Will combined company be called Oracle or Sleepycat?

That is the first comment left on the blog of the Sleepycat CEO Mike Olson, as he announces Oracle is acquiring his company.

Initially I chuckled when I read the comment. Sleepycat has around 25 employees!  But it may be prophetic (the comment writer will probably laugh his head off when he hears "prophetic"). Which reflects the future of the company? Or does anything really change?

Mike wrote a chapter titled "Dual Licensing" in the Open Sources 2.0 book. Sleepycat's site explains the licensing "The Sleepycat open source license permits you to use Berkeley DB, Berkeley DB Java Edition or Berkeley DB XML at no charge under the condition that if you use the software in an application you redistribute, the complete source code for your application must be available and freely redistributable under reasonable conditions. If you do not want to release the source code for your application, you may purchase a license from Sleepycat Software."

In effect, Sleepycat has learned to leverage the open source community for development, testing etc. It shares that "freeness" to development partners whose extensions it can itself harness. But if you want to make the resulting product proprietary (or just do not want to expose the resulting source code) you need to buy the commercial license.

Now imagine if Oracle can learn to do the same. Leverage a robust open source development community. Take advantage of free extensions in its community. Yet count on the privacy needs of its corporate customers to keep selling commercial licenses under the older model.

The risk for Oracle, of course, is that you can alienate the open source community, as this panel at OSBC discusses (courtesy of Ross Mayfield). Which to me, is why Sleepycat's reputation with the community and its ability to juggle dual licensing, more than its technology, is what makes the acquisition interesting for Oracle.

The other fly in the ointment is whether the commercial licensing can stay at older price points. Customers have long known that 60, 70, 80% discounts are common in enterprise software. And they tie maintenance to discounted list. If they know there is a 100% discount on the price list - the "no charge" model, the commercial license pricing will inch towards that.

On his blog Jeff Nolan of SAP asks whether this is game changing and whether SAP is fighting yesterday's war. In some ways, with its X-Apps strategy and propagating its NetWeaver and other tools in to an ecosystem, it is itself harnessing a wider range of partner products. As usual though, SAP does it in its own proprietary way. But Oracle could be starting a "scorched earth" pricing strategy as commercial pricing comes under significantly more pressure.  That is a war SAP is not prepared to play. It would need to think "lean" in most of its and its partners operational areas - it is culturally not ready to.

Can Oracle manage to pull off Dual Licensing and keep commercial prices high? Is it being suicidal by starting a price war? We will know soon enough.

Can I suggest a name for the combined Oracle/Sleepycat?

CrazyFox.

Update: Jeremy Zawodny says Oracle acquisitions are not about MySQL . Agree much more strategic issues at play as I write above.

Comments

[Zoli Erdos]

OraCat