EU probe ‘costing Sun $100m a month’

Oracle chief executive Larry Ellison said late on Monday night that Sun Microsystems was losing $100m a month while European regulators scrutinise Oracle’s acquisition plan for the hardware supplier.

“The longer this takes, the more money Sun is going to lose, and that’s not good for anybody,” he said.

Oracle made a $7.4bn bid for Sun in April, swooping in after talks between Sun and IBM broke down. US regulators approved the deal in August, but in September Brussels said it was scrutinising the deal.

Antitrust regulators in Europe have taken a tougher line on competition issues, particularly in the technology industry. In this case they are examining whether Oracle’s control over MySQL, an open-source Sun product, would stymie competition in the database software industry.

Although Oracle also makes database software, Mr Ellison believes European regulators are misguided in their inquiries. “MySQL and Oracle do not compete at all,” said Mr Ellison, adding that he would not sell MySQL.

Nonetheless, the uncertainty around the deal has caused Sun customers to turn to rivals such as IBM and Hewlett-Packard since the deal was announced, further harming an already-weak Sun.

Mr Ellison expressed frustration over the delay, but said he was confident the Sun deal would be approved.

“The US took their time and deliberations and cleared it. They said it was overwhelmingly a pro-competitive deal,” he said. “The Europeans have to do their, job, but I think once they do their job, they’ll come to the same conclusion.”

Mr Ellison made his comments during a rare and wide-ranging interview hosted by the Churchill Club, a prominent Silicon Valley forum. During the more than hour-long discussion, Mr Ellison also laid out his vision for a new generation of integrated computer systems. “We believe in this model where we deliver complete computers systems,” he said.

Rather than competing over individual components, Mr Ellison said he wants Oracle to provide end-to-end systems for the world’s largest organisations.

There has been speculation that Oracle, a software company, would sell off Sun’s substantial hardware divisions. But Mr Ellison said he would keep every part of the the company, including Sun’s data storage lines.

“We think by combining our hardware with our software, we can deliver products that can be the backbone of most enterprises in America,” he said. “We are very interested in running airline reservation systems and banking systems, and that involves hardware and software.”