Sun Microsystems' decision to buy MySQL, the company behind a popular and growing open-source database, for US$1 billion (NZ$1.32 billion) could allow Sun to to expand MySQL's reach — and give database giant Oracle something new to worry about. But more immediately, Sun's buying plans address a problem facing the privately held MySQL — namely, its future.
MySQL, based in Uppsala, Sweden, and Cupertino, California, is being adopted by a growing list of businesses in every industry and was primed to be acquired or go public. Now, if all goes as planned, it will become part of Sun's open-source software portfolio, which includes the Solaris operating system and Java. The sale is expected to be completed later this year.
Jonathan Schwartz, CEO and president of Sun, called the purchase "the most important acquisition Sun has made in the history of the company" during a teleconference earlier this month.He went on to argue that MySQL needs Sun to expand.
The big impediment to MySQL's growth was its inability "to give peace of mind to a global company that wants to put MySQL into mission-critical deployments," said Schwartz.
Sun is making a bet that demand for MySQL will continue to grow, especially in emerging companies and countries, which could challenge Oracle's dominance of the $15 billion database market. Emerging market growth is especially important to major vendors, including IBM, which recently credited overseas markets for its earnings growth.
In buying MySQL, Schwartz said Sun is acquiring a company with a wide-ranging customer list that includes some of the darlings of the Web 2.0 era, including Facebook and YouTube, as well as older businesses such as Toyota and Southwest Airlines.
MySQL CEO Marten Mickos, who will become part of Sun's senior leadership, said "there is a good cultural fit, a good strategic alignment, but there is also wonderful industry logic that we see underlying this whole transaction."
MySQL has been gaining ground in mission-critical usage, and with the acquisition, "we will be able to offer those customers even better service," as well as a "full stack" of software, Mickos said. He was referring to a set of software that companies typically need, including security, identity, management and development tools — all of which are now part of Sun's portfolio.
The acquisition shouldn't raise concerns for users, says Crawford del Prete, an analyst at IDC. "I think, if anything, it means that you've got a very large systems company that is continuing to invest in the platform and ensure a long-term road map," del Prete says.
Peter Brown, executive director of the Free Software Foundation, says there had been concern that a purchase of or public offering by MySQL might lead the software into a proprietary direction. But Sun's move quells that, he says.
"Sun has shown to have very good credentials from the free software perspective," says Brown.