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Erek Dyskant

I talked about this a bit in my blog, although I was a little less harsh on Sun than you are.

I think that the reasoning is twofold. First of all, MySQL's customer list: Baidu, Google, Facebook, Dunn & Bradstreet, etc. These are just the sorts of customers that Sun would love to have and doesn't. By owning MySQL, they are buying ins to that portfolio, and can steer the MySQL companies towards using Sun hardware and consulting.

Second, Sun backs a lot of high end systems (foreign exchange, high value web sites, various bank systems) with the different java incarnations. However, those uses for java are just the things where the database backend goes to Oracle. This means that for every java customer they pick up, a whole lot of that customer's budget and mindshare ends up shipped over to Oracle.

While you mentioned that java is free, enterprise java customers still make Sun money through consulting and support, as very few high stakes companies would run purely the free license of java (especially when java is closed source) without any contact with its developers. Similarly, if they can get Oracle out of the equation for the database backend, they will be able to monetize on MySQL in the largest installations.

Sun owns MySQL...Sun will own all

Take a look at the comments on the story you linked for more if you need it. I think you jumped on the wrong bandwagon.

Erek, Thanks for your very thoughtful response. Both your comment and blog post provide good reasons for the acquistion. But I still go back to the question of whether MySQL is worth $1 billion in relation to the acquistion's ROI. Google, Microsoft or Oracle can afford to overpay but most others cannot.

Did Sun need to buy MySQL or partner with it to get the desired results?

Should Sun acquire some software companies or consulting firms that have terrific customers and make a profit? Those acqusitions would produce solid ROIs and support strategic directions.

There is a story, I think it was in the excellent book "The Soul of a New Machine", where a hardware company built a server and was selling alot of them. It turned out that when the company discovered they were losing money on each machine they sold a senior VP said that was okay because they would make it up in volume. The laws of business do not change because a technology is cool. In the long run you need to make a profit.

There are worst things in business then overpaying for an asset as long as it has quality. MySQL is a quality product.

Sun, though, needs to make a bolder move.

Thanks,
Rick

Alex

In my opinion it was a very smart step from Sun's perspective. Starting from the point they own MySQL they can provide their customers a full stack of applications needed to run and support web-site, business application, etc, starting from hardware and up to the web layer including security/access rights management.
Another point here is that Sun is promoting Solaris. Imagine they are able to provide a really good MySQL integration with Solaris: having ZFS,zones and other cool things Solaris can win a huge part of the public web hosting market which is a great opportunity for Sun,

Rick Sherman

Alex,

You are absolutely correct as to the benefits: MySQL provides “…a full stack of applications needed to run and support web-site, business application, etc, starting from hardware and up to the web layer including security/access rights management.” and Sun can integrate Solaris and MySQL to leverage each other more fully. BUT I am still asking the “numbers guy’s” question “show me the money!” Where is the business return-on-investment (ROI)? How many years before the $1 billion dollar investment breaks even?

There have been a lot of high tech companies with great tech stacks that became has-beens or, even worse, washouts. Some would argue that has already become Sun’s fate but I don’t think that has to be the case. But bold moves are necessary. Apple brought back its CEO who then gave us the iPod/iTunes (and even cooler Macs.) Apple went from has-been to darling. That happened because its tech was cool and it made a lot of profit. IBM became a rejuvenated titan by expanding its consulting legions and then its software business. This was after many people wrote IBM and its mainframe business off as dinosaurs.

Being king of web app stack and open source is cool but is it profitable especially in relation to Sun’s size or its former glory? I like Apple and have enjoyed their comeback. My engineering degree gets me to like Sun but my MBA keeps asking for the breakout strategy (with sales and profits.)

Rick

Cattechnologies

Congrats for Original BI vendors because they are faced with the challange to understand ERP (SAP) and wider application offering (IBM).

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