Today Sun announced that it would be purchasing MySQL for $1 Billion in cash and options. For a company that announced revenues of about $50 million in 2007, this amount seems to be astronomical. In reality, MySQL has been around since 1995 and has powered much of the DotCom boom and bust and powers some of the busiest websites on the internet such as Facebook.com. In 2006, there was some talk of Oracle’s interest in buying MySQL but the deal did not materialize.
While Oracle, DB2 and SQL Server focus on the high and midrange market, the speedy MySQL serves almost everyone else and is possibly the most widely used database on the internet today and the most popular open-source database. MySQL is also a vital component of the LAMP stack (Linux, Apache, MySQL, PHP,Perl,Python) which is among the most popular development platforms for the web today.
A billion dollars for $50 million may seem like a lot to pay for a tiny company but unlike most companies that look for money without ever turning a profit, this one actually makes money and has unbeatable brand recognition, several hundred books on using the database, a huge development community and even a certification program. Sun may do quite well by providing consulting services on the platform. If MySQL had gone the IPO route, I am sure its valuation would have been a bit higher than $1 Billion but the acquisition route is cleaner and headache free.
Let us see what Sun does with this venture.