Oracle's War on Open Source Is the Tip of a Bigger Management Problem

Last Updated Nov 2, 2010 12:31 PM EDT

There is no inherent reason to think that open source software is free. And there is no reason that software source shouldn't be available, should a company decide to make it so. But getting stuck in between the two camps can be sticky, and that's exactly what has happened at Oracle. The company asked almost three dozen developers to leave, the open source office application product line that came along with all of Sun Microsystem's other belongings. Set aside who's right and who's wrong here for a moment, and the situation brings two important management lessons into clear relief.

The developers, disappointed with how Oracle managed the OpenOffice project, split off the open source code into a new version, free of the database company, called LibreOffice. This made Oracle management none too happy, particularly as one of the big supporters of LibreOffice is Google (GOOG), which Oracle is currently suing for patent and copyright infringement over its Java implementation on Android. (It must be the season for legal arm twisting as Google, whose own Apps are a LibreOffice competitor, has sued the Interior Department over alleged favoritism toward Microsoft (MSFT) in a search for a new email system.)

Public attention has largely fallen onto the displeasure with which each side views the other. Open source advocates are upset that the Database Darth Vader wants to bring beloved code to the dark (i.e., profitable black ink) side. Oracle seems irritated that refugees from a hippie compound want to come between it and the valuable corporate assets it spent billions to obtain. But the polarity misses the more general management lessons to learn.

The first is a problem with acquisitions. This is an often poorly executed strategy area. Many studies have found failure rates in delivering expected value ranging from 60 percent to 77 percent . Two of the major factors contributing to failure are poor understanding of the new business and flawed integration.

Both seem to have been in evidence throughout the Oracle acquisition of Sun. Oracle clearly assumed that it would be able to merge the two highly contrasting cultures, which fell short both in understanding and integration. The approaches to business were too different to mesh, and many of the important Sun software products were immersed in the company's culture. Not only does that affect employees, but also customers, who come to expect business to work a given way. Upset the boat, and you can lose both the only ones who really know what is going on technically and the people who would do business with you.

On the OpenOffice product development front, developers became concerned enough that they decided to fork the software, which means to create a separate version, and create a new organization.

Oracle asked them to drop membership in the new group, calling it a conflict of interest. Instead, they quit -- and losing 33 developers off a project at one shot will be a difficult thing to recover from. In addition, the conflict has left an opening for competitors to step in and maximize the damage, as Google has done.

The developers have company. A number of major development and marketing people have left. Not just from the OpenOffice project, but also Solaris (operating system for Sun's hardware line) and Java, the multi-platform development tool that was likely the major reason that Oracle wanted Sun.

Not only are employees, who represent a company's real intellectual assets, bailing out, but influential customers have strongly questioned Oracle's intentions. Not only did Oracle misunderstand the culture at Sun, but it fails to comprehend the culture of the customers. You can always hire software engineers (although it will take the new ones a long time to untangle what had been going on), but customers? You must woo them.

As for the second lesson, it is one for the customers. Too often companies will fail to keep their options open. Of course, this becomes more difficult as you become increasingly dependent. But there must always be an alternative.

No matter what promises or assurances a company gives you as a customer, there is no guarantee that a new owner or management team will feel compelled to keep you happy. That's true whether you consider a type of software provider or whether a given product or service will be available in the future when you need it.


Image: user xymonau, site standard license.
  • Erik Sherman On Twitter» On Facebook»

    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.