Can Sun Make MySQL Pay?

AlexGr submitted a nice followup to last weeks billion dollar Sun buyout of MySQL. He notes that "Jeff Gould presents an interesting analysis in Interop News: How can an open source software company with $70 million or so in revenue and no profits to speak of be worth $1 billion? That's the question Sun CEO Jonathan Schwartz has been trying to answer since he bought MySQL last week. Like most commercial open source companies, MySQL makes money by enticing well-heeled customers to pay for an enterprise version of its product that comes with more bells and whistles than the community version it gives away for free. It appears though that the additional features of the Enterprise version are not enough to compensate for the revenue-destroying effects of the free Community alternative. What else could explain the surprising fact that MySQL has quietly filled out its open source portfolio with a closed source proprietary management software tool known as Enterprise Software Monitor?"

Comments

Why should this be a surprise?

[tomhudson]

"What else could explain the surprising fact that MySQL has quietly filled out its open source portfolio with a closed source proprietary management software tool known as Enterprise Software Monitor?""

They're offering better support. Haven't we always said that the rationale behind open source is you can offer the product for free, then offer paid support?

Why is it every time someone actually implements this, they're criticized?

Re:Why should this be a surprise?

[trolltalk.com]

"They're offering better support"

No, as per the quote they're offering a proprietary, non-free software product. Hence the criticism.

The proprietary, non-free software product is part of their "better support." Not all support is a monkey on the phone with an Indian accent going "Hi, my name is Mike, how may I help you?"

Most people would rather have a nice piece of software that helps them do a better job, than have to wait on the phone.

Re:Why should this be a surprise?

[Anonymous Coward]

Customers don't pay for MySQL professional because it's not that great of a database. As a "free" option, there's tons of support for it. It was seen early on as "the" database for OSS work. As a result, nearly every OSS tool in existence is built around MySQL.

However, if we're talking about someone looking to pay for support, we're probably talking about a business of some sort. And for businesses, features like ANSI syntax, transactions, reliability, scalability, tools, familiarity to the DBAs, and a strong reputation for customer service are all factors that play into their decision. Why would they purchase MySQL when options like SQL Server, Oracle, DB2, Informix, Pervasive, Teradata, and half a dozen other RDBMSes with stronger reputations in the market are available?

Well, as one of the business customers who pays for MySQL Enterprise, I can tell you why we pay for MySQL. Because when our company was much smaller, and we needed a SQL server, we chose to go with MySQL because it was free, because a lot of people use it, and because some of our developers had experience with it. If we'd have been a little bit smarter at the time we would have chose Postgres, but that's water under a bridge. So we built up our company based on MySQL, and our company grew and grew. Eventually we grew to the point where we had locking issues with our MyISAM tables. Table level locking just didn't provide the concurrency we needed for our services. We then moved to InnoDB tables, which gave us the concurrency we needed. We eventually bought the InnoDB Hot Backup tool for ~$999 a copy, because the hot backups beat the dumps we were doing on our slave SQL servers. Fast forward five years. Our company is much bigger and much more profitable. We have plenty of budget to buy any SQL server we need.

However, we're stuck on MySQL because MySQL currently hosts all of our tables. Moving all of our tables en mass is simply unrealistic. We have too many clients and the downtime would be severe. When we move databases over, we have to move everything that is JOINed in any query. Most importantly, for a majority of the time that we've used MySQL, they had no stored procedure support. Therefore, all of our applications have hundreds of hard-coded queries and associated logic. Without the abstraction layer provided by stored procedures, moving our databases requires rewriting all of that code. Even worse, the hard-coded queries contain many MySQL-isms (MySQL specific syntax) and depend on MySQL behaviors, like the idea that there's a date 0000-00-00 00:00:00. Obviously there is no such date, but you'll find many MySQL databases which contain a DATETIME field and use that "0" instead of NULL. When you try to store that date on other SQL servers, or when you try to fetch that date into a typed variable in certain languages like .NET, obviously they don't allow their date/time type to contain invalid dates/times and therefore you get an exception.

I could go on and on about the issues trying to port legacy MySQL code, but the basic fact is, without stored procedures to encapsulate their vendor specific extensions, behaviors, and syntax, we have neither a hope nor a prayer of moving away from MySQL. MySQL 5.0 provided very basic stored procedure support, and we are using this as our chance to finally escape, but it's still a huge process.

Now, why are we so desperate to leave MySQL when they're the SQL server that helped us build five years of solid success and amazing growth in our company? For precisely that reason, we've grown. And as we've grown, the load on our MySQL server has grown quite a bit. So we provisioned some powerful hardware to give MySQL the CPU, memory, and disk power that it needs to do what we ask of it. But behold, our effort to give MySQL more power failed. MySQL's only production-ready engine to provide the concurrency we need (MVCC or row level locking) is InnoDB, and InnoDB's scalability is limited when it comes to a modern high end server

Re:Why should this be a surprise?

[photon317]

This sounded great up until the MSSQL part. Don't repeat your mistake and lock your company into more years of fighting bullshit and eventually migrating away again (or dying). If PostgreSQL can meet your needs (and really, there are very few needs it can't meet), migrate to that instead. Or if you really need certain enterprisey things that Pg doesn't have, then consider Oracle or DB2. But don't make the mistake of locking yourself into MSSQL as a way to get out of MySQL. MSSQL is just as bad as MySQL in its own unique ways, and Microsoft is famous for finding ways to trap you into long-term vendor lockin.

Re:Mod article -1, Troll

[AutopsyReport]

Actually, it has less to do with support and more to do with the fact that companies that develop commercial, proprietary, closed-source applications using MySQL are required to purchase MySQL Enterprise if they want to use MySQL. Otherwise, they have to look to completely free alternatives, such as PostgreSQL.

There are certainly customers that adopt MySQL Enterprise purely for the support, but I believe the majority of customers are using MySQL Enterprise for commercial purposes because they have no other choice if they wish to adopt the MySQL platform.

Re:Maybe it is not about Sun making money

[theManInTheYellowHat]

I can not believe that the reason for paying a very large sum of money for an Open Source company, just to kill it, would be the motivation.

Suppose that were the case and this morning all the download areas of MySql were gone. There was no way to get the software besides paying for it, and then make it worse, it cost a large sum money.

Don't you think that someone would take the source that is out in the wild and fork it off to make another Open Source product? It is included in several large distros, the source is scattered all over the net. I do not think that it is killable.

Can't Agree With Some of the Analysis

[segedunum]

How can an open source software company with $70 million or so in revenue and no profits to speak of be worth $1 billion?

How were any of the dot com businesses valued at more than that? A lot of MySQL's value comes from its standing as basically the database backend of the web. Yes Postgres is out there, but most databases are MySQL. That name carries a fair bit of weight.

It appears though that the additional features of the Enterprise version are not enough to compensate for the revenue-destroying effects of the free Community alternative.

Why is it revenue destroying? I see lots of analysts fail to understand this. The free 'version' of MySQL forms most of the web backend databases out there. There is such a huge installed base. If and when companies look to do other things then it's a logical jump for them to pay for MySQL's enterprise stuff. It is highly doubtful that MySQL could have got the revenues they have got, competing against Oracle, SQL Server and alike without that installed base and word of mouth.

The fact that the second most famous open source company on the planet has been busy selling closed source software has attracted remarkably little critical notice from the usually vocal open source community.

Probably because there are lots of tools for MySQL database out there, open source or not, and it doesn't stop people using MySQL. If MySQL wants to sell closed source enterprise tools, all power to them.

I do find it amusing though that the company's marketing mavens obviously don't think it's a good idea to tout this aspect of their strategy.

Why would they? Although I grant you, I do find their literature on what version to use misleading, but if you go the open source route then you have to work it out for yourself.

The reality is that - despite or more likely because of - its open source business model, MySQL wasn't growing fast enough or making enough money to entertain the prospect of an IPO. Its venture capitalist backers, in for many tens of millions of dollars, were no doubt getting nervous as they realized the company was never going to be another Salesforce.com or VMware. Of course, as Jonathan Schwartz recounts in his blog, people have been making private offers to acquire MySQL for years, and these offers have always been declined. But this time the owners - the VCs, founders and executives - agreed to sell. No doubt they concluded that, on the eve of a possible slowdown in IT spending and with a strategic buyer like Sun willing to pay many times the company's paper value, they weren't likely to see a better offer in the foreseeable future.

Can't disagree with that though. I think many thought they were going to be in for hundreds of millions of dollars, and simply took what was on offer from Sun. That doesn't mean that MySQL won't be worth more then a billion dollars to Sun in all sorts of peripheral ways. Of course, it depends on Sun's management. That, is another story ;-).

Personally, I find Postgres a bigger option to MySQL, which the author did not consider. Why Sun has bought MySQL when a database of that quality is already out there in the open source world, I don't know. We'll have to see.