NEW YORK ( TheStreet) -- One of the great stock market myths of our time is that Oracle (ORCL - Get Report) made a great deal when it bought Sun Microsystems in early 2010.
Since then the value of Oracle has risen about 45%, sales are up by 63%, and profits are up 56%, on an annual basis. The market is offering a premium multiple of 16.44 for those earnings, against less than 12 for
The belief is that since Oracle sells database software and high-end hardware to scaled enterprises, its earnings are more certain going forward than those of a mere consumer device maker, and Sun is a big reason for this.
But is it? Oracle's hardware sales are trending down,
as noted in reporting on its most recent fiscal quarter by
Oracle was not a hardware company before buying Sun.
Oracle's response is it also acquired key software assets with Sun. These included some of the "crown jewels" of the open source movement -- the mySQL database, the OpenOffice office suite, the OpenSolaris operating system, and Java, the write-once, run-anywhere computer language.
How is that working out? Not so well.
Monty Widenius, the outspoken mySQL co-founder, told
in November that
Oracle is breaking its promises
and, in the process, sabotaging his own open source fork of the code, called
OpenOffice has been given over to the
Apache Software Foundation
after European developers became so angry with Oracle's management they created their own fork of the code, called LibreOffice.
I linked to
former Sun evangelist Simon Phipps' story about efforts to fork OpenSolaris.
But this is nothing next to what has happened with Java.
Last week the U.S. Computer Emergency Response Team, or US-CERT,
issued this release
telling users to disable Java 7 in their browsers due to a security threat they could not find a way to fix. Criminals are already using the flaw to infect computers,
Even the U.S. Department of Homeland Security is issuing warnings.