-- Eric Auchard is a Reuters columnist. The opinions expressed are his own --

When Oracle agreed to buy Sun Microsystems for $7.4 billion in April, the headlines made much of the software maker's decision to enter the computer business 30 years late. At less than 10 per cent of sales, Sun's software business seemed an afterthought.

But Sun's software is now center stage after European competition regulators said on Thursday that they would withhold approval for the deal until they finish probing the impact of the Oracle-Sun merger on the database software market. The decision means the transaction faces at least a four-month delay, pushing it into early next year.

Any delay is costly for Oracle. Sun's sales have plunged as key financial, government and communications customers have held back purchases of computers and storage until Oracle is able to clarify its long-run commitment to Sun hardware and software products.

The commission is debating whether, or under what conditions, to allow Oracle to acquire Sun's MySQL database software. Given that the business brings in only $100 million in quarterly revenue, less than 1/25th of Sun sales, the easy way out would be for Oracle to jettison MySQL. However, that would be a mistake.

MySQL is a free, or low-cost, database that powers the vast majority of the world's hottest Web sites, blogs and open-source businesses, including Facebook, Google, YouTube and Wikipedia. At issue is the fact that Oracle is already the world's biggest supplier of database software, the underpinning for many of the world's biggest information storehouses.

MySQL is the alternative to Oracle and its main rivals, IBM and Microsoft, which between them generate most of the world's database sales.

There is a valid argument that MySQL is vastly more trouble than it is worth, and that Oracle should sell or give the software code away. This is in part because MySQL customers tend to be fiercely independent grassroots developers, completely unlike Oracle's traditional customers in corporate and government information management.

Critics claim that Oracle has no interest in seeing MySQL survive and that it is only interested in converting its customers into paying Oracle database users.

Nevertheless, MySQL represents an innovation pipeline of inestimable value to Oracle over the next five to 10 years, assuming Oracle can adapt its dressed-down business practices to court Web developers, the most independent-minded wing of the software world.

It would also help Oracle compete more effectively against old rival Microsoft Corp <MSFT.O>, a goal the EU authorities should embrace.

Java, the programming language invented by Sun, forms the basis of most of the world's modern software built outside of Microsoft.

Combined with Sun's software for managing the identities of network users and its Open Office suite of productivity software applications, Oracle could launch a far broader attack on classic Microsoft strongholds in desktop applications and messaging, especially as these markets move onto the Web.

Far from being a stub business, Sun's software arm could hold the key to a vast new round of industry competition.

--At the time of publication Eric Auchard did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund. --

It’s been a while since German business software maker SAP has stated exactly how much of a market share it has.  And no matter how much journalists prod and badger SAP CEO Leo Apotheker he will not divulge that figure. Even when analysts say they believe that SAP’s main rival Oracle has been taking market share from the German company, Apotheker will not be moved to shed some light on the issue.  In several TV interviews on Wednesday, the day SAP presented its second-quarter results, and in a call with analysts, Apotheker not only declined to provide even a range, in fact he could not bring himself to call his company’s fiercest rival by name. “We have about twice as much market share as Number 2,” he said.  In the Harry Potter series the hero is the only one who calls his nemesis by name - Lord Voldemort - instead of ”he who must not be named”.  C’mon Leo, if Harry Potter can do it, so can you.

-- Eric Auchard is a Reuters columnist. The opinions expressed are his own --

By Eric Auchard

LONDON, July 22 (Reuters) - Dell Inc needs to reinvent itself to cope with falling margins for key products and a spate of mergers which are rapidly reshaping the competitive scene.

So the computer maker's moves into business services that help customers slash costs rather than add new programs look promising, given that every company under the sun is chasing this goal.

The other shift in Dell's favour is that corporate buyers look ready to start spending again on technology to generate new business, albeit at lower levels than before.

There is a brutal logic to Dell's reinvention. Personal computers are becoming low-cost commodities, yet still produce 60 percent of the company's revenue.

Dell is showing a willingness to cannibalize its existing hardware business in favour of higher-margin software and services businesses.

More than other large computer vendors, it has embraced "virtualization" technology that lets many big tasks run on the same machine rather than separate ones.

This will cost Dell no small amount of future hardware sales. But it frees it to make money from more profitable services which can lower customers' software and labour costs.

Dell's current reliance on PCs also has an upside as it leaves it best-positioned among major computer makers for a long overdue upgrade of ageing corporate PCs set to start later this year with the introduction of Microsoft's new operating system, Windows 7.

What could be the last great Windows replacement cycle will kick in during 2010 and 2011, buying Dell time to develop businesses beyond the PC.

The company says it is looking at outside acquisitions to fuel its internal growth in business services and software. Yet unlike rivals who have made big acquisition moves in the past year, Dell is steering clear of mega deal-making. Meanwhile, Oracle is buying Sun for $7 billion, while H-P paid $13 billion to acquire EDS.

Instead, Dell says it is looking at small- or medium-sized deals that allow it to attack what's broken in corporate technology. The strategy is to provide managed services from remote locations at far lower to its customers cost than traditional hardware-software systems. It has signed up 5,000 corporate clients so far, mostly in the United States and is only now expanding into other regions of the globe. It manages 2.5 million PCs via such services.

The real magic lies in what Dell doesn't do.

For Dell, consulting should be more like a training session -- brainstorming ideas and then proposing a plan of action. Strategy engagements are counted in days and weeks, not months and years. This threatens the old model of big-budget computer services contracts that were denominated in the hundreds of million of dollars per year and billions over the life of such deals.

Rather than technology differentiation, Dell believes most customers need a lot of the same things -- affordable desktops and notebooks, and mounds of raw computer capacity and data storage. Above all, customers want technology that just works.

Dell reckons it can eliminate the need for complex and expensive systems and network management software by providing it online and only when required whereas rival vendors typically use such software to lock customers into buying other products and services.

This strategy is not without risks. But by shifting its business model to one that drives down fixed corporate spending, Dell has timed its revamp to fit the new realities in which we work.

-- At the time of publication Eric Auchard did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund. You can read some of Eric's recent columns here. --

(Editing by David Evans; Photos: Reuters/B Mathur, New Delhi, and Brendan McDermid, New York)

Silicon Valley billionaire Larry Ellison shed a little sunshine on “cloud computing” on Thursday at a financial analyst meeting held by Oracle Corp, the software company that he founded and runs (when he’s not making into the headlines for his more nautical pursuits).

We’ve redefined ‘cloud computing’ to include everything we currently do. So it has already achieved dominance in the industry. I can’t think of anything that isn’t cloud computing.

The computer industry is the only industry that is more fashion-driven than women’s fashion. Cloud Computing. I remember I was reading W and I read that orange is the new pink. And cloud is the new SaaS. (Software as a Service) Or cloud is the new virtualization. It is the most nonsensical. I mean I read these articles … I have no idea what anybody is talking about. I mean it is really just complete gibberish.

What is it? What is it? … Is it - ‘Oh, I am going to access data on a server on the Internet.’ That is cloud computing?

Then there is a definition: What is cloud computing? It is using a computer that is out there. That is one of the definitions:  ‘That is out there.’ These people who are writing this crap are out there. They are insane. I mean it is the stupidest.

And he wasn’t done yet: “When is this idiocy going to stop?” And “What the hell is cloud computing?” followed. And then this:

We’ll make cloud computing announcements because if orange is the new pink, we’ll make orange… Okay fine, we’ll do some cloud. Maybe we’ll do an ad. I don’t know what we’ll do differently in light of cloud computing other than change the wording on some of our ads. It’s crazy. So that’s my view.

Still lost in the clouds?