Oracle Completes Sun Microsystems Acquisition for $7.4 Billion, Gains Java and MySQL

Oracle Corporation completed its acquisition of Sun Microsystems on January 27, 2010, for approximately $7.4 billion ($9.50 per share in cash), gaining control of critical software infrastructure including the Java programming language, MySQL open-source database, and Sun’s hardware systems business. The acquisition, announced in April 2009, was delayed for nearly a year due to regulatory scrutiny from the European Commission over concerns about Oracle’s control of MySQL, a competitor to Oracle’s flagship database product.

The European Commission opened an in-depth antitrust investigation in September 2009 and issued a statement of objections in November 2009, expressing concerns about the combination of Oracle Database with the open-source MySQL in a highly concentrated database market. The Commission ultimately cleared the acquisition unconditionally on January 21, 2010, finding insufficient evidence that Oracle would harm MySQL’s development or availability. The U.S. Department of Justice approved the acquisition without significant challenge.

Through the Sun acquisition, Oracle gained ownership of Java—one of the world’s most widely used programming languages—and MySQL, the leading open-source relational database. Oracle also acquired Sun’s enterprise server hardware business, OpenOffice productivity suite, the Solaris operating system, and other technologies. The $7.4 billion purchase price (net of Sun’s cash and debt: $5.6 billion) represented Oracle’s largest acquisition to date and transformed the company from a pure software vendor into an integrated hardware and software provider.

Oracle’s acquisition of Sun raised significant concerns in the open-source community about the future of MySQL and Java under proprietary control. Critics worried that Oracle would undermine MySQL’s development to protect Oracle Database’s market dominance, or impose restrictions on Java’s open-source ecosystem. These concerns proved partially justified as Oracle later engaged in controversial licensing disputes, patent litigation over Java (notably against Google/Android), and reduced investment in certain Sun open-source projects.

The Sun acquisition exemplified Oracle’s strategy of growth through consolidation, absorbing competitors and open-source alternatives to Oracle’s proprietary products. By controlling both Oracle Database and MySQL, Oracle effectively neutralized a major open-source threat while gaining leverage over customers and developers. The acquisition concentrated database market power, reduced alternatives for enterprise customers, and brought critical internet infrastructure (Java and MySQL) under the control of a single profit-driven corporation with close ties to government intelligence agencies.