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MySQL Hits $50 Million Revenue, Plans IPO

Posted by samzenpus on from the they-grow-up-so-fast dept.

An anonymous coward writes "MySQL, purveyor of the open-source database of the same name, is on the road to becoming a publicly traded company, bolstered by $50 million in revenue in 2006. "It's still in the pipeline," Chief Executive Marten Mickos said of the plan to hold an initial public offering of his company's stock. He declined to discuss when the company planned to go public, but said, "We're making good progress, doing all the things we need to get done.""

35 of 124 comments (clear)

  1. Re:Capitalists = Evil by neoform · · Score: 5, Insightful

    They're the happy medium. They give away their product for free, but if you want the extras (support) you gotta pay. I'm happy with that, as I'm sure most people are.

    Programmers gotta pay the rent you know..

    --
    MABASPLOOM!
  2. Check into this stock. This is not a pump-and-dump by Anonymous Coward · · Score: 2, Funny

    The NYSE symbol is MyDIK. You can pump and dump this stock all you want. It has more uptime than MySQL.

  3. interesting timing for an IPO by ushering05401 · · Score: 5, Insightful

    I wonder if Google is planning to leverage MySQL in a proxy warfare type scenario vs. M$.

    The contention between the two giants has been heating up, and MySQL is steadily gaining ground on SQL Server for marketshare.

    Couple that with Google's recent contributions to the MySQL project and statements by one of thier engineer's (Callahan?) that they would continue to enhance the DB & pump the code back into the community... focusing on stability, recovery, and fine tuning code.

    Looks like Google could be contending with M$ on at least three fronts soon counting search, office, & now DB's through MySQL.

    I want to see them rumble. The timing of this IPO is very interesting.

    Regards.

    1. Re:interesting timing for an IPO by martenmickos · · Score: 5, Informative


      Thanks everyone for the comments! Let me first note that there was no specific news item in the article referred to at the top. We have had plans for IPO for several years. We don't see an IPO as an end-goal, but as a natural step in the evolution and growth of MySQL.
       
      As many of you will know, when a company brings in venture capital (VC) as we did 6 years ago, you essentially set a plan to either be acquired or go public (IPO) after some time. We think that MySQL is a great business and one that can and should be independent and do an IPO at some point.
       
      We share a passion for open source business - i.e. a passion to demonstrate what great businesses you can build on open source. And we want to provide the best database developers with great rewards: the good feeling of producing a product that changes the world, and the financial reward that comes with business success.
       
      We have numerous users and customers ask us about buying MySQL stock. Today we are privately held and there are no shares for sale, but once we go public anyone can buy shares in our company. And being a public company we will have more strength to grow, to hire more great developers, and to serve new customers.
       
      Does this make sense to you? It does to us.
       
      Marten Mickos, CEO, MySQL AB

    2. Re:interesting timing for an IPO by pembo13 · · Score: 2, Interesting

      How will you deal with the the business aspects that come into play when a company goes public that we geeks fear; things like being bought out by "more evil" companies?

      --
      "Thanks for all the money you paid to us. We've used it to buy off ISO among other things" -Microsoft
    3. Re:interesting timing for an IPO by ushering05401 · · Score: 2, Insightful

      It seems like a good amount of concern about gong public revolves around shifting control.

      Are there any business practices that you guys avoid that might be more difficult to avoid after going public?

      Egregious VaporWare (or at least totally premature) announcements occur to me as a stockholder appeasing move that a lot of public companies make. Any opinion on this?

      Regards and good luck.

    4. Re:interesting timing for an IPO by shaitand · · Score: 2, Interesting

      As a public company you will have to answer to the typical pump and dump investor that typically buys publicly traded stock. These people favor moves that yield increased stock price over long term strategies that result in both a stronger company and a stronger product. How do you intend to avoid this change?

      As a publicly traded company, how would you avoid a hostile takeover by a company like Oracle who has the means to buy a controlling share of the stock?

      'As many of you will know, when a company brings in venture capital (VC) as we did 6 years ago, you essentially set a plan to either be acquired or go public (IPO) after some time.'

      Being acquired and going public are both things that bring a nice return for investors. There is nothing wrong with that in itself. But is that quick return coming at the expense of the entity that is MySQL or worse, the application itself?

    5. Re:interesting timing for an IPO by martenmickos · · Score: 5, Informative


      Here is my quick view of risks with going public, and how we are dealing with them:

      Risk of being bought out. - The best protection against this is fast growth. If a company doesn't grow, then it is at risk of being bought no matter whether it is private or public, large or small. (So if you want to contribute to us - then refer us to as many paying customers as you can!)

      Risk of company culture becoming too corporate-like. - We try to avoid this by being very focused on cultivating our unique values. We add more structure and more procedures all the time, but we also try to stay free from bureaucracy and we always encourage our employees to make bold decisions.

      Risk of openness being at risk as a public company. - We make sure that all our investors (current and future) understand that the freedom of our software is vital to the success of MySQL. We also try to be open about everything else: bugs, plans, events, etc. But here we also know there will be something of a difference when going public: we will have to abide strictly by SEC rules and not disclose financial or other vital business information in any other way than publicly to everyone at given points in time.

      Feel free to list more risks and I will be happy to address them.

      Marten

    6. Re:interesting timing for an IPO by martenmickos · · Score: 5, Informative


      For part of your questions, see my response to another question on this thread:
      http://slashdot.org/comments.pl?sid=232285&thresho ld=0&commentsort=0&mode=thread&pid=18880831#188809 27

      And here comes more risk analysis:

      Risk of "pump and dump" investors driving MySQL strategy in the wrong direction. - Naturally a company will have to follow the instructions from its shareholders, but we believe that we have and will have strong and long-term investors who understand the value of strategic resilience. These investors will encourage us to invest in what gives the best value over time.

      Risk of quick return to investors negatively affecting the MySQL entity or application. - I actually believe the opposite - that a successful IPO for MySQL will give us a boost in innovation and development. I believe that as a public company MySQL would attract even more innovative partners and brilliant employees.

      Marten

      P.S. I can of course be wrong in my risk assessments here and in other responses on this thread. That's why I post them for all of you to read - in the hope that you will provide your feedback and suggestions.

    7. Re:interesting timing for an IPO by martenmickos · · Score: 5, Interesting


      I must say I disagree with your analysis of IPO. But let's first back up. It was in 2001 that the founders of MySQL decided to get venture capital on board and to go for business growth and an IPO or an acquisition in the future. I don't know if you were around back then, but that would have been the right time to ask why the founders wanted an IPO.

      Then to your analysis. I believe that an IPO has the opportunity to boost your financial resources for a very long time. I also believe that you don't have to lose control over your company. Control is lost (in my mind) if and when a company stops to grow - no matter whether the company is public or private. Even if you own all of a private company - if it does not grow then you don't have too many options as to how to run it. So although you may not have lost control to another shareholder, you have essentially lost control to the circumstances.

      And then there are other benefits of IPO. It gives you a currency for making acqusitions. It gives you exposure and typically add to your credibility among conservative customers. And it can be highly inspirational for the employees.

      Make sense?

      Marten

    8. Re:interesting timing for an IPO by shaitand · · Score: 4, Interesting

      Thank you for responding. The fact that you are engaging in an open communication with the community like this is probably a greater comfort than the actual answers you give. That said, I have always been good at poking holes in debates.

      'Risk of being bought out. - The best protection against this is fast growth. If a company doesn't grow, then it is at risk of being bought no matter whether it is private or public, large or small. (So if you want to contribute to us - then refer us to as many paying customers as you can!)'

      That certainly makes sense. Is there any assurance that such growth will occur? Is there more to this move than a spin of the roulette wheel coupled with a great deal of optimism about the outcome?

      Oracle already knows they want to purchase MySQL. Is there any way to protect the company if they move to make that purchase right away without giving the company a chance to grow?

      'Risk of company culture becoming too corporate-like. - We try to avoid this by being very focused on cultivating our unique values. We add more structure and more procedures all the time, but we also try to stay free from bureaucracy and we always encourage our employees to make bold decisions.'

      I can't really poke a hole in that. But would like to remind you; Google had a 'do no evil' policy as well. That policy and greed battled within the company and in the end, greed won.

      'Risk of openness being at risk as a public company. - We make sure that all our investors (current and future) understand that the freedom of our software is vital to the success of MySQL. We also try to be open about everything else: bugs, plans, events, etc. But here we also know there will be something of a difference when going public: we will have to abide strictly by SEC rules and not disclose financial or other vital business information in any other way than publicly to everyone at given points in time.'

      Do you mean to suggest that bug reports and other things that concern the community will only be released in SEC filings? Surely not, companies release information that concerns their business through the press and other outlets all the time.

      'Risk of "pump and dump" investors driving MySQL strategy in the wrong direction. - Naturally a company will have to follow the instructions from its shareholders, but we believe that we have and will have strong and long-term investors who understand the value of strategic resilience. These investors will encourage us to invest in what gives the best value over time.'

      Isn't this nothing but pure optimism? Anyone can purchase the stock. Are MySQL public stockholders likely to share the same characteristics as the stockholders of most companies?

      'Risk of quick return to investors negatively affecting the MySQL entity or application. - I actually believe the opposite - that a successful IPO for MySQL will give us a boost in innovation and development. I believe that as a public company MySQL would attract even more innovative partners and brilliant employees.'

      Don't many of those investors play key roles in MySQL today? Isn't there a good chance that many of those individuals will use this as an opportunity to cash in? Also, increased financial resources does not equate to superior results. Microsoft is probably the most typical example of this.

      'P.S. I can of course be wrong in my risk assessments here and in other responses on this thread. That's why I post them for all of you to read - in the hope that you will provide your feedback and suggestions.'

      Good luck Mark. I'm sure having you at the helm of the company gives everyone comfort, I know it gives me comfort. I wish you and MySQL the best and hope going public works out for you.

    9. Re:interesting timing for an IPO by yintercept · · Score: 2, Interesting

      On the comments about timing ... ah, it seems that companies want to go public when the market is going up... Rarely does a company want to go public right after a crash. Financial events often coincide because people make decisions based on financial stimulus.

      I like the idea of an open sourced company being publicly owned. I have to admit, my fears are that the bureaucratic mindset that dominates the insurance companies and mutual funds that own this world will force another great company into mediocrity of the financial borg.

      Risk of being bought out. - The best protection against this is fast growth.

      I've seen a lot of fast growing companies get gobbled up. Often companies want to merge because they think their existing structure can't keep up with the pace of the growth. I guess it is also common for companies to seek a merger when the market expectation of their growth outpaces reality (I won't go into that).

      I am just sad that going public seems to be prelude of a tragedy of another great company being sucked into the merger game.

      This world really needs ways for companies to be publicly owned yet remain independent. The two ideas are

    10. Re:interesting timing for an IPO by ronanbear · · Score: 4, Funny

      1. Get taken over by Oracle
      2. Profit
      3. Fork MySQL
      4. ???
      5. Profit (again)

      Sounds good to me

      --
      the more they over-think the plumbing the easier it is to stop up the pipe
    11. Re:interesting timing for an IPO by martenmickos · · Score: 2


      Thank you for assuming that we will reach that level!
       
      Seriously, sure that can be an issue, but getting there takes 20-30 years in the software industry. In the meantime the world will evolve and there will be some new entrepreneur with a revolutionary way to manage data, and that will be the growth story, and whoever is the huge leader at the time will have to deal with this.
       
      Marten

  4. Re:Capitalists = Evil by badboy_tw2002 · · Score: 5, Insightful

    Hell, even if they sell the software I'm happy if they give me the source. Open source != free.

  5. Oh no... by C_Kode · · Score: 4, Interesting

    Mickos said. "And by going public you get the currency to do acquisitions."

    I don't like that. I like MySQL for what it is. Not what is can do with cash or depending on stockholders approval...

    1. Re:Oh no... by kestasjk · · Score: 5, Insightful

      Maybe if they were a public company with some cash they would have been be the ones to buy InnoDB, instead of Oracle.

      --
      // MD_Update(&m,buf,j);
    2. Re:Oh no... by Omnifarious · · Score: 3, Insightful

      There's something about the diffusion of responsbility involved in a company being public that tends to cause such companies to become inordinately rapacious and evil. All the decision makers can point to the fact that they're 'morally' obligated to do whatever it takes for the company to make as much as it can for stockholders. And the stockholders have a really hard time getting together to tell the company that some actions are just too far.

      But when the number of stockholders is smaller and known, their sense of personal responsibility and morality can be appealed to, and they're more likely to pay attention to it regardless.

      --
      Need a Python, C++, Unix, Linux develop
    3. Re:Oh no... by Bastard+of+Subhumani · · Score: 2, Informative

      There's a world of difference. In a private company, the stock isn't publicly tradeable. This single fact is enough to strongly deter pump-and-dump and other forms of short-term thinking.

      --
      Only three things are certain; death, taxes, and apocryphal quotations - Ben Franklin.
  6. Re:Capitalists = Evil by Volante3192 · · Score: 3, Insightful

    Concur wholeheartedly. We're not in a utopia; OSS has to pay the bandwidth bills somehow. If all there was was OSS, then we couldn't get by on the good graces of companies since people wouldn't be paying for code, thus coders wouldn't be able to pay to host the servers or the bandwidth for that code.

    Plus, if they're making money through support, that means there are people, and more importantly companies, willing to put their faith in OSS. That's major, really.

  7. worrying by f1055man · · Score: 4, Interesting

    This worries me. I don't think the street's interests match up with open source communities or the private companies that make a living off of them. The street likes bold moves for short term gains. OSS demands slow(usually) organic growth and consensus building. A MySQL controlled by arms-length investors might throw an error, how will Mickos catch?

    This http://www.codinghorror.com/blog/archives/000842.h tml comes to mind.

    If they offer a second class of shares(dividends but no voice) then maybe it will work, but I'm not sure there's a point in it.

    1. Re:worrying by femto · · Score: 4, Insightful

      That's the beauty of free software. If MySQL goes bad the codebase will be forked and another project will rise to take its place. It will be interesting to see what the MySQL prospectus will have to say to investors about this risk.

      Good luck to MySQL. I hope they make a go of it, get rich, and don't shoot themselves in the foot by causing a code fork.

    2. Re:worrying by venicebeach · · Score: 3, Insightful

      Red Hat stock seems to be doing ok...

  8. Pump and Dump Scheme by asphaltjesus · · Score: 4, Insightful

    This is not a dig at the folks at Mysql.

    It is a warning to everyone who thinks that mysql will be immediately better for going public.

    In my finance class I learned that the best way to grow a company is on revenues. Second best is private equity. Near the bottom of the list is public equity.

    It's probably the case that Mysql's early investors are looking for their pay day. That's fine, but I'm more concerned about the long term effect of being a public company on the quality of mysql product.

    The clever slashdotter with a little cash to gamble with should buy some mysql hold it for a year and dump it. They should come out ahead and be getting out while the picture looks rosy.

    Food for thought.

    --
    Got Trader Joe's? friendwich.com RSS feeds work now!
  9. So... When will Oracle or Microsoft buy them out? by WarlockD · · Score: 4, Interesting

    I mean seriously, remember how much Oracle is being a dick when they bought PeopleSoft? And now MySQL with "only" $50 million in revenue is going IPO?

    I mean hell, remember this? A private firm can turn down an offer, but a full public company has to go to its shareholders.

    Its not about the software, its just that MySQL is a nice company that worked hard to get where it is. I just don't want to see it get destroyed because they just needed a bit more capital.

  10. Re:So much for them. by Anonymous Coward · · Score: 5, Interesting

    I call B-S. Shifting to a public company means they have to meet the quarter by quarter growth demanded by Wall Street. I've watched small companies with similar revenues get destroyed by this. It also means if they float too much stock, they're fair game for acquisition. Call this a liquidity event to repay early investors, nothing more.

  11. Re:Capitalists = Evil by dotgain · · Score: 2, Funny

    To clear up any confusion created by the parent comment:
    Free != Free

  12. Re:Capitalists = Evil by shaitand · · Score: 5, Insightful

    'If all there was was OSS,'

    No. If nobody was being paid to code or profiting from open source software that would be true. Selling closed source software is not the only way to profit from software. IBM hosts OSS, codes OSS, and makes a boatload of cash on OSS. The same is true of many companies. Most programmers work on in-house applications, the idea that companies like Microsoft are where programmers get their bread is a myth.

    More open source software means more companies have a greater potential to make money since they have the source code to make applications run in a way that is tailored to them. That opportunity existing means that more companies would take advantage of it and that my friend means more jobs for programmers.

  13. Re:So much for them. by dosboot · · Score: 2, Insightful

    Going public does mean that a company's boss is no longer a person, it is a board of directors. An original founder running the show can give a company it's soul and he can force the company to put the customer's best interests ahead of profits. A board of directors is almost invariably more cold and calculating. They'll just as easily fire the founder if it will avoid some public embarrassment over a minor setback or scandal.

  14. Re:I Predict that by PHPfanboy · · Score: 2, Interesting

    Yes, and that's why literate techies with some money (like most of us reading here) will want to buy as much stock as possible to have a better representation of our views on the company's strategy.

    If you care, like really care, about Open Source companies perhaps it would be a good idea to set up an open source investment "club" or fund to take a more serious stake in these companies. A Slashdot fund anyone?

    You have other ethical funds these days (green, Islamic etc...) which invest according to additional criteria (I'm not suggesting an open source charity, the users get enough of that already) - why shouldn't we pool our resources and influence to help steer publicly traded open source companies?

    This will allow you to get in before they go to open market IPO and take a good chunk of equity. Of course, you could start up an open source VC too for earlier stage (= more risky) investments and take a bigger chunk of equity (and the associated board-level activity)

    Put your collective money where your collective mouth is.

    (I don't work for MySQL)

    --
    29 mpg. YMMV.
  15. Of Geese and Golden eggs... by jkrise · · Score: 3, Insightful

    MySQL is today what it is and where it is, because of the quality and utility of the code it's putting out in the database world. People who invest in MySQL, the product do so because of it's suitability and superiority; not because of the financial reputation or stability of the company itself.

    By going in for an IPO, Mr.Marten Mickos may be right in that the company will be flush with funds, but then, people will be able to invest in MySQL, the company -- without caring for MySQL, the product or service or technology. Even companies like RedHat making over a billion dollars a year face enormous challenges everyday, in staying loyal to their philosophies and the customers; and avoiding takeovers by unprincipled thugs of all hues in the share markets.

    If Mr. Mickos thinks the company is going to get more business because it will now be a public firm, I think that optimism is misplaced and will be short-lived. That new business is going to come from MySQL's reputation of being a public company, not based on the technological superiority or suitability about the product. Should MySQL indeed care for such customers, given that the current mindshare and marketshate has come from the Open Source loving community?

    No one can prevent a firm from having an IPO, but I would be very surprised if MySQL can resist a takeover for even 12 months from the IPO. What that would do to employee morale which Mr. Mickos talks about, remains to be seen.

    --
    If you keep throwing chairs, one day you'll break windows....
    1. Re:Of Geese and Golden eggs... by Bodrius · · Score: 2, Funny
      Let me see if I understand...

      That new business is going to come from MySQL's reputation of being a public company, not based on the technological superiority or suitability about the product. Should MySQL indeed care for such customers, given that the current mindshare and marketshate has come from the Open Source loving community?


      You're suggesting that a for-profit business refuses to serve new paying customers... because they're 'n00bs'?

      What is this, the Soup Nazi school of open source business?

      --
      Freedom is the freedom to say 2+2=4, everything else follows...
  16. Re:Capitalists = Evil by Joohn · · Score: 2, Interesting

    Making money is fine, but they are taking advantage of the fact that people think it's more "free" than it really is. A typical example would be someone starting a new company, deciding to use MySQL "beacuse it's free, everybody knows that!". When they've finished implementing their software and feel ready to start sell they realize that they need to purchase a licence to distribute MySQL along with their own software, and face the choice of rewriting their software, throwing tons of work out the window, or simpy pay for the licence. The way I see it, this is by far the most important difference between MySQL and PostgreSQL.

  17. Re:Where is the profit going? by petrus4 · · Score: 4, Insightful

    Unbelievable. Absolutely unbelievable. I never hear anything but condemnation and the most vitriolic forms of abuse around here for anyone who would *dare* to even dream of the idea of trying to make money from software development, (including an earlier post on this very article) and yet one of the first questions I see here is whether with MySQL's IPO, the FSF are getting a cut of the cheese.

    Let me get this straight. It is by no means, in any way, EVER acceptable in your minds if anyone makes money from developing software, but just in case anybody does, they must immediately hand it over to Stallman?!?

    The rank hypocrisy exhibited by you people at times literally leaves me gasping. It is beyond description.

  18. Re:Capitalists = Evil by Luscious868 · · Score: 2, Interesting

    More open source software means more companies have a greater potential to make money since they have the source code to make applications run in a way that is tailored to them. That opportunity existing means that more companies would take advantage of it and that my friend means more jobs for programmers.

    Exactly! I'm living a real world example. The company I work for re-sells an accounting package tailored to the construction industry. We sell, train and do support for the product and we also work as an integrator developing client specific add-ons software that works with the product. The product itself was fairly good when it was introduced in the late 90's and there was a real boom during the run up to 2000 when companies dumped their legacy systems to move to Y2K compliant, Windows based software. As a result the vendor who created it kept being bought out by other larger and larger companies and resources kept being redirected from development until all that was left of the development staff was a couple of programmers kept on for maintenance purposes and it became clear the focus was riding the maintenance base for as long as possible on not on continued product development.

    Basically no serious new development was happening or had happened for several years and the resellers were finding it harder and harder to make new sales. My company had a bit of sway since we were and still are consistently the best reseller in the country. We shifted from a sales and training operation to a support and consulting operation. Because the database back end was MS SQL Server we were and still are able to develop our own applications that could integrate with the base accounting package and we could work with third party companies to integrate their software with the base accounting package and as a result we were still able to sell the accounting software by showcasing all of the additional functionality brought about by the additional packages we had created and/or integrated. We were able to offer features above and beyond what most other software packages offered, even if the base accounting package was a bit cumbersome and out dated.

    Almost two years ago a private equity firm bought out what had become the publicly traded company that owned the software in question and after deciding that there was more revenue to be made from the accounting package they put some competent managers in place. During our first meeting with them we showed them all of the software that we had developed in house and demonstrated all of the third party packages that we had integrated and told them that they were crazy not to open source the product to resellers so that we could extend the functionality of the package. We told them that as part of the license they could insist that we make any changes available to them so that they could include anything that was good in their original source code base to improve the program and increase sales revenue.

    They were legitimately concerned about having to provide support for code they didn't write if a reseller who made changes went out of business but we explained to them that we would only make changes at a clients request and that we would be very upfront with the client and let them know that any changes we made wouldn't be supported by the original vendor, only by the us, and that we would work hand in hand with the development staff to make sure that any changes we made were understood by the development staff and that we'd work with them to integrate the changes into their code base to make it a part of the original package. After going over everything with their legal department the vendor in question finally agreed to try a pilot program with us and it's been a huge success! Within a year they opened to source code to all resellers with a development staff who had been resellers for three or more years.

    Even though the software that we sell isn't the best package out their in terms of user interface, it's come a long