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Oracle and the Responsibility for Code

Stocks in this article: ORCL AAPL GOOG

The current version of Java, called Java 7, was first released in the summer of 2011, long after the Sun acquisition closed. This happened on Oracle's watch. The company has released a "fix" for the problem, but security pros are telling reporters including Charlie Osborne of ZDNet this does not go far enough , that it's best to assume Java is insecure and stop using it.

This crisis has been building for months. Slate had an article about disabling Java back in August.

Among all the open source tools Oracle acquired from Sun, Java was the crown jewel. It is estimated that 850 million computers use it. It had been considered an essential part of the Internet. Google (GOOG) Executive Chairman Eric Schmidt made his reputation on Java, and the Android operating system is written in Java. Oracle tried, unsuccessfully, to extract millions of dollars from Google for its use of Java.

Oracle never understood the nature of open source. You're responsible to a community with open source, but you don't really have ownership of the code base. Oracle has, throughout the last three years, fought to extract money for its open source "assets," while giving back as little as possible. It's paying an escalating price for this mismanagement.

No, Oracle's bottom line remains good because Oracle remains expert at extracting the maximum it can from big companies that are dependent on its old client-server solutions. It's now trying to convince those same customers that the "only" way to cloud is to keep paying it monopoly rents, both for converting to cloud technology and for managing the results.

That may continue to work. But does it make Oracle worth a premium price? Personally I would call the risk it can't maintain momentum to be at least as great as the risk that Apple will come upon hard times.

At the time of publication the author had a position in AAPL.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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