Most of you know that Sun Microsystems bought MySQL in January for the tidy sum of $1,000,000,000. Since then, there has been plenty of punditry arguing that the MySQL acquisition was either brilliant or asinine. I was looking for an interesting take on the story as I was contemplating my opinion about the acquisition. It occurred to me that Sun’s acquisition of MySQL has some interesting similarities to the Democratic primary season currently under way in the United States. Honest, trust me! Hurray; a timely link allowing me to address a story I meant to cover a few months ago. I’ll explain the Democratic primary link in my closing thoughts when I outline what effect I think the acquisition will have on SQL Server. First, what’s all the hubbub about with MySQL and Sun?
$1,000,000,000 is a lot of zeros no matter how you cut it. I don’t fancy myself a financial expert, but most of the analysis I’ve read suggests that Sun paid a hefty premium for a company that has only $70,000,000 in annual sales. Sure it’s revenue has been growing at more than 50 percent per year for the last few years, but that’s a blistering pace to sustain and profits are on the slim side. A billion dollars is probably steep if you value the deal based on only its future cash flow of profits. Of course, many folks suggest that Sun got a bargain when you consider the accretive value of MySQL being able to boost related professional services from Sun, not to mention increased sales of servers, storage, and the other infrastructure items that go along with running a data center. Score one for the folks who think buying MySQL was a bargain.
MySQL’s recent growth rates might seem unsustainable for much longer, giving a point to the naysayers. However, it might be that many potential Fortune 500 customers have simply been waiting for a Fortune 500 company to be backing MySQL before committing to an open-source database. There’s a rational argument to be made that Sun’s acquisition of MySQL will make it easier for enterprise customers to consider its adoption, thus making it easier for MySQL to maintain its current growth rates. MySQL was already being used by Internet giants such as Google, Facebook, and Slashdot, and it’s now backed by a large Fortune 500 company with a rich data center pedigree. Chalk off a point in favor of those folks who think the deal is brilliant. Where does that leave us? Many people think the deal is brilliant. Many people think it was incredibly dumb. In other words, no one really knows, but hindsight should be 20/20 in a year or two.
Now that I’ve managed to share an opinion without actually having an opinion, let’s look at how this deal might affect SQL Server and why the Democratic primaries are relevant. Don't worry; I’ll avoid sharing my political biases in this commentary. I’m not suggesting that MySQL is a Democrat and SQL Server is a Republican or the other way around. But regardless of which party you favor, conventional wisdom is that the battle between Hilary Clinton and Barack Obama is bad for Democrats and good for Republican prospects this fall. In a similar way, I suspect that the short-term growth of MySQL's market share, which is driven by Sun’s acquisition, is likely going to come primarily from companies that have database servers that run on Linux. Sure there will be some customers that might have chosen a Windows-based solution who will be swayed by a Sun/MySQL option. However, most customers who would have otherwise chosen Windows/SQL Server probably aren't interested in a Linux-based solution for a variety of reasons. In the short term, Oracle is likely to lose the most market share from MySQL's gains.
In the long run, Microsoft needs to take this threat very seriously. Today, SQL Server is an enterprise-class database that merits acceptance on its features and performance regardless of price. The fact that a Windows/SQL Server solution is generally less expensive than its competitors' solutions is great, but that's not the only reason it’s chosen. Let's not forget the early days of SQL Server when customers bought into the platform because it was "good enough and a heck of a lot cheaper." MySQL is arguably more feature complete and robust than SQL Server was in the early days when folks chose it primarily because of price. Don’t believe me? Do we think a company such as Google or Facebook would have been running mission-critical systems on SQL Server in the SQL Server 6.0 and 4.2 days? Probably not.
Today, many folks in the Windows world shun open-source solutions for a variety of reasons related to supportability. Sun’s acquisition of MySQL might change that perception. Also, although Sun is clearly still in the Java/Linux/Solaris camp, let’s not ignore the fact that Sun is moving away from its proprietary solutions and has begun to offer AMD-based Windows Server 2003 platforms. Sun/MySQL might be primarily battling Oracle in the short-term database wars, but this battle is likely to drag open-source solutions more into the mainstream. In the long run, things will get even more interesting if Sun continues to invest in hardware solutions that run a Windows OS. MySQL might not have the rich business intelligence (BI) stack that SQL Server offers; integrated reporting; or a really cool extraction, transformation, and loading (ETL) tool. But never underestimate the power of "good enough and a heck of a lot cheaper." Of course, Microsoft won’t roll over and play dead ceding market share to Sun/MySQL simply because of price. I suspect that Sun’s acquisition of MySQL is due to Microsoft forcing Oracle/Sun to fight each other rather than Microsoft. The acquisition stands to make the ongoing database wars even more entertaining than the current primary season.
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