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?

[TheRealMindChild]

I think it comes down to one half of the brain fighting the other. On one side, you know the free software/support model potentially is a win for everyone. But the other side is simply taken off guard by it... even though deep down inside you knew what you were going to get, up front it seems to be a surprise.

Similar to that hot chick you have been chatting up for months online... when she told you "I am a little big, but cute", deep down, you know she is a cross between a human and a hippo, but when you finally meet her, you want to dig your eyes out with a mechanical pencil.

Re:Why should this be a surprise?

[AKAImBatman]

The article is also missing one other important fact related to this statement:

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?"

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?

While MySQL has made great strides in their progress toward becoming a competitor in the Enterprise market, it's a bit of an uphill battle that they're going to have a hard time winning. The market sees MySQL as an OSS toy that children play with before they grow up and use a REAL database. Changing that perception is going to be hard.

Worse yet, it's a race against time before powerful new competitors like Apache Derby (formerly Cloudscape) start pushing MySQL out of the market.

That being said, I wish I invented an "OSS toy". A billion dollars as compensation sounds like a rather sweet deal. ;-)

Re:Why should this be a surprise?

[AKAImBatman]

some JSP container (tomcat? or does Sun make their own?)

Meet Glassfish:

https://glassfish.dev.java.net/

Sun produces a commercial version under the confusing title of "Sun Java System Application Server". (Sun seriously needs to fire their marketing department. :-/) It's worlds away better than Tomcat; which is really a straightforward development server. SJSAS/Glassfish will serve you better in a production environment than Tomcat will. It's also integrated with Netbeans (in a way that actually works!) making it a suprisingly good, if not a bit hefty, development environment.

Re:Why should this be a surprise?

[SQLGuru]

A DBA is not necessarily a database programmer and vice versa. I am a database programmer. I am *NOT* a DBA. I can write SQL statements, procedures, triggers, etc. better than most people who touch a database and yet, don't ask me to configure an Oracle database or set up replication in SQL Server (SQL Server being the pointy-clicky-draggy-droppy approach to administration, I could probably do it, but it isn't what I do and isn't what I profess to be able to do). An MCDBA is certified to do the pointy-clicky-draggy-droppy stuff, not to write database applications.

Granted, I think a DBA needs some understanding of what is done in the database (code wise), I don't expect him to be an expert in it.....that's my job.

Layne

*Disclaimer, I work in a large company where they can afford to have this division of labor. In a small company, people have to wear many hats and usually the person who wears the database programmer hat also has to wear the DBA hat (and probably the network engineer hat and a couple of others).

Re:Why should this be a surprise?

[nozzo]

yeah but in that case you would just switch the lights off and think of England

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?

[mhall119]

Tomcat is just a Servlet/JSP container, where Glassfish is a J2EE server like Weblogic or Websphere. The apache equivalent is Geronimo, which I believe uses Tomcat for the Servlet/JSP portion of the J2EE spec.

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:Why should this be a surprise?

[RelliK]

Excellent comments about MySQL. You've summarized my thoughts exactly. However, you've really dropped the ball by not moving to PostgreSQL. It's really a shame that such a gem gets left in the dust because people simply don't know any better. It's either MySQL on low end or some proprietary DB on high-end. But the truth is that PostgreSQL can do anything that MSSQL can, and it actually does a few things better. For example:

* If you start a transaction in PostgreSQL and one of the SQL statements causes an error, the transaction is aborted immediately, and all resources are immediately released. The server still expects the client to send "ROLLBACK", but that is merely an acknowledgment. Not so with MSSQL. It allows you to continue writing to the database, AND issue a COMMIT statement at the end, thus committing a partially-failed transaction! This is from the WTF??? department.

* For whatever reason, the default collation is not case-sensitive. This caused some interesting bugs when we least expected.

* Client libraries are just pathetic, especially on non-windows platforms. JDBC driver is usable, but C client library is essentially reverse-engineered and not supported by microsoft (http://www.freetds.org/). It is a small miracle we can access MSSQL at all from Linux.

Anyway, I've used PostgreSQL in my past few projects and currently using MSSQL (not my choice). It is a decent database (other than the annoyances I mentioned), but I still prefer PostgreSQL. Feature-wise, I can't think of anything that MSSQL has and PostgreSQL doesn't. It's really a shame it doesn't get used more.

Maybe it is not about Sun making money

[TheLinuxSRC]

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

This is where you have to think outside of the box. There are some who believe that Sun may simply be the pawn of Oracle. Oracle could not buy MySQL directly because of anti-trust issues etc.. Not to mention, Sun and Oracle have been "strategic partners" for a very long time. However, another company could purchase MySQL to kill it off.

I am not saying this is exactly what happend, but I do think the above author and Dvorak make some good points. Disclaimer: IANADF - I am not a Dvorak fan :)

Re:Maybe it is not about Sun making money

[morgan_greywolf]

This is where you have to think outside of the box. There are some who believe that Sun may simply be the pawn of Oracle. Oracle could not buy MySQL directly because of anti-trust issues etc.. Not to mention, Sun and Oracle have been "strategic partners" for a very long time. Don't believe everything you read on the Web. There's bad blood between Sun and Oracle right now over Oracle doing their own Red Hat-based Linux. Oracle's long-term strategy is to try to get most of its customers on Oracle Linux. They don't want to be beholden to any platform companies, especially not Sun.

Re:Maybe it is not about Sun making money

[Tranzistors]

WITPOUAATTDIKPWIWNBUITSEA - What is the point of using ad-hoc acronym, then to dereference it, knowing perfectly well it will never be used in that sense ever again?

Re:Maybe it is not about Sun making money

[Corporate Troll]

What that means is is you want to use it in propietry apps you have to buy a license.

Or release your own code to the GPL.... Which is completely fair.

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.

Re:Maybe it is not about Sun making money

[morgan_greywolf]

I agree with everything you say, but I think MySQL has been a thorn in the side of Oracle much more so than Redhat or Sun ever could be. This could just be a stepping stone for Oracle (if any of what I read is true in the first place :). It seems I have to be a bit more explicit. Now extrapolate what you just said with I what I said and draw some conclusions.

See it? (No peaking at the next paragraph until you think about it for yourself for a second.) ...

Sun bought MySQL precisely because it is a thorn in Oracle's side. They won't want it to go away, they want it to continue being a thorn in Oracle's side.

Re:Maybe it is not about Sun making money

[morgan_greywolf]

WITPOUAATTDIKPWIWNBUITSEA - What is the point of using ad-hoc acronym, then to dereference it, knowing perfectly well it will never be used in that sense ever again? HCYBSC? (How can you be so certain?)

IANADF. :-P

Java

[ForexCoder]

He misses the most obvious way of making Mysql pay and that is Java. If Sun goes down the same route that Microsoft is with Sql Server/.NET and integrates Java into Mysql, Sun gets a powerful new platform for the enterprise.

Can Sun Make MySQL Pay?

[Anonymous Coward]

Those bastards!

Sun will make MySQL pay. Boy, will they pay!

Mindshare

[soxos]

I've pondered this as well. What makes Youtube worth ~1.5 billion? Certainly not the technology. Sun has bought developer mindshare. When you think MySQL now, you're going to associate it with Sun. As long as they don't destroy it, it will reflect well on a company that, till now, has been floundering.

According to Torvald's biography, Linus walked out of a meeting in the 90's that Sun had called with the open-source community because the license they were introducing didn't pass his muster. It is interesting to see Sun coming around.

Of course, I could be totally wrong and we could be looking at a storm on the horizon.

Back Inside the Box

[Mateo_LeFou]

TFA: "Sun would have to grow MySQL's revenues to $500 million per year to bring it into sync with the purchase price"

That's a 7X increase, no small potatoes, but if Sun is thinking long term (esp., hopefully, w/r/t international markets), I don't think this is as unlikely as the article writer seems to.

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.

I didn't go to business school, but...

[spiritraveller]

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. Wouldn't it seem like a good idea to answer those questions BEFORE spending a billion dollars?

Re:I didn't go to business school, but...

[Lally Singh]

Quoting Schwartz's blog:

Where are the revenue synergies?

The more interesting question is "where aren't the synergies?" Wherever MySQL is deployed, whether the user is paying for software support or not, a server will be purchased, along with a storage device, networking infrastructure - and over time, support services on high value open platforms. Last I checked, we have products in almost all those categories.

In addition, the single biggest impediment to MySQL's growth wasn't the feature set of their technology - which is perfectly married to planetary scale in the on-line/web world. The biggest impediment was that some traditional enterprises wanted a Fortune 500 vendor ("someone in a Gartner magic quadrant") to provide enterprise support. Good news, we can augment MySQL's great service team with an extraordinary set of service professionals across the planet - and provide global mission critical support to the biggest businesses on earth.

So yeah, he's got an idea for the answer, but the author of the TFA knew he didn't have a story if he had read the entire blog entry :-P

I think the idea that people will go "hey, that sun mysql worked out pretty well for us. let's go over to sun.com and see what else they have." isn't a bad one. I think the real kicker will be support. Have some random problem in mysql that's killing you? Pay for an incident with Sun support, and the customer could be well satisfied with what they get back. They like the idea of having a vendor that will actually fix things for you, and suddenly you look at other stuff sun sells that you could get support for.

To put it in perspective, I've got a sun desktop machine (nothing fancy, an amd box that was a lot cheaper than my macbook pro) and it was getting a harmless error message. I put in a support call to sun. Until the issue's fixed (they want me to upgrade the firmware), they've been stalking me to track the ticket. E-mails and voicemail messages ("Did you get a chance to upgrade that firmware yet?") more often than you'd get from a real-life stalker. These kids don't screw around with support. I'm kind of afraid of them for that.

But I'm sure that if you have a problem that's important, you'll appreciate the dedication.

I'm sure there's a lot to be said about companies trusting mysql more now that a big company like sun's behind them, but I'm still in academia, so I donno how much of a factor that is. Probably lots.

Re:I didn't go to business school, but...

[The One and Only]

Wouldn't it seem like a good idea to answer those questions BEFORE spending a billion dollars?

I can tell you don't have an MBA!

its even worse for me

[Phantom of the Opera]

I can't see it or say any other way than "My Squirrel"

Re:Can Sun Make MySQL grow up?

[allenw]

Having Sun rename a product is probably one of the worst things that could happen. I waiting for the launches of Sun Java System Database Enterprise Server and Sun Java System Database Open Source Server to happen any day now.

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.