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January 16, 2008 | Comments: (0)
More thoughts on Sun and MySQL
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....
Alex Fletcher has a few thoughts on the deal. I found this one most interesting:
"MySQL should help to stimulate the relevance of Sun's tooling and Enterprise Application Infrastructure. Look no further than Oracle for an example of leveraging market share in the database market to cross-sell middleware."
Ahh, if only that were true Alex ;-) Oracle has had a really strong position in the DB market for decades, but next to no position in middleware market outside of DBs, (since DBs are a part of the middleware market). This all changed when Oracle got serious about applications. Also, let's not forget that customers only buy into cross-sell situations if the product being cross-sold is something the customer would have considered. So, I don't think you can compare Oracle's strategy/results with Sun's prospects.
Prediction of why Sun bought MySQL: Look up in the sky, it's a bird, it's a plane, no, it's a MySQL db on a Sun cloud. (This idea comes from Cote).
The fact that Amazon has been so successful with EC2/S3 should be keeping Sun (and IBM) execs up at night. The Cloud computing opportunity is Sun and IBM's to lose. By acquiring MySQL, Sun gets access to arguably the database of choice for cloud deployments. I'll be watching with interest to see if Sun invests in MySQL capabilities that are optimized for cloud/virtualized environments.
Thoughts?
Posted by Savio Rodrigues on January 16, 2008 08:35 PM
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"Considering how cheap debt is these days"!!
Heard of the credit crunch Savio?
Posted by: Astonished at January 17, 2008 12:54 AMKudos for Sun spending a third of their cash to buy a product which makes, essentially, a rounding error of bottom line revenue?
Kudos for buying a product their sales force can't sell?
Kudos for going up against Microsoft AND Oracle and IBM in the database market? (Not in that order!)
Good lord, with a possible tech crash coming up AND how much fun Sun had in the last one (Reminder: none at all.) I'd have thought they'd have been looking for places to put CFC's and not wasting money on a software acquisition.
-OT
Posted by: Oliver Taco at January 17, 2008 02:30 AMI don't really see MySQL going up against Microsoft, IBM or Oracle. Have you ever heard of a data warehouse storing TB of data in MySQL? How about BI, ever heard of anyone really using MySQL for BI data or analysis? I haven't.
I see the MySQL grab as a way to be more relevant to the web-based world. If they can have more control over MySQL then they can try to put in more hooks to Java and make the the world want to deploy LAMJ servers instead of LAMP servers. With Sun betting more and more on Java these days I think everything they'd be doing would want to involve Java.
Just my opinion, I'm allowed to be wrong.
Posted by: Orrin at January 17, 2008 05:27 AMOrrin, you should check out Pentaho which is the leading open-source BI solution running with MySQL.
Posted by: tanj at January 17, 2008 05:44 AMAstonished, what are we talking about, 5%-7% interest rates on debt for Sun? Seems pretty cheap...and likely to get even cheaper as the Fed cuts rates.
Posted by: Savio Rodrigues at January 17, 2008 06:24 AMtanj: I would expect an open-source BI solution to use MySQL, but I wonder what the market share of Pentaho is compared to.. say Business Objects (or other commercial BI tool)?
As far as going after LAMP, I just noticed today that Ryan Paul over at Ars agrees with me.
http://arstechnica.com/news.ars/post/20080116-sun-targets-open-source-lamp-stack-with-mysql-acquisition.html
Posted by: Orrin at January 17, 2008 10:36 AM
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