYSE: IBM  ) to land lucrative license and support contracts with enterprise-class customers. Throwing MySQL into the mix would expand Oracle's market reach considerably. The company currently receives most of its revenue from enterprise IT, while MySQL is more popular among Web companies and smaller groups of enthusiasts. However, in terms of revenue MySQL would generate little added revenue for Oracle’s massive database business. It appears that European regulators are more concerned that Oracle would stifle growth of this popular open-source solution than they are about Oracle flexing added monopolistic power over databases.

So Oracle looks likely to keep Sun's hardware business and become a mini-IBM -- but will probably have to leave MySQL by the wayside. The MySQL operation could be spun out as a separate company on the public market. It could also be picked up by private investment firms and then prepared for a future IPO. Or some other acquisition-hungry giant might step in -- IBM and Mr. Softy would hit the same antitrust walls, but MySQL would be a fine fit with Google.

Me, I hope to see MySQL on the open market, because that operation on its own is small, has a dedicated base of fans and customers, and has a lot of growth ahead of it. Revenue may be small now, but Red Hat (NYSE: RHT  ) and others have proven that there’s a viable market around providing service and support around popular open-source programs. It's the spitting image of a Rule Breaker. I'd be interested from Day One. 

The comments box below can't wait to hear what you think about Oracle's superfluous databases.

Google is a Motley Fool Rule Breakers selection. Microsoft is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.

Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 984748, ~/Articles/ArticleHandler.aspx, 10/21/2016 6:36:22 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:01 PM
ORCL $37.93 Down -0.16 -0.42%
Oracle CAPS Rating: ****
GOOGL $824.06 Up +2.43 +0.30%
Alphabet (A shares… CAPS Rating: *****
IBM $149.63 Down -1.89 -1.25%
IBM CAPS Rating: ****
JAVA.DL $9.49 Down +0.00 +0.00%
Sun Microsystems,… CAPS Rating: **
MSFT $59.66 Up +2.41 +4.21%
Microsoft CAPS Rating: ****
RHT $76.96 Down -0.62 -0.80%
Red Hat CAPS Rating: ***
YHOO $42.17 Down -0.21 -0.50%
Yahoo CAPS Rating: **