Today, Sun Microsystems turned heads by announcing plans to lay down seven and a half percent of its current market capitalization to acquire open-source database vendor MySQL AB.
Why did Sun do it? Look no further than the other major acquisition announced today, in which Oracle declared victory in its months-old bid to purchase middleware giant BEA Systems.
The growth of Web 2.0 companies is stoking demand for the database-anchored software stacks on which these companies depend. As Sun’s Alan Packer outlined in a Dec. 10 blog post, this increased demand, plus fast-moving multicore processor advances, plus slow-moving licensing reforms from entrenched database players, equals dramatically rising costs for proprietary database products.
In the face of these costs, more companies are looking to open-source database alternatives. How can database incumbents avoid losing dollars to open-source upstarts? Packer offers four strategies, but let’s look at strategy one:
““Strategy 1: Resistance is Futile – You Will Be Assimilated. Picking off your competitors can get a lot easier when they are open-source companies, because most of them struggle to address a major discrepancy between their penetration and their annual revenue.””Note that Oracle has already made some raids across the border, having acquired InnoBase, maker of InnoDB, MySQL’s most popular transactional engine, and Sleepycat Software, maker of Berkeley DB, another transactional engine used with MySQL. In response, MySQL has scrambled to introduce Falcon, a transactional database engine of its own.”Any of the major proprietary database companies could reasonably play the role of the Borg in this scenario, though, since all of them have very deep pockets. MySQL is probably the most vulnerable to takeover, since it’s privately held. PostgreSQL may be more difficult to silence, since it is developed by an active community rather than a single company.”“
In the face of today’s news, those fears of seeing MySQL picked off by a proprietary database vendor go a long way toward illuminating Sun’s acquisition logic.
Of course, Sun didn’t purchase MySQL simply to make the world safe for open-source software. The MySQL pickup gives Sun yet another seat at the open-source table, and a particularly choice one, considering the ever-broadening role that the LAMP stack is playing among Web 2.0 companies. It’s tough to ignore that the biggest Web 2.0 hitter of all, Google, is a major MySQL shop, and one that’s recently become active in the MySQL community.
What’s more, by bringing MySQL into Sun Microsystems’ fold, Sun is also improving its chances of shifting that acronym to SAMP: Solaris, Apache, MySQL and Perl/PHP/Python.
Finally, and also in the context of proprietary database price pressure, Alan Packer’s post offers some good insight on what’s behind Oracle’s BEA pickup:
““Strategy 3: Revenue Pull-Through. Include the database as a bundle with other pieces of your software stack. Focus the customer’s attention on buying something else, and chances are they won’t notice or won’t care that they’ve bought your database as well.”“
If you’ve been paying attention to Oracle, this shouldn’t be a newsflash — from hypervisor to operating system to middleware to enterprise apps, Oracle’s out to own a head-to-toe software stack, with support and licensing all tied up into what must end up looking like an omnibus spending bill.
So Sun’s forging ahead to reclaim a software-and-services-fueled spot as the dot in dot com, and to do so on the strength of open source. Oracle’s out to show Slashdot that they picked the wrong company figurehead to dress up as Locutus.
What’s the better route forward?
