Tech Talk: Safra Catz On Why Oracle Bought Sun

Oracle CEO Safra Catz Business Insider
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Oracle’s CEO Safra Catz, co-chairing with Larry Ellison, took the stand on Monday to help make a case for why Oracle deserves $9.3 billion from Google. With the trial already a complete circus, the fact that something noteworthy and controversial happened during her time on the stand should shock absolutely nobody. Catz, long thought of as one of the biggest female rockstar CEOs in the tech world, explained why Oracle bought up Sun. Her explanation was, essentially, because they were scared somebody else would buy up Sun and demand payment for Java, which their products were heavily based upon. Naturally, that’s exactly what Oracle did. While nobody asked her outright if the entire reason that Oracle bought up Sun was to sue Google over Android and Java, the writing on the wall was there.

While it’s plenty suspicious already that one of the first things that Oracle did with their newly owned programming language was sue Google for a figure of billions that would have just about covered what they paid to acquire it, there were rumors floating around at the time of the acquisition that their plan was to sue Google all along. IBM was bidding on Sun, but Oracle made sure to outbid them at every turn. It’s no secret that they wound up overpaying vastly, paying much more than they would have had to in order to simply license the Java bits of their product. This gave them Sun’s assets and the ability to produce physical goods, such as specialized computers made for running their database software, but the most profitable part of buying up Sun, by a huge margin, would be licenses and possibly lawsuits stemming from Java.


When Oracle’s original suit figure against Google, about $6 billion, was rejected as being incredulously high, Oracle pressed on. While they did originally pay $7.4 billion to net Sun, this figure was offset by Sun’s cash on hand to about $5.4 billion. This means that Oracle’s original suit against Google, had they won, would have basically meant that they scored exclusive control over the world’s most popular programming language for free by going after the maker of one of the world’s most popular pieces of software based on that language. With a capital expenditure of that magnitude nullified, Oracle would have been free to resume normal operations under a normal budget and simply begin raking in the cash from Java licensing deals. The insinuation here is that when Google refused to play into their plan, Oracle didn’t take kindly to it and has chased them from courtroom to courtroom since then. A 2012 ruling that APIs couldn’t be copywritten and sued over didn’t stop them, they simply took it to appeals court. Meanwhile, the amount of the projected damages continued to grow. Oracle’s bottom line was supposedly heavily affected by Google during this time, with Catz saying that deals with Samsung and Amazon, for example, lost a huge chunk of profitability due to them shifting over to Android from Java, costing Oracle billions and making their flavor of Java much less popular compared to the free and open-source Android.

Essentially, the case at this point boils down to a question of fair use on Google’s part in regards to the Java APIs featured in Android. Thus, while talk of whether Oracle’s plan was to buy up Java and get a slice of Google pie is compelling, it’s ultimately somewhat irrelevant; intent notwithstanding, the entire case hinges on whether Google should have had to pay licensing fees for the bits of Java that they used in Android, which ended up netting them over $31 billion in profit thus far since 2008. The figure that Oracle is asking for, being $9.3 billion, covers three different areas; punitive damages, lost profits from would-be Java customers going to Android and, of course, Java licensing fees and a cut of Google’s profits from Android based on how much of it was using Java. It’s no big stretch to say that fair use as a concept is being explored in depth and will likely be given more strict and concrete rules, meaning that the outcome of this trial could affect the entire software world. If Google loses, they face a huge sum of money going missing and likely future challenges to any “fair use” they may be practicing. If Oracle loses, their buyup of Sun will have essentially been sunk, netting them almost no returns compared to the huge initial investment, even if it did save them from being at IBM’s mercy.