Sanford C. Bernstein estimates MySQL’s financial position at breakeven on only $60 million-$80 million in trailing 12-month revenues although over 100 million copies of the database have been downloaded.
Sun is paying $800 million cash for MySQL’s stock and assuming about $200 million in options. But Sun has been known to overpay for acquisitions before. Remember its fatal $2 billion Cobalt Networks deal? It’s also been known to buy the wrong thing for a premium like, say, oh, StorageTek.
Sun, which is given to highfalutin rhetoric and hyperbole, sees its acquisition of MySQL as reaffirming its position “at the center of the web economy” and its role as “the largest commercial open source contributor.”
CEO Jonathan Schwartz said the deal is “all about growth,” both MySQL’s and Sun’s, and “better value to shareholders.”
Well, then, one imagines Sun’s shareholders wondering, for starters, how Sun is going to recoup the billion dollars.
Schwartz says he expects to drive MySQL, which is currently used by such as Internet biggies as Google, Facebook and Baidu, into more traditional applications and enterprises and “change the landscape of the software industry.”
That means driving it into large mission-critical applications, where, as Sun says, the database has found little adoption – largely because it wasn’t designed for them.
However, according to Richard Green, the head of Sun’s software operation, since MySQL version 5 a couple of years ago, the database has had a “pluggable” character capable of adding different kinds of functionality – like, say, relational widgetry – that appeals to different customer sets.
And Sun, of course, expects to push its performance, scaling and integration roadmap.
Well, that’s nice and all, but Andy Astor, who runs EnterpriseDB – which with MySQL now gone to Sun, makes him the head of the largest independent open source database company on the planet – thinks that MySQL talked up an IPO merely to attract an acquisition bid and that it was never serious about going public because its “business model couldn’t stand up under it.”
He also thinks that given MySQL’s ubiquity Sun hasn’t a prayer of getting its money back selling the database.
Jonathan can talk all he likes, Andy says, about taking MySQL into the Fortune 5000 but there he’s up against competition from Oracle and IBM DB2 – and to a certain extent Microsoft and its SQL Server – which have been harden enterprise databases for the last 20 years, with features that a “quick and dirty database” like MySQL has only added in the last 18 months.
Heck, even open source PostgresSQL, on which EnterpriseDB is based, he says, has had those features for the last decade and EnterpriseDB can at least go head-to-0head with Oracle.
Schwartz says he figures to do it in part by having MySQL piggyback on Sun’s distribution channels and OEM relationships with Intel, IBM and Dell.
Ah, but as Andy reminds us, Intel, like SAP, is an investor in MySQL and what is a closer relationship than money. Surely Intel would have put its back to the wheel already. IBM of course has its DB2 interests to protect and Dell, well, Dell, is already cashing in on MySQL.
See, most MySQL deployments are on Linux. Solaris only comes in behind Windows at 20% and 75% of those Solaris deployments aren’t on Sun hardware. Nope. They’re on Dell, HP and other people’s gear.
Sun hopes to change that equation and move more Sun servers, storage and software on the back of MySQL – particularly since, it says, “Sun customers are deploying MySQL at a phenomenal rate” – so then why should Dell help - but then Sun also talks about continuing to support and invest in PostgresSQL and Oracle as well as JavaDB. “We can support them all,” Schwartz said.
Meanwhile, LAMP stack aficionados now have to worry about where MySQL optimization will go.
Sun is already talking about MySQL, OpenSolaris and Java – along with its Glassfish app server and NetBeans IDE – being a “powerful web application platform across a wide range of customers shifting their applications to the web.”
Try to imagine Red Hat, which has made its fortune replacing Sun, writing checks to Sun for MySQL.
Sun describes its integration of MySQL as extending the database’s commercial appeal and improving its value proposition with the addition of Sun services.
Interesting enough, there have been reports of MySQL users bypassing MySQL support for cheaper, consolidated third-party support from outfits like OpenLogic. Sun support is doubtless more expensive still.
MySQL CEO Marten Mickos, who’s going to stick around – at least for a while – and report to Green, said the acquisition makes “wonderful sense,” ticking off its attributes as “better service, a full stack and new customers.”
Green, by the way, thinks that the Sun-MySQL tie-up has more synergy than other Sun acquisitions.
The acquisition is expected to close sometime between now and early in the second calendar quarter.