Sun acquires MySQL II

A quick follow up to a previous post. The buzz created by the Sun acquisition announcement is still going strong. I’m still digesting the news and doing additional reading, but here are some interesting items I’ve run across.

Other Open Source database participants have been quite positive about the news. Josh Berkus, a member of the PostgreSQL Core Team and a Sun employee, was quick to welcome Brian Aker and the MySQL team aboard. You can see comments from Andy Astor, of EnterpriseDB here. This is friendlier stuff then you typically see in the proprietary world. I think that’s a function of both Open Source being different and us still being quite early on the adoption curve (where a rising tide is seen as lifting all boats).

From Matt: Guess how long the entire process, beginning to end, took? Five weeks. From the first phone call to today’s announcement, the deal took five weeks. That time frame is absolutely astounding. With a company the size of Sun, getting a simple partnership deal done usually takes more than five weeks. To have an acquisition of this size pulled off (Sun spent about 36% of its cash on the deal) is a testament to how bad they wanted a deal done.

Here’s a quick comparison to the BEA deal by Savio:
First off, kudos to Sun for valuing MySQL at this price. The deal represents ~36% of Sun’s Cash & Cash Equivalents (of $2.7B) on hand at the end of their last quarter (Sept. 2007). But considering how cheap debt is these days, Sun could probably fund a portion of the deal through cheap debt.

A reader commented on BEA and MySQL being founded in the same year, but BEA being sold for 8x more than MySQL. True, but BEA has ~$1.5B in revenue versus ~$60M for MySQL. When you take revenue into account, MySQL secured 3x more in acquisition price for every dollar of revenue than did BEA. OSS vendors must be sleeping with dollar signs in their eyes tonight….

Here’s a Q&A with Stephen O’Grady:
Q: So does that make this “We’re the Dot in the Dot Com,” the sequel? With the commensurate crash to follow?
A: Some would contend that’s the case, yes. Particularly a couple of members of the media we’ve spoken with. And of course it is possible that the model propping up Google’s immense valuation and those similar to it will prove to be similarly illusory. But somehow I doubt it. The fact is that the Google’s of the world have made real what Sun itself could not: a network that is, in fact, the computer. And the Google’s of the world, far more often than not, run on MySQL. Via this single acquisition, Sun’s made itself a relevant vendor in a space that very few, if any, of the larger commercial systems suppliers can play in.

Whether you agree with the valuation or not, YouTube sold for $1.6 billion, and consumed virtually no software from any of the major vendors. If that acquisition was to take place today, they would have been buying from Sun.

Not everyone is seeing this as a positive. Jay worries about the large company syndrome and Ben wishes Sun would focus on their core. Sun’s poor history with acquisitions seems to come up a lot, but none of those were under Schwartz.

Some additional comments:

* The MySQL founders are happy with the deal. That’s a good thing.
* Who this impacts and who else could have pulled off an acquisition seem to be popular questions. I’d say the latter is a fairly small list: Oracle, Red Hat, IBM and maybe Google or Yahoo. Who it impacts remains to be seen, but I think the implications will be pretty far reaching.
* The possibly Google/Yahoo above brings me to an angle that I haven’t seen much commentary on. I’d expect Sun to offer some kind of “MySQL in the cloud” service that could be one component in a service offering that competes with Amazon an its S3/EC2/SimpleDB offerings.
* It’s clear that Sun has made a significant investment in the M from LAMP here. I continue to question how they feel about the L in LAMP though. This seems to be one of the biggest sticking points people have. Will MySQL focus less on Linux (which leads both MySQL sales and downloads by far, from what I understand) and more on Solaris? Will Sun push Solaris while selling MySQL? More questions than answers on this one, so we’ll have to wait and see.
* I’d expect a couple long time MySQL employees to cash out after this and quickly found some very interesting startups based on what they did at MySQL AB.

That’s all for now.

–jeremy