For those who have fret about Microsoft fighting against open source, I have news for you: Microsoft's impact on open source may be worse as a friend than as an enemy.
Now with MySQL inside! Yes, we can.
(Credit: Microsoft)Over the past few years, Microsoft has steadily warmed to open source, to the point that it now hosts its own open-source code repository and has seen its Microsoft Public License used more often than venerable licenses like the Mozilla Public License or the Eclipse Public License, according to new data released by Black Duck Software.
The open-source world should be worried.
After all, as IBM's Savio Rodrigues points out, an open-source-friendly Microsoft no longer has qualms about embedding open-source software like MySQL into its products. In particular, Microsoft supports MySQL as part of its Azure cloud service...without paying Sun a dime for the privilege.
It's a completely legitimate way to offer open-source value to Microsoft customers, and is very similar to what Amazon is doing with MySQL.
However, as Rodrigues notes, it's not necessarily good for MySQL, or other open-source projects that could be used this same way:
The larger point is if Amazon, Microsoft, IBM, HP, Google, Cisco, EMC/VMware, or Oracle/Sun offer a simple and supported cloud service for running MySQL, Tomcat, JBoss, Mule, or Apache HTTP instances, what reason do customers have to acquire "enterprise subscriptions" from the vendors developing these open source projects? Until now, the value of an open source "enterprise subscription" has largely been access to support and access to administration and management tooling. In the case of MySQL, the former is provided by Amazon RDS and Azure SQL as part of the per-hour service. Again in the case of MySQL, the latter is rendered unnecessary or replicated through Amazon RDS and Azure SQL tools.
Consider it a super-friendly, and super-dangerous, bear hug.
For those who think that this affects commercial open source and not community-led open source, think again. Money and open source don't grow on trees.
The explosion of open-source development has directly correlated to the explosion of cash investments into open-source projects, starting with IBM's $1 billion commitment to Linux. MySQL, the database, would be a pale shade of what it is today without MySQL AB, the company that has funded the overwhelming majority of its development.
So, is this cause to castigate Microsoft? No. After all, it's really no different from what Amazon, Google, Apple, and others do with open source.
Rather, Microsoft's move should serve as a reminder to open-source companies that they need to upgrade their business models or risk being rendered irrelevant by the cloud and all that it enables vendors to do with open-source software.
After all, the protections that the GNU General Public License (GPL) and other open-source licenses offer in the traditional software world are essentially meaningless in the networked world, where software is used to create services, but isn't actually distributed.
This is as true for Red Hat as it is for open-source start-ups like Openbravo and Talend. Imagine if Amazon decides to start offering JBoss as a cloud service. Or Red Hat Enterprise Linux, for that matter (minus the trademarks).
It could happen. Actually, I'll go one step further: it will happen. It's just a matter of when.
This is why companies like IBM, Google, and increasingly Microsoft strategically invest in open source, but don't try to directly monetize open source. It's also why the "open-source companies" need to figure out a Plan B before Plan A gets taken from them.
The European Commission must be feeling a bit silly right about now. Despite insisting that Oracle has not responded to its requests for comment and concessions in its planned acquisition of Sun Microsystems (and the open-source database MySQL), Amazon.com recently offered the EC all the proof it needs that MySQL competition remains alive and well.
Competition at pennies an hour.
(Credit: Amazon)For those who missed it, Amazon announced last week a fork of the popular MySQL database, called RDS (Relational Database Service). RDS is essentially a hosted version of MySQL, one that developers can write to at the minuscule cost of pennies per hour.
Oracle hasn't even started with MySQL yet, and it already faces significant competition, not to mention the other MySQL forks (e.g., Drizzle).
As Redmonk analyst Stephen O'Grady writes:
From here, it seems fairly clear that while RDS will not be the best option for every MySQL user, it will find a more than adequate market of customers who are willing to trade money for time, as (former MySQL CEO) Marten Mickos might put it. Assuming that Amazon can realize its typical economies of scale by amortizing the management and administration costs of the service over a wide array of machines, the product should more than pay for itself simply by widening the addressable market.
How much wider will it make the addressable market? At a minimum, it will lower the barriers to entry for customers with relational needs (read: most customers) and a lack of cloud expertise. It will be fascinating to see, however, if Amazon has far grander ambitions in mind.
Interesting, and somewhat unfair to Oracle. Presumably Amazon's entrance into the MySQL market is A-OK because Amazon isn't currently a database company, but it is a significant and growing infrastructure provider. Why should it get to own a complete stack, but Oracle can't?
That, after all, is what Oracle is attempting to accomplish with the Sun/MySQL acquisition. Sun gives it hardware, while MySQL gives it a strong entry into the Web database market and an effective hedge against Microsoft in lower-end enterprise needs.
Oracle's bid for Sun/MySQL, in other words, isn't about squelching competition, but rather about enhancing it. Amazon's RDS proves that strong, viable competitors to MySQL can arise from within the MySQL community, which disproves the EC's argument that Oracle's control of MySQL will somehow crush competition.
And if the deal doesn't hurt competition, as Amazon RDS all-but-proves it doesn't, then the EC's opposition is hollow and should be shelved, as The 451 Group's Matt Aslett argues.
It's time for the EC to acknowledge it was wrong, and move on. Amazon surely has. But until the EC makes a final decision, Oracle (and MySQL) can't.
Postgres for years has lived in the shadow of MySQL's media attention: the "boring" database that quietly goes about its work while its sexy Web 2.0 cousin wins the popularity contest.
Recent data from the Eclipse Foundation, however, suggest that Postgres may be ready to make significant waves in the enterprise, even if it doesn't make headlines.
In a recent letter to European Union's commissioner of competition, former MySQL CEO Marten Mickos stressed that MySQL's target market is the emerging Web database market and that the enterprise IT market was never really a source of strength (or focus).
Postgres is the opposite.
Postgres is an enterprise Java database, more suitable for carrying corporate data than the Web's consumer data. According to a 2009 survey by the Eclipse Foundation, MySQL (27.7 percent) and Oracle (27.3 percent) were the top-two databases used by those surveyed, with Postgres registering a respectable but still distant 9.9 percent.
Given that Oracle database users are far more likely to use Java as their programming language to develop server-centric applications, while MySQL users are three times more likely to use PHP as their primary language (17.4 percent of those surveyed use it, versus 5.4 percent for all users) to builde RIA/Web applications, Postgres is clearly more Oracle than MySQL.
Granted, the Eclipse community is traditionally Java-centric, so it's not surprising that Java would be prominent among its developers. But it's also the case that enterprise IT remains a Java/.Net market, and in such a market Postgres could be poised to boom if it can muster sufficient marketing to make its message heard.
This is where EnterpriseDB comes in.
The MySQL community would not be as well-developed as it is without MySQL, the company. MySQL AB has funded the overwhelming majority of MySQL database development, but it has also provided the marketing muscle to make a name for the Web database.
Postgres has traditionally been a standalone, organic open-source project with little concerted corporate involvement. EnterpriseDB has started to change that, but for too long wrongly fixated on competing with MySQL, a database that serves a different market and different developers. The company also spent too much time talking about Oracle migration technology, rather than focusing on why Postgres is a great database.
That may be changing.
Postgres just released version 8.4 of the venerable database. In EnterpriseDB's discussion of the release, there's no mention of Oracle, MySQL, or any other competitor. Instead, EnterpriseDB seems to be focusing more on its commitment to Postgres development, adding significant enterprise hardening through its open-source Postgres Plus distribution.
It's a welcome change, and one that could position Postgres to take a bigger share of the enterprise Java database market--not because it's cheaper than Oracle or more open than MySQL but because it's a great database in its own right.
That's the right messaging for EnterpriseDB...and Postgres.
Mårten Mickos
As the European Commission continues to evaluate the potentially deleterious effects of Oracle's proposed acquisition of Sun Microsystems and its open-source MySQL database, concern is rising that delay will harm MySQL without helping competition.
One who shares this concern is former MySQL CEO Mårten Mickos. On Thursday, Mickos sent a letter to Neelie Kroes, the European Union's competition commissioner, urging that the deal be approved for the good of the market and MySQL. He also spoke with CNET News' Stephen Shankland on Thursday.
Below is the edited full text of the letter.
Helsinki 8 Oct 2009
Mrs. Neelie Kroes
Commissioner for Competition
European Commission, J70
B-1049 Brussels/Brussel
BELGIQUE/BELGIE
Dear Commissioner Kroes,
I am writing to you regarding your review of Oracle's pending acquisition of Sun Microsystems. As I understand it, the EU Commission is concerned about a risk of undue concentration of power in the database market. Having been the CEO of MySQL from 2001 to 2009, and built a business that was serving a new market unmet by Oracle and others, I can agree with the questions posed, but I do not share the concerns that have been expressed. In the following, I will explain why.
In brief, my reasoning is as follows:
- Oracle has as many compelling business reasons to continue the ramp-up of the MySQL business as Sun Microsystems and MySQL previously did, or even more.
- Even if Oracle, for whatever reason, would have malicious or ignorant intent regarding MySQL (not that I think so), the positive and massive influence MySQL has on the DBMS market cannot be controlled by a single entity--not even by the owner of the MySQL assets. The users of MySQL exert a more powerful influence in the market than the owner does.
Many expected Oracle to harm MySQL as far back as 2005, when they acquired the InnoDB storage engine that plays a crucial role for many MySQL customers. And yet Oracle increased their investment in InnoDB since that time, making MySQL a stronger player in the market.
For further detail on my views on Oracle's intent, please see this interview with me in Forbes Magazine in April 2009.
It may at first blush seem counterintuitive that control of the MySQL assets does not automatically bestow control of the MySQL installed base. But the free installed base of MySQL--enormous on a planetary scale--is voluntarily but not mandatorily coupled to the commercial market of MySQL. It produces huge benefits to the MySQL business, but it is not controlled by it.
Background
The impetus to write this letter comes from my concern with the talented teams of the MySQL business unit and of Sun Microsystems in general. I am also troubled by certain factual distortions about a subject matter that I am intimately familiar with: MySQL and its business model. Open-source business models are complicated and quite different, and it took many years to fully understand and shape the one of MySQL.
A Finnish citizen, I served as chief executive officer of MySQL from early 2001 to February 2008, when Sun acquired MySQL. After that, I served as senior vice president of the database group at Sun until the end of March 2009. Being the only person to have served as the CEO of MySQL and to have attended every board meeting ever held, I believe I have unique insights into these matters.
To be clear, I resigned from my position in March 2009, and I presently have no commercial or financial interests in the MySQL ecosystem, Sun, or Oracle (or any other vendor in the DBMS market, for that matter), other than my loyalty to Sun employees in general and the MySQL team in particular.
MySQL's Markets and Installed Base
MySQL is the world's most popular open-source relational database, and potentially the most popular relational database of all. It has an enormous influence and impact on the usage and the buying patterns of relational databases (also known as RDBMSs), in particular for Web applications. One might even state that the Internet would not be what it is today, were it not for MySQL. Staffed by a highly talented team of passionate employees, the Swedish company MySQL grew the MySQL business from a small one in 2001 to a massive one in 2008.
"MySQL" refers to two things. On the one hand, there is the huge (community) phenomenon MySQL...On the other hand, there is the business of MySQL...Those two meanings of the term "MySQL" stand in a close mutually beneficial interaction with each other. But most importantly, this interaction is voluntary and cannot be directly controlled by the vendor.
In this discussion, the term "MySQL" refers to two things. On the one hand, there is the huge phenomenon MySQL--an estimated 12 million active installations under a free and open-source software license, millions, if not tens of millions, of skilled users and developers, and tens of thousands of corporations who use MySQL one way or the other.
On the other hand, there is the business of MySQL, which is growing rapidly, thus rewarding the owners of the assets (currently Sun Microsystems).
Those two meanings of the term "MySQL" stand in a close mutually beneficial interaction with each other. But most importantly, this interaction is voluntary and cannot be directly controlled by the vendor.
What I mean is that the vast and free installed base of MySQL is using it of their own free choice, unencumbered by the vendor and under no obligation or restraint. That is the nature of open source. And conversely, the MySQL business is supporting the free installed base of MySQL (by improving the product) voluntarily and in the hope of deriving benefit from the installed base.
This is the paradox of an open-source business, and it took me a long time to truly understand how powerful a force it is. It is unlike any traditional business. The key point is that both the users and the vendors of open source are engaged in a powerful free-market dynamic that cannot be contained by any single entity.
It is in everybody's interest that the two sides of MySQL produce benefit for and derive benefit from each other. But neither group can mandate or control the other one. This is a core philosophy of open-source software and more generally of the "architecture of participation" (as defined by Tim O'Reilly). There is a mutually beneficial voluntary relationship, but there is no control by one group over the other. In more colloquial terms: the owners of MySQL cannot force MySQL users to pay up, and the nonpaying users cannot force the business to subsidize them.
Anyone acquiring the MySQL assets will therefore acquire an ability to control the business aspect, i.e., meaning how MySQL is licensed commercially, but only an opportunity (and no free reign) to derive benefit from the free user base.
This explains how the MySQL business can be valued highly in the market ($1 billion, when acquired by Sun in February 2008) while at the same time providing no way of controlling its installed base. This unusual relationship between market share and installed base is at the core of the topic. The market share is small but controllable, to some degree. The installed base is enormous but not controllable. The installed base is, and can be, hugely beneficial to the owner of MySQL, but only to the extent and for as long as this owner of MySQL enjoys the trust of the installed base.
To put it in numbers, it may be useful to see the usage of MySQL, as divided into three categories:
... Read moreOracle is determined to keep MySQL if it acquires Sun, but the reason likely has little to do with open source and everything to do with Microsoft. Oracle doesn't compete with open source. Not really. Open source is simply a means to an end, and in the case of MySQL, a means to denting Microsoft's rising strength in emerging markets where Oracle's expensive database technology doesn't resonate.
In fact, in a recent survey by Evans Data, over 50 percent of developers in the emerging markets of China, India, Eastern Europe, and Latin America use Microsoft's SQL Server, compared to 46 percent using MySQL.
Oracle database technology? It's used, but not nearly as extensively.
MySQL gives Oracle a club with which to beat Microsoft. It's not about open source. It's about the MySQL developer community and its competitive price point, two things that Microsoft also has going for it. Arguably, though, open source provides Oracle a strong competitive differentiator against Microsoft in these markets.
Even so, I think we'll eventually see open source aiding both sides in this battle, as Microsoft learns to drop its acrimonious stance toward open source and instead strategically embrace it, as IBM, Oracle, and others have done before it.
Oracle can't afford to abandon MySQL. It's the key to unlocking its ability to effectively compete with Microsoft in tomorrow's big markets.
Open-source advocates need to get their stories straight. Are we a big-tent movement, or a parochial club that is hell-bent on limiting membership...and efficacy? Unfortunately, it increasingly seems that the open-source community is determined to be the latter, and has taken positions on various events that are out of keeping with the founding principles of open source.
Take Microsoft. The company has long been a controversial figure in open source, as well as in the broader technology industry, and for good reason. Conviction for abusing monopoly power will do that to you.
But Microsoft has spent the past few years extending an olive branch to the open-source community, only to be criticized, questioned, and rebuffed. Last week the software giant created the CodePlex Foundation, designed "to enable the exchange of code and understanding among software companies and open-source communities." The foundation has assembled a solid core of directors and advisors, including Stephen Walli and Monty Widenius (formerly of MySQL).
"I don't believe it for a minute," thunders Steven J. Vaughan-Nichols, speculating that "Microsoft doesn't mind stealing from open source, but any deals it makes are only good while there's a clear, short-term benefit to Microsoft." This is probably true, but it's equally true of every profit-seeking company on this planet, minus the emotionally-charged (and inaccurate) term "steal."
Do Google, IBM, SAP, Jive, MySQL, Red Hat, etc., use open source to advance their self-interest? You bet they do. They have a fiduciary duty to do exactly that. And do they selectively adopt open source without always contributing back? Of course.
Let's face it: no one--even open-source community contributors--writes open-source software purely out of the goodness of their hearts. This shouldn't be a surprise: open-source luminary Eric Raymond wrote about it over a decade ago.
But it's telling that Microsoft is the company singled out, more often than not. It is very likely that Microsoft could open source every line of its code and still be treated like a pariah by the open-source community.
Or, rather, by a vocal segment of that community. It's the part that doesn't have to meet a payroll. Perhaps the sort of person that Hugh MacLeod was referencing in a tweet he made: "It's easy to spot a purist. They're the ones without any skin in the game."
When your only job is to yell down others, you don't need to pay much attention to what you say.
But Microsoft isn't the only company to get pilloried. Oracle gets its fair share of abuse, too, and often enough on this blog. It seems that abuse is proportional to one's income statement, and the potential to abuse one's market position to the detriment of customers, as BusinessWeek recently wrote of Oracle.
Hence, ever since Oracle announced its intention to acquire Sun and, hence, MySQL, some within the open-source community have been wringing their hands at a frenetic pace. "Oracle will kill MySQL!" they moan.
Gartner rubbishes this concern, insisting that "the fact of the matter is (Oracle) cannot destroy the (MySQL) product." It's licensed under the GNU General Public License, after all, which preserves the freedom to fork the code. In fact, MySQL has been forked several times already.
This isn't to suggest that Oracle couldn't damage MySQL by slowing its development, or shutting down internal development altogether. Of course it could: Sun/MySQL employs the overwhelming majority of developers who write MySQL. To control them is to control the code.
But if there's any truth to open source's claims that it provides freedom (through the right to fork), then owning MySQL, the company, shouldn't be tantamount to owning MySQL, the code, and Monty Widenius, and others could merrily pick up where Oracle left off.
That is, assuming we really believe open source is a liberating force. Do we?
I do. That's why I don't worry about Oracle's impact on MySQL. Heck, I figure Red Hat or someone would simply hire the MySQL engineers and start MySQL II if Oracle attempts to kill the project (which I don't think it has any intention to do).
It's also why I welcome, not reject, Microsoft's attempts to open itself to open source. Those with no skin in the game find it easy to point fingers and malign others' imperfect attempts to engage. They forget that it's hard for closed-source companies to open up, as SAP's Dirk Riehle writes, but with the incentives to open up increasingly visible, companies will find a way.
We should be encouraging them to do so, not second-guessing their every move. And we should recognize that there are times when the open-source alternative is not ready to displace a proprietary incumbent, as Esther Schindler notes, which means that we're going to need to learn to get along for many, many years.
I'm not suggesting that Microsoft or Oracle has been perfect. But don't believe that IBM, Red Hat, Alfresco, MySQL, or (insert vendor of choice) has been perfect, either. Each of us is making this up as we go along. Sometimes we screw up, but that doesn't mean it's intentional.
Oracle has much to say to Sun Microsystems customers in a front-page advertisement it placed in Thursday's European edition of The Wall Street Journal.
The advertisement commits to greater investments in Sun hardware and Solaris software, but has absolutely nothing to say about MySQL. Is this a necessary omission to appease European regulators, or is it a sign of Oracle's intentions?
In the advertisement, Oracle commits to the following:
(Credit:
Oracle)
IBM, which has been cleaning up at Sun's expense, gets a warning from Oracle CEO Larry Ellison: "We're in it to win it. IBM, we're looking forward to competing with you in the hardware business."
Sun's business has tanked in the ongoing uncertainty over Oracle's takeover bid. The advertisement is clearly intended to placate customers that might otherwise flee to the apparent security of a relationship with IBM or Hewlett-Packard.
It's interesting, therefore, that Oracle gives no assurances about MySQL. This could simply be a politic action designed to sidestep the ire of the European Union, which has been investigating the effects an Oracle acquisition might have on Sun's MySQL business.
Or it could simply be a recognition that assuaging the fears of MySQL's customers is a comparatively unimportant task. MySQL was doing roughly $100 million in sales at the time Sun acquired the company. Given that Sun stands to lose billions in its hardware business the longer the Oracle bid drags on, losing a few tens of millions from MySQL is pocket change.
Besides, it's not at all clear that Oracle's decision to snag Sun has done anything to slow MySQL adoption. A vocal minority within the open-source development community has wrung its hands over the deal, but I've yet to hear MySQL's customer base, which skews toward the technology-savvy Web crowd, fretting about Oracle's impact on MySQL's business.
Oracle's advertisement is designed to shore up confidence in the CIO crowd that still buys Sun and probably has no clue that their organizations are running MySQL throughout the enterprise. At some point they'll know. But by that time, Oracle's acquisition of Sun should be complete.
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Neelie Kroes
(Credit: European Commission)IBM and Hewlett-Packard could not have planned it any better.
The European Union has launched an in-depth investigation into Oracle's acquisition of Sun, potentially delaying the merger by several more months. In doing so, the EU is actually guaranteeing the demise of Sun's hardware business and gifting it to Sun's competitors by misunderstanding the deal's impact on open source, generally, and on MySQL, specifically.
If you haven't been paying attention, the delay on the merger due to U.S. and EU scrutiny has already resulted in two shockingly bad quarters from Sun. Many enterprise customers are already moving to competitors like IBM because of the uncertainty surrounding the future of Sun products, The Wall Street Journal reports.
Further delay will only compound the problem.
Unlike the U.S., which approved the deal, the EU's Competition Commissioner Neelie Kroes is concerned that Oracle's takeover of Sun will end up diminishing competition:
Systems (like MySQL) based on open-source software are increasingly emerging as viable alternatives to proprietary solutions. The Commission has to ensure that such alternatives would continue to be available.
The Commission doesn't have to. MySQL's open-source license already does. It's open source: even Oracle can't put the open-source genie back in the bottle once it has been released, as MySQL has, under the GNU General Public License.
Consider: some of the folks cheering loudest for the EU to clamp down on the proposed merger, like representatives from Monty Program, have already demonstrated Oracle's (and Sun's) lack of control over MySQL. Monty Program has created a significant fork, or derivative, of the MySQL database, and stands to gain much by the EU's obstructionism.
In delaying the merger, the EU isn't helping MySQL. It's helping its competitors, including Drizzle, OurDelta, MariaDB (Monty Program's fork), Percona, etc.
Competition within and around MySQL is alive and well, regardless of Oracle. After all, as former MySQL CEO Marten Mickos has been saying for years, MySQL has never really competed with Oracle, anyway. MySQL serves (and has helped to create) a very different market: the Web database market.
When asked in April if Oracle's bid for Sun would end up hurting MySQL, Mickos responded: "MySQL works for Web-based applications. Oracle is for older, legacy applications." The vast majority of Oracle's revenue comes from enterprise IT. The vast majority of MySQL's revenue comes from Web companies like Facebook, Google, etc.
MySQL and Oracle don't really compete. They live in two very different markets.
So, if anything, Oracle's acquisition of Sun helps it leverage MySQL into a market--the growing Web database market--that its own technology is ill-equipped to manage. It also gets a lower-cost product with which to bludgeon its real enemy, Microsoft, coupled with a greater footprint in the rising open-source developer community.
Open source is not the enemy in this deal. Microsoft is.
The EU, however, has made itself an enemy to Oracle, Sun, and MySQL by holding up the merger, a situation that will only get worse due to its glacial pace, as CIO.co.uk's editor Martin Veitch suggests. Customers are not the beneficiaries of its intervention: Sun's server competitors like IBM are.
Though the EU purports to be in tune with open source, its meddlesome muddling reveals a surprising ignorance of open source, and shows a complete disregard for MySQL's true market opportunity.
UPDATE @ 6:59 Pacific on 9/4/09: I solicited comment from Gartner vice president and Distinguished Analyst, Donald Feinberg, who had this to say:
The EU does not understand open source. This is clear by using DBMS (MySQL) to extend the deadline. It also is clear that this is an attempt to use MySQL as a cover-up to a political agenda. It is protectionism at its worst.
The EU is entering deep water here, water that it clearly does not adequately understand.
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What is the value of an open-source asset? Over the past several years, and most recently with SpringSource, we've seen a number of open-source companies acquired at valuations of 10x or better. Did the buyers get their money's worth?
It's a tricky question to answer--and likely depends upon far more data than I have at my disposal. It also depends on the acquiring company executing, which has not been the case with Yahoo (which bought Zimbra) or Sun Microsystems (which bought MySQL). No open-source company can offer a panacea for an acquiring company's failure to execute.
But after talking with a range of the companies involved, it would appear that the answer is "yes"--open-source acquisitions are paying good dividends.
Consider:
- JBoss, bought by Red Hat for $350 million at a valuation 15 times sales (i.e., a 15x valuation), has gone on to grow twice as fast as Red Hat's core Linux business and is the key to its ability to sell strategic value to CIOs, rather than simply commodity Linux servers.
- XenSource, inarguably the richest acquisition at 166x, was doubling its customer count every quarter at the time Citrix bought it for $500 million. This would be less significant except that the company had already pulled in 1,000 customers. Compounding that number...? That sort of growth is hard to hard and continues to feed Citrix today. XenSource's valuation was overly rich but then, it was bought on the heels of VMware's explosive IPO. Some valuation hubris was to be expected.
- Zimbra, which Yahoo paid $350 million to acquire, has largely been buried in the belly of a company that has yet to figure out what it wants to do when it grows up (and out of Google's shadow). Even so, the company, which was doing north of $20 million at the time of acquisition, continues to grow quarter after quarter. Yahoo may not know what to do with Zimbra, but Zimbra's customers apparently do: buy more.
- And then there's MySQL. Ironically, Sun's $1 billion acquisition of MySQL, which was ridiculed as dramatically rich in valuation, has the lowest multiple of the lot, given that MySQL recorded sales of over $90 million the year it was acquired. Despite Sun's myriad problems over the past year, MySQL is growing, recording some of its best quarters ever.
Open-source assets, then, are growth assets. And their growth appears to be hard to check, even in cases of significant mismanagement. Perhaps this is the nature of open source: the company behind it may falter, but ultimately, the success of the project is only a download away, provided that the development community remains vibrant (and, in each of the examples above, it has).
Zimbra's paid user growth increases in lock-step with downloads
(Credit: Zimbra)So long as development continues, so will downloads. If downloads continue, there really should be no reason that a company can't benefit from it. It may derive substantial or anemic benefits, but it should benefit.
Looking around, it's hard to find a company that, on balance, isn't happy with its open-source investments. If open source didn't work, we'd expect to see companies exit, but in addition to the companies mentioned above, Oracle (Sleepycat), IBM (Gluecode), Cisco (Jabber), and others have increasingly bought into open source, and none shows any signs of abating its interest in increasing its open-source activities.
One might think that buying an open-source asset, rich in adoption but relatively light in monetization, would be a poor investment. Based on the data I've seen, however, this supposition is wrong.
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Though our bodies get older, our minds remain relatively young. Sure, we're scarred and matured by experiences, but our bodies age much faster than our minds. It turns out that companies are much the same.
Take Oracle, for example. We sometimes give Oracle grief for being the quintessentially Machiavellian company, with a hard-driving sales culture and bent on nefarious designs to lock in customers, but the company was founded under very different principles.
Oracle made its fortune promoting the SQL standard which, despite its problems, freed the world from mainframe lock-in, as Alfresco CEO John Powell, an early Oracle employee, reminded me recently. (Disclosure: John is my boss.)
Prior to Oracle, if you wanted to write database technologies, your choices were IBM's IMS, Cullinet's IDMS, or other proprietary solutions that were locked to specific mainframe hardware and the application was locked to the data.
Oracle (and IBM) opened up the market with SQL-based relational databases, thereby allowing independence between data and their associated applications. Oracle's message was "freedom of customers from mainframe lock-in." Starting with the VAX, Oracle gave customers freedom to negotiate between different mini-computer hardware suppliers.
Oracle was, in other words, the open-source vendor of its day, delivering customer choice.
Oracle has since become a massive corporation, and attracts all the suspicion that success often breeds. But perhaps its soul (early employees) is still young and concerned with openness, even if its body (the infrastructure) may not be.
It's especially intriguing for me to watch one of Oracle's longest-serving employees, Ken Jacobs (Employee number 18), take on increased responsibilities within Oracle's open source-related businesses. Jacobs has been involved with InnoDB, Oracle's first foray into MySQL, and it's likely that he'll play a big role in managing the company's MySQL business, too.
This may well be the perfect fit for Jacobs: he grew up touting Oracle as a freedom fighter. Now he gets to do it again, at a time when the industry sees Oracle very differently than when Jacobs started at Oracle over two decades ago.
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