The Trefis price estimate for Oracle’s stock is $33.44, compared to market price of $21.51 at close on Wednesday.
Oracle, which makes money by selling software to businesses, will gain control of the MySQL open source database through its acquisition of Sun Microsystems. MySQL is an open source database that is free for individuals and supported by commercial licenses sold to businesses. Open source databases are a long term threat to Oracle’s lucrative database business which constitutes 36% of Oracle’s stock price, per Trefis estimates.
Since the Sun acquisition announcement there has been speculation that Oracle may end up “killing” MySQL by attempting to transition MySQL’s commercial customers to its existing line of database products. The result could be that the MySQL database market share that Oracle had captured through the Sun acquisition is ceded to rivals like Microsoft, Sybase or an alternative open source solution.
Instead of “killing” MySQL, we think Oracle will use MySQL to simply expand its reach to medium/small businesses that are MySQL’s primary customers. These medium/small businesses are currently underserved by Oracle’s own products, and often find them too pricey. Over time Oracle will continue to benefit from the long term opportunity to transition MySQL customers to Oracle products as these smaller/medium businesses experience growth. As a result, we believe Oracle will continue to grow its market share in the $8 billion new database software licenses market, steadily from 49% in 2008 to about 55% over the long term.
Within Oracle’s content on our platform, you can see how Oracle’s stock price will be impacted by changes in Database Software Licenses Market Share. You can also see how the Sun’s other businesses, such as Enterprise Servers and Storage Hardware, have been integrated into Oracle.
