foobar on computers, software and the rest of the world


Sun to acquire MySQL ... for $1 billion

, posted: 17-Jan-2008 06:29

By far the biggest piece of tech news today (or even of 2008, so far) is the announcement that Sun is going to acquire MySQL for US$ 1 billion ($800 million in cash, $200 million in stock options).

Wow!

There are a couple of remarkable points about this:
  1. MySQL is the world's most popular open-source data base (and one of the most popular databases in general). It's the 'M' in the LAMP stack, on which so many web-sites are build these days.
  2. MySQL can avoid the very costly and strenuous process of doing an IPO.
  3. MySQL can gain access to more higher-end accounts. One of MySQL's main revenue streams comes from professional support. But still, some CTOs want to rely on a Fortune 500 company for tech-support of critical infrastructure components. That used to be Microsoft, IBM and Oracle ... or Sun. Well, with Sun owning MySQL now, these conservative thinking CTOs get what they want with MySQL. Thus, we should see the adoption of MySQL in ciritical high-end accounts grow.
  4. Sun can regain some of its standing in the web/Internet world, which it once used to have, but had largely lost after the dot-com bust.
  5. MySQL as one of the world's premier open-source projects is another feather in Sun's open-source cap.
Considering the last point, this acquisition really makes sense. Sun, under its CEO Jonathan Schwartz, has been actively pursuing open-source as a strategy, culminating in the open-sourcing of Java, and also OpenSolaris (plus a number of other projects). MySQL fits in very well, and gives Sun not only access to MySQL's current revenue streams (support, dual licensing), but also a new potential user base for the sale of additional Sun products in the future. Since MySQL customers are obviously willing to use open-source products, many of them might be inclined to use OpenSolaris as well, which is just what Sun would like. And I'm sure it won't be long before MySQL will perform really, really well on OpenSolaris.

There is another, very important point in this: To some people it is still surprising that it is possible to make money with open-source. Some are wondering if open-source software can be professional or enterprise ready, or if it is possible to get support for open-source products. I think an acquisition like this answers those questions comprehensively. Consider that MySQL already had $80 to $100 million in sales (much of that from support) last year, with revenue continuously growing. It is the epitome of a highly professional open-source company, a showcase of the commercially potential of open-source.

So, considering these revenue streams, the professional cloud and huge user base of MySQL, a $1 billion evaluation is not outlandish by any stretch of the imagination and a clear indicator of open-source's viability, if we ever needed one.


Other related posts:
UK government supports open source
25 open source projects for software development
Dabbling in OpenSolaris






foobar's profile

 
New Zealand


  • Who I am: Software developer and consultant.
  • What I do: System level programming, Linux/Unix. C, C++, Java, Python, and a long time ago even Assembler.
  • What I like: I'm a big fan of free and open source software. I'm Windows-free, running Ubuntu on my laptop. To a somewhat lesser degree, I also follow the SaaS industry.
  • Where I have been: Here and there, all over the place.




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