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The enterprise IT world is abuzz with the news of Sun Microsystems’ buyout of MySQL. The deal was worth $1 billion to Sun, which will pay $800 million in cash and $200 million in stock for the Swedish open source database company. Industry analysts expressed a mixture of excitement, disbelief, and anxiety following the announcement , but there was one thing upon which all agreed: MySQL is easily worth what Sun will pay, and if they play their cards right, they’ll get far more than $1 billion out of this manoeuvre.

The database market is currently valued at $15 billion, and Sun’s acquisition will enable MySQL’s product line to flourish within the development world. MySQL is a key player in the web application platform LAMP, which consists of Linux, Apache, MySQL database, and PHP /Perl programming languages. The database service they provide is key for developers who create internet-based applications, and sites which use MySQL run the gamut from e-commerce to social networking. Indeed, customers include heavy weights across diverse industries, including Google, Pricegrabber, Craigslist, Linden Lab, NASA, UNICEF, Associated Press, Slashdot, Nokia, and Adobe. Since their database software is open source (meaning developers can modify the source code) and free, MySQL’s revenue comes from subscription support packages.

Sun can offer MySQL a more entrenched place in the enterprise IT world, where their open source database software can be used for everything from inventory tracking to customer relationship management applications. This will put them in direct competition with other database management systems from companies like Oracle and IBM. Oracle was also rumored to be eyeing MySQL, which would have been a more direct threat to their open source foundation. Sun is said to be preserving the revenue model, and they have traditionally support open source projects such as Open Office and Java. As MySQL blogger Kaj Arnö says, “Given Sun’s proven track record as the largest contributor to Open Source, I think MySQL users have plenty of reason to feel happy about the acquisition.”

MySQL will still be operating fairly independently, and there are no rumors of layoffs or shuffling within management circles. Mårten Mickos, the current CEO, will stay at the helm, though Sun may bring some key players over to California. What will really change is how MySQL is able to do business. They will now have access to key companies like Intel, IBM, and Dell because of Sun’s relationships with those vendors. Sun has also said they will move to optimize the LAMP development platform for GNU/Linux, Windows OS, and it’s proprietary OpenSolaris OS.

Though the biggest loser in this deal is clearly Oracle, some industry analysts are hoping to see Sun maximize the reach of Open Office through this acquisition. NetworkWorld’s Mitchell Ashley hopes Sun will, “figure out a way to leverage Open Office and MySQL so you can make a real play at the business IT environment and desktop dominated by Microsoft.” This would be a very interesting strategy for Sun, though it seems their short-term aim is to let the folks at MySQL continue doing what they do best. With every acquisition of this kind the enterprise IT world starts to panic, but at least in this case, it seems we can relax. If Sun keeps to their initial promises, everyone’s favorite database management software will have an even better chance at out-competing the big boys.

Monday, January 21st, 2008 Both comments and pings are currently closed.

By Haley January Eckels