Sun acquires MySQL; Adds to its software stack

Sun acquires MySQL; Adds to its software stack

Summary: Updated: Sun Microsystems is taking the plunge into the database market with the purchase of open source database developer MySQL for $1 billion ($800 million in cash in exchange for all MySQL stock and assumption of approximately $200 million in options).With the move, announced Wednesday, Sun takes a big leap into the $15 billion database market and pits it against the likes of Microsoft, IBM and Oracle.

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Updated: Sun Microsystems is taking the plunge into the database market with the purchase of open source database developer MySQL for $1 billion ($800 million in cash in exchange for all MySQL stock and assumption of approximately $200 million in options).

With the move, announced Wednesday, Sun takes a big leap into the $15 billion database market and pits it against the likes of Microsoft, IBM and Oracle. MySQL (all resources) also gives Sun entry to some customers that may be interested in buying more equipment and software. MySQL counts Facebook, Google, Nokia and Baidu as customers.

During a conference call this morning Sun and MySQL executives sang kumbaya. On the call, Sun CEO Jonathan Schwartz called the MySQL deal the "most important acquisition in history of company" and added that the database firm will have "a central role" as Sun rolls out its open source strategy. Sun is in the process rolling up a complete open source stack, becoming the largest open source organization of world.

Here's what makes MySQL interesting to Sun. About 20 percent of MySQL deployments run on Solaris, according to Sun estimates outlined on a conference call. Seventy five percent of MySQL deployments are not on Sun hardware. That gives Sun an opportunity to bundle hardware software and services. Although Schwartz noted that the software and hardware business operate separately MySQL could give Sun some leverage as customers look to consolidate vendors.

Sun (all resources) can also distribute MySQL through its channel and OEM partnerships and create various bundles. The overarching goal is to give MySQL more "commercial appeal" and boost adoption of open source software in the enterprise.

In a statement, Schwartz said the MySQL purchase puts his company at "the center of the global Web economy" since the open source database provider is entrenched at Web giants. MySQL is included in that platform that includes Linux, Apache and PHP/Perl commonly known as LAMP.

Schwartz followed up on his blog:

We're putting a billion dollars behind the M in LAMP. If you're an industry insider, you'll know what that means - we're acquiring MySQL AB, the company behind MySQL, the world's most popular open source database.

You'll recall I wrote about a customer event a few weeks ago, at which some of the world's most important web companies talked to us about their technology challenges. Simultaneously, we gathered together some of the largest IT shops and their CIO's, and spent the same two days (in adjoining rooms) listening to their views and directions.

Both sets of customers confirmed what we've known for years - that MySQL is by far the most popular platform on which modern developers are creating network services.

One big question is what Sun does next to build out its stack of open source software and other applications covering middleware, storage and virtualization. Sun's software lineup now includes Java, MySQL, OpenSolaris and GlassFish.

The company can now pair MySQL with Solaris and could fill out its roster with other targeted acquisitions. A large scale merger with a company like Red Hat is probably a non-starter though given Sun's infatuation with Solaris.

Sun plans to integrate MySQL into its software, sales and service groups and MySQL CEO Marten Mickos will stay after the acquisition.

Mickos on the conference call added that the deal makes "wonderful sense" because the combined company can offer a diversified software stack to multiple platforms.

In a statement Mickos said, "Sun's culture and business model complements MySQL's own by sharing the same ideals that we have had since our foundation -- software freedom, online innovation and community and partner participation."

mickos1.jpg Marten Mickos, MySQL CEO, joins the Sun open source soul train and managed a healthy exit for his company's founders and investors, which includes Benchmark Capital, Institutional Venture Partners, Index Ventures, Holtron Ventures, Intel Capital, Presidio STX, Red Hat, Scope Capital and various angels.

Other questions about the deal remain. Among them:

How will the MySQL community handle being part of Sun? Sun is a member of the open source community, but has been controversial and viewed as late to the game on taking Java to the masses. Sun has contributed a lot, but folks don't like change. Sun plans to optimize and bundle MySQL with its software and hardware, but if this is viewed as a sales pitch there will be issues. One talkbacker in this post is already skeptical. I'm curious to see the community reaction here.

Schwartz wrote:

MySQL is already the performance leader on a variety of benchmarks - we'll make performance leadership the default for every application we can find (and on every vendor's hardware platforms, not just Sun's - and on Linux, Solaris, Windows, all). For the technically oriented, Falcon will absolutely sing on Niagara... talk about a match made in heaven.

Can Sun bridge the enterprise-startup divide with MySQL? Schwartz on his blog noted the following:

CTO's at startups and web companies disallow the usage of products that aren't free and open source. They need and want access to source code to enable optimization and rapid problem resolution (although they're happy to pay for support if they see value). Alternatively, more traditional CIO's disallow the usage of products that aren't backed by commercial support relationships - they're more comfortable relying on vendors like Sun to manage global, mission critical infrastructure.

That's an excellent point and presents a conundrum. If Sun makes MySQL more enterprise acceptable does that diminish its mojo with startups? Does it matter?

Mickos said the enterprise-startup bridge is a "big opportunity" and Sun can capitalize on because the MySQL roadmap will be sped up as the two companies focus on scale, performance and integration. "We stand out from most databases," explained Mickos. "MySQL was developed for online world. Our relevance grows in the enterprise as they shift to Web-based architectures."

Separately, Sun said it expects to report fiscal second quarter revenue of $3.6 billion and earnings of 28 cents to 32 cents a share. Wall Street is expecting earnings of 29 cents a share on sales of $3.58 billion.

Dan Farber contributed to this post.

Topics: Software, Data Centers, Data Management, Enterprise Software, Open Source, Oracle

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51 comments
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  • So long, MySQL, you go to a slow lingering death...

    This is *NOT* good news for MySQL fans.
    wolf_z
    • how so?

      How does this spell "death" for them?
      CobraA1
      • Sun kills by incompetence

        Speaking as someone who worked for a company that was bought out by Sun, you can pretty much kiss MySql good bye. Sun management is filled with incompentent morons. The only reason they are still around was the huge pile of cash they built up during the dot com. Their software has always sucked and they will do their magic with MySql. This buyout is just another step in McNealy's endless jihad against Microsoft. I'm surprised its taken them this long to destroy a database company.
        jackbond
    • Happy RoR developer

      Under Ruby on Rails, I changed the database.yml to use Postgres instead of MySQL. Job done in under a minute. SQLite works too.
      fr0thy
      • You are right. MySQL has thrived because businesses are willing to pay for

        top notch support. But, there are also a lot of smart people like yourself that can install and support databases all by themselves, and will switch to PostgreSQL if necessary to avoid license fees for proprietary code. Of course they just might switch because PostgreSQL is better. PostgreSQL is the real thing,
        DonnieBoy
        • Who will by PostgreSQL now?

          Youu think any of the major organizations are not seriously looking at PostgreSQL now? I would be. It is by far the best of the remaining open source Databases on the market.
          anthony.mcclay@...
          • It would be interesting to see

            somebody buy into PostgreSQL, and compare how they got on compared to the [new/enforced] community fork.

            Personally I prefer the pureness off people creating because they want to rather than they have to because it pays their rent.

            It will be interesting to see how it all pans out. I've long held the belief that Microsoft is "the edge of Capitalism".

            I'm not religious at all, bit I pray that computing leads us to a whole future that's "Open Source like". In that I mean knowledge isn't hidden, everybody's able to contribute, everybody's able to learn and further themselves. The question would become, "how do we arrange our rent and our energy supplies".

            Hmmmm........
            fr0thy
  • If Sun does it right, they CAN satisfy both camps. And, it IS GPL, so it

    CAN be forked and Sun knows that. Look for Sun to play nice.
    DonnieBoy
    • It certainly can be forked....

      however the company MySQL will no longer be there to support it, so it will have loss of continuity that it might not recover from.
      mrOSX
      • It will never fork as long as Sun plays nice, as there would be no reason.

        But, as soon as Sun started trying to favor their own hardware, and disadvantage others, there would be a fork, and support organizations sprouting up all over. That simple.

        And, you CAN link proprietary code if you recode the client side libraries and license them as LGPL. As I recall, there are already alternate client side libraries, but of course everybody prefers the MySQL libraries because they are more than willing to pay for top notch support when using with proprietary software.
        DonnieBoy
  • RE: Sun to acquire MySQL

    Scary "optimized for Sun Software and Hardware"

    Does that mean LAMP will become SIMJ (Solaris iPlanet MySQL Java) ewww
    j_leoni@...
  • RE: Sun to acquire MySQL

    Great. MySQL deserves the attention.
    rc@...
  • My Only Concern

    Sun, very agressively, seeks to protect its itellectual property (e.g. Sun vs. Microsoft) but seemms to have no trouble in borrowing it (e.g. NetApp vs. Sun). I suspect there will be a lawsuit or two regarding MySQL, at least until Sun finishes spraying a few trees to mark its territory.

    I applaud Sun's support of open source but at the same time I have a little trepidation as to when Sun will finally let the other shoe drop and starts demanding some compensation for all of that support.
    NthDegree
  • A billion for what exactlly?

    Not quite certain what the billion in cash bought them other than the right to use MySQL just like everyone else does for free.
    No_Ax_to_Grind
    • You didn't get the e-mail?

      MySQL charges a rather handsome fee for MySQL training classes, and they already have support structure with clients on existing support contracts (#3,000 per server annually, or $40,000 for unlimited support on as many servers as you have).

      They made 50 million in 2006 (from 6 million in 2002), their net is over 500 million, so 1 Billion isn't that bad of a price.

      Lest ye forget, that Oracle tried to buy MySQL last year.
      startx.jeff
      • But...

        Did they need to spend a billion dollars to offer support?
        No_Ax_to_Grind
        • If...

          If ... They see a market advantage in offering MySQL Db bundled with Solaris or Java.... heck ya. Eclipse from IBM already has the JAVA IDE locked. If Sun can get back market penetration in other segments (leverage) by using MySQL - why not?.

          They might have paid a bit more than it's current market face value, but MySQL might be more valuable for SUN in the long run. As I understand it, they intend to use it to expand their other lines of business. Any premium will drive the other segments forward with increased sales.

          Imagine the possibility of running open source Java on Debian, hooked to a MySQL server, serving dynamic HTML pages generated from XSLT. Awesome goodness. And Sun has a unified contract to install, support, and sell Sun certified hardware! They are gunning to sell to big fish.

          Big picture... training + support + future business opportunities.

          They are not buying MySQL to lose money. =)
          startx.jeff
          • Maybe

            "They are not buying MySQL to lose money. =)"

            That remains to be seen, their buys of late have not worked out quite like they have hoped.
            No_Ax_to_Grind
    • History repeating itself

      They dropped 500 million for HighGround, a company that was probably 6 months from bankruptcy and virtually no revenue. Nothing new for McFilth.
      jackbond
    • They now control the trademark and the code tree

      And I didn't read all the details, but this probably means that their staff developers get folded into Sun's organization. Keep in mind that MySQL's official code tree is maintained internally. They generally do not accept outside code.

      Yes, they could fork the code and control that fork, but they wouldn't have the developers who created the code and made it their livelihood, and they wouldn't control the trademark, which does mean something in the server community.
      Michael Kelly