Stop the press! Sun Microsystems, that little company that brought us Java, the Solaris OS and a bucket load of other things, has made a bold plunge into the enterprise database market. They have announced the acquisition of the privately held open source database vendor MySQL for a whopping US $1 billion. MySQL is considered one of the most widely deployed open source databases in existence, with over 100 million installations and approximately 50,000 new copies downloaded daily.
So what does this acquisition mean for Sun? It makes Sun a major player in the enterprise database market, as well as one of the first major public companies to offer open-source software.
During a morning conference call with press and analysts, Sun CEO and President Jonathan Schwartz described the deal with MySQL as "the most important acquisition Sun has made in the history of the company... We're entering the $15 billion database market by acquiring the fastest-growing and leader of the open source database market ".
Major competitors in this market include IBM, SAP, and Sun's former database partner, Oracle. Unlike these behemoth companies that provide databases to an estimated 86% of the enterprise software market, MySQL appeals to small and medium-sized businesses as it is a simpler and cheaper (read: free) solution.
Although MySQL gives its software away to 99% of its customers, the 1% that pay for support include major players like Google, Yahoo!, and Nokia, so there is considerable profit to be made.
Considering Sun's size and longevity in the tech market, this acquisition is likely to sway more and more enterprises to sign on to MySQL's database systems.
Sun also deals in hardware and this acquisition could lead to up-sell and cross-sell opportunities as databases are always attached to servers and storage.
The industry is already buzzing about this news:
"As a leader in java content repository technology, we think Sun’s acquisition of MySQL is a very intelligent move as standards-based, open-source technology has become a dominant factor in our industry,” said Michael Moppert, CEO and chairman of Day Software. “Many organizations are looking at open, standards-based alternatives to build their information infrastructure - a phenomenon that we’ve also seen with the success of java content repository technology like the Apache Jackrabbit project.”
Day Software should know - they handle enterprise content management and Web content management for global enterprises such as McDonald's, Bank of America and GM.
So does all this opportunity warrant the hefty US $1 billion price tag? It depends on how Sun plays its cards. Sun stands to become the premier open source vendor in the industry and is looking at dramatically boosting its revenue stream on many levels.
The acquisition is expected to close in the third or fourth quarter of Sun's fiscal year, which ends on 30 June 2008.
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