Splitting the Arrow Through the Axe Head: Is Android Google’s Trojan Horse, Oracle’s Siren Song or will this Odyssey have a new ending
Why? That’s the question we’ve been asking ourselves. Maybe its obvious to most of the capital markets and pundits alike, but… standing upon the proverbial rock from which we survey the “weather” on the financial horizon… we have to wonder why Oracle would sue Google for distributing a free product that is based, in part, on another free product? Why would Oracle put the lifespan of Android (and likely the Java ecosystem as a whole) at risk of near-term death? Other than a suit against Microsoft (which settled for only $20 million in early 2001 and resulted in the cancelation of Microsoft’s Java license ), Oracle/Sun has not pursued significant licensing revenues for Java (particularly through litigation)… until now?
Clearly the prospect of explosive mobile revenues is the Siren song that has become the object of Larry Ellison’s sailing obsession (e.g., revenue from mobile applications alone is estimated to grow from $6.7 billion in 2010 to $29.4 billion in just three years ). Unfortunately, the allure of attractive cashflows has led Ellison to embrace the (uncharacteristically-for-him) pedestrian pathway of antagonistic litigation by asserting Oracle’s recently acquired Java patents (as part of their $7.0+ billion acquisition of Sun Microsystems on January 27, 2010 ) against Google’s Android mobile platform. It is an example of a tired strategy built on unimaginative sloth which leaves Ellison looking into the sun and seeing only spots. Only in such a universe would the obvious target painted on Oracle’s back (through the successful settlement of patent litigation with a cash payment) ever be hidden from view.
Even in a world where the risks of subsequent patent troll litigation are outweighed by the perceived benefits of immediate cash (even though Oracle had cash and marketable securities of $31.7 billion as of 8/31/11), surely there must be a better way for BOTH Oracle and Google to generate value for their shareholders without incurring additional risk? Has creativity in corporate America atrophied so far that one of the world’s leading providers of database solutions can’t find a way to collaborate with a company whose stated mission is “to organize the world’s information?”
With that in mind, perhaps Oracle’s view of litigation is to provide a little “kick” to Google’s figurative ass to wake them up to the seemingly obvious appeal of collaboration. Assuming that this is Oracle’s ultimate strategy, the next question is how effective is their “kick” (e.g., strength of their litigation)? M·CAM, through its DOORS™ software platform, is in a unique position to answer this question.
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