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Making Money From Free Software: Sun Buys MySQL For $1 Billion

Today, Sun Microsystems announced its intention to buy MySQL AB, makers of the open source MySQL relational database system, paying $800m in cash & $200m in share options. This is a huge amount of cash for a product which is primarily given away for free.

Over 100 million copies of MySQL have been downloaded or distributed throughout its history, and it is used as the back end database system for a vast number of web sites, including huge throughput sites like Facebook and Google. We here at Altogether use MySQL heavily for our development and hosting activities. It’s fast, it’s stable, it’s well supported and maintained, and of course, it’s free.

The web forums are alight with people reacting to this news; forecasting the end of MySQL being nigh and finding it hard to understand how Sun are to recoup their investment, as this comment from The Register illustrates.

How is a company that gives everything away for free worth $1bn? The only way to make money is from support. That will come as a shock to some people who haven’t dealt with the ‘free software’ lot before.

The bigger picture is the key thing here however, and when you are throwing around a billion dollars from your war chest, you are clearly not planning to earn that back from mere support fees.

The most insightful comment on the purchase I’ve seen is this from a user at the social bookmarking site Reddit

Their rival, Oracle, started their own Linux knockoff, to be able to claim to enterprise customers that they offer a complete solution of a database, an operating system, an application server, enterprise productivity applications, CRM and ERP.

These accounts don’t just buy one thing from a vendor, they buy as much from one vendor as possible, with top tier support.

Now Sun can credibly claim that they offer a more complete end-to-end solution, including server hardware, high performance networking equipment, desktop clients (Sun Ray) and even branded monitors. On the software side they have their own strong operating system, open sourced, their own language, most widely used for business applications and open sourced, a credible top-tier application server (Glassfish) and MQ, now a credible database, open source, and so on.

With this kind of a package, they can argue that the most important competitive advantage isn’t the completeness of the solution, but the health, openness and diversity of the user and development communities.

With a bigger picture view like this, the purchase makes a lot more sense. Personally I see the acquisition of MySQL AB by Sun as being a beneficial thing, both for them and for users of the database like ourselves. Sun have demonstrated their commitment to Open Source with projects such as Open Solaris, Open Office and Java to name but a few, and I believe the backing Sun can provide should be a positive influence on the future development of this key product in the digital space.

Header image: bbjee & flickr

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