January 21, 2008 Leave a comment
Another quick follow up, hopefully my last on the topic (at least for a while). Things are finally starting to quiet down a bit on the MySQL Sun acquisition front, but I wanted to post a few recent links I’ve run into.
Jonathan posted a little about how the deal went down, how in will impact partners/employees and some other tidbits from an internal Sun perspective.
Are there revenue synergies in the deal?
Everywhere we look.
Where are the revenue synergies?
The more interesting question is “where aren’t the synergies?” Wherever MySQL is deployed, whether the user is paying for software support or not, a server will be purchased, along with a storage device, networking infrastructure – and over time, support services on high value open platforms. Last I checked, we have products in almost all those categories.
In addition, the single biggest impediment to MySQL’s growth wasn’t the feature set of their technology – which is perfectly married to planetary scale in the on-line/web world. The biggest impediment was that some traditional enterprises wanted a Fortune 500 vendor (“someone in a Gartner magic quadrant”) to provide enterprise support. Good news, we can augment MySQL’s great service team with an extraordinary set of service professionals across the planet – and provide global mission critical support to the biggest businesses on earth.
Where will you take MySQL next?
That’s a question you’ll need to vector to MySQL – both before the acquisition (given that we’re still separate companies), as well as after. We’re not acquiring them to tell them what to do – we acquiring them to listen. To their leaders, their community, and their customers.
And having listened to about 10 customers face to face over the past couple days, I’ve heard only one comment, made consistently – “Congratulations, this is absolutely fantastic news for all of us!”
I totally agree.
marcf is still left scratching his head a bit.
So I will repeat the party line as if I had understood it.
MySQL is everywhere (true). They had flat revenues because they couldn’t monetize their installed base due to lack of services (probably true). SUN will be able to monetize this by bringing to bear a huge structure that gets it and will sell, sell, sell (maybe if they don’t mess up the integration and SUN has a really bad track record here but whatever). The most insightful thing I have heard from a good friend is “the margins on MySQL will be higher than anything they have seen in hardware”.
So I turn to other aspects of analysis. Vanity provides some avenue of progress. PTB’s quote that this is “the most significant acquisition for SUN” points to a CEO wanting to make his mark on the company he heads. It is vanity, but in this particular case, vanity served by intelligence so it is worthy of praise as it shows COJONES.
The most signal I get is in marketing. For anyone that doubted that SUN wanted to be a software company, this is it. I mean how more serious a signal do you need. SUNW makes 13B in hardware and is saying loud and clear: software is our future.
Because, unlike IBM and ORACLE they have NO SW business to speak off, they can embrace OSS fully. Fair enough. All I have to say to them is God Speed to them.
Stephe posts about business models and how Sun is evolving its message.
Christensen is the first to point out in his presentations that what he originally called “disruptive technology” in The Innovator’s Dilemma was later observed to be a “disruptive business model” by Andy Grove during a presentation at Intel. (The book had already gone to print, and so we now have loads of technology companies running around thinking their technology is more important than their business models.)
Christensen models demonstrate that a disruptive business model generally begins with an inexpensive “inferior” technology offered at a lower price in a different margin business model that enables customers either to do something they’ve never been able to do or to avoid the expensive control point. The “inferior” technology matures as the business grows and eventually the business grows into mature markets (i.e. the business model is disruptive). Think Linux from undergraduate project in 1991 to the IBM and Red Hat/MSDW Wall Street keynotes at LinuxWorld in 2002. So too with MySQL.
IBM evolved to be a company that offered their customers all the technology choice AND the expertise to knit it together into a coherent unique customized solution. It doesn’t matter how imperfectly true that statement may or may not be — but rather what customers perceive it to be. That doesn’t mean IBM isn’t happy to push an IBM-centric technology agenda, but it’s the customer relationship that’s important (since they’re the people with the money and the choice) and IBM focuses on ensuring they have the breadth of product offering to best map their customers’ self-selected heterogeneous needs. They are no longer the “Selectric” company and have even evolved with the networked IT world to be more than the “mainframe” company. IBM continues to build their message around open systems, standards, and open source, which suits their customer’s heterogeneous decisions. IBM is the “data center” company.
Sun is also evolving its message and its offerings to suit their customers heterogeneous web-based applications needs. They’re building relationships with IBM, Microsoft, the Linux community, and now they’re acquiring MySQL. Sun is in a position to deliver a heterogeneous technology base to their customers’ heterogeneous needs and to shape a marketing message that began as technology slogans around “the network is the computer” and “the dot in Dot Com” into a customer centric idea like the “Web” company. That doesn’t mean they won’t meet severe competition from IBM for which idea word is more important in customers’ minds, but they’re still in the game after being counted out too many times in the past.
It seems pretty clear to me that people are seeing this acquisition from a ton of different angles. Opinions vary quite a bit on this one, and a lot of it is going to come down to execution and integration. Overall I think it really could be a great pickup for Sun and a real win for Open Source. As you can probably tell, I’ll be keeping a close eye on this one.