Sun buys MySQL for $1 billion to take centerstage in the web economy

Sun Microsystems announced today that it will be acquiring MySQL for $1 billion. Sometimes the good guys get exactly what they deserve.

At first blush, it seems an odd acquisition for Sun. Sun, after all, is not (or was not) in the database market. But Sun's historical strength in the web economy, and MySQL's current role as the heart of the web, makes it an interesting, important step for Sun to make. Said Sun CEO Jonathan Schwartz:

Today's acquisition reaffirms Sun's position at the center of the global Web economy. Supporting our overall growth plan, acquiring MySQL amplifies our investments in the technologies demanded by those driving extreme growth and efficiency, from Internet media titans to the world's largest traditional enterprises. MySQL's employees and culture, along with its near ubiquity across the Web, make it an ideal fit with Sun's open approach to network innovation. And most importantly, this announcement boosts our investments into the communities at the heart of innovation on the Internet and of enterprises that rely on technology as a competitive weapon.

Bingo. Perhaps most importantly for MySQL and its employees, an acquisition by Sun means that MySQL gets to continue being a pureplay open-source company and won't need to sacrifice the ideals or the benefits of open source to suit a halfway (and half-baked) stance on open source.

There are only two companies that could have done an acquisition like that: Red Hat and Sun. But only Sun could have made an acquisition with roughly $800 million in cash in exchange for all MySQL stock and assume approximately $200 million in options. This is exceptional for a company (MySQL) that was edging toward $100 million in sales in 2007 (My unstudied guess is $80 million or so.) The two expect to close the deal in late Q3 or early Q4 of Sun's fiscal 2008.

Sun hasn't traditionally done well with acquisitions, so it will be important that this accelerate Sun's recovery and growth and not slow it. I'm confident that the executive ambition to do so exists. It's just a question of whether or not Sun's rank and file will follow suit. With the stakes so high - reestablishing Sun as the center of the web is worth billions - Sun employees have every reason to do so.

Oracle will say this isn't a threat and IBM will laugh it off, but this is an intelligent move by Sun. I'm not aware of any of the other major enterprise vendors building so specifically to suit the web economy. Sun has a full arsenal of storage, operating systems, hardware, and now database to attack the market.

It's an exciting day for open source. Congratulations to Marten and team for avoiding the glare and bother of an IPO at a price that reflects the amazing contributions they've made to open source.