MySQL – What History Tells Us About Oracle Buying Sun; Also, How Red Hat/JBoss Acquisition Raised Licensing Fees by 400%
The open source pundits are out in full force trying to anticipate what Oracle's acquisition of Sun means for MySQL. It's a fun exercise to try to predict the future — which may be why there’s no consensus. Here are some of the quotes that we found interesting.
- Larry Dignan, ZDNET: "Oracle gets to kill MySQL. There’s no way Ellison will let that open source database mess with the margins of his database. MySQL at best will wither from neglect. In any case, MySQL is MyToast."
- Larry Augustin, long time open source investor and entrepreneur, suggested on his Twitter feed "Oracle probably keeps some of the storage software assets while selling the hardware parts to EMC, Hitachi or HP. Win-win."
- Marten Mikos, former MySQL chief told Forbes: "Larry Ellison is smart. MySQL was getting around 70,000 downloads a day when I left. It's an amazing grip on young developers. Having MySQL makes business sense for Oracle."
We agree with Larry and Marten – we don't think the MySQL community would let MySQL die even if Oracle wanted to kill it. Open source communities are resilient and have the ability to be self-repairing. There are plenty of people in the developer and user community who want the MySQL technology to continue to grow and evolve. If Oracle either neglected MySQL or actively tried to kill it, the community could and likely would fork the project and continue on. So, we don't think MySQL will die.
But we also think there is a valid concern that Oracle will raise the support costs of MySQL. There are a couple of reasons we think this is likely:
1. History
After Red Hat acquired JBoss, we started to get JBoss customers coming to us when their RedHat/JBoss subscriptions came up for renewal. They were reporting increases in subscription prices from RedHat/JBoss — by as much as 400%. We expect that trend to continue with Oracle's acquisition of Sun.
2. Business Models
Oracle has a typical high-cost enterprise software business model. They spend a lot of money to acquire and retain customers. And they expect and get high margins for their maintenance business. Successful open source companies need to learn how to operate with much lower expenses — in order to provide subscriptions and support to customers at much lower costs. As MySQL begins to be offered through the Oracle sales force and channels, Oracle's enterprise sales model will impact costs of selling MySQL and will likely result in higher prices for MySQL support from Oracle.
In addition, there will be pressure to avoid cannibalization of revenue on the Oracle database, which will drive Oracle to reduce the price differential between Oracle DB and MySQL.
The promise of open source companies lies in their ability to offer significantly lower cost support and solutions to customers. To deliver on this promise, a different mentality is required.
First, open source companies must foster open communities. To gain the cost savings and quality benefits that come with open source, you need communities that extend beyond the walls of one company. Only then can you break free of the high development costs that come with traditional proprietary software.
Second, open source companies must foster low cost sales models. Typical software sales approaches are simply too expensive when you are trying to deliver software at a fraction of the cost.
It's highly doubtful that Oracle will be able to change their mentality and their approach — so the result will unfortunately be higher pricing from Oracle on MySQL support and subscriptions.
Luckily, one of the other benefits of open source is that customers have choice. They are not locked-in to one vendor for support.
As InfoWorld's Savio Rodrigues reported in February, one of the leading reasons that almost 100 medium-sized and Fortune 500 companies come to OpenLogic is for our low-cost MySQL, JBoss, and Tomcat support.
For cost-effective consolidated support providers such as OpenLogic, we expect this acquisition to drive more customers to compare prices on open source support and bump our sales, just as the RedHat/JBoss acquisition did a few years ago.
1 Responses »
