When MySQL files for IPO, we’ll get to view their financials. We’ll get to compare their performance metrics against Red Hat (which, until now, has been the only pure-play OSS player with public financials) and traditional vendors. I’m willing to bet that their metrics will be (surprisingly) close to metrics from traditional software vendors.
BTW, in case we’re keeping score, yes, Oracle is already distributing MySQL with their Linux distro. But, Oracle isn’t providing support for the copy of MySQL that you get with Oracle’s Linux distro. Here’s my take on the Oracle support rumor (which could just have been a passing threat in an Oracle/MySQL meeting).
Unbreakable Support for MySQL is likely the first step towards an acquisition:
There’s really little long-term benefit from Oracle providing support to a competitor’s database. In doing so, you’re validating the competitor, and not really doing anything to “bury the competition”. With the Oracle Unbreakable Support for Linux, they’re going after a related market, and failure doesn’t have any direct competitive consequence. Sure failure means that Red Hat gets bigger, but that’s not a big deal (until/unless Red Hat acquires a leading open source database support provider). But failure with the MySQL support would result in a much stronger direct competitor (MySQL Co.).
The more likely option here is for Oracle to buy MySQL. After the acquisition, if Oracle tried to move the user base onto Oracle DB products, add restrictive support conditions, raise prices, etc. then an alternative support provider would have room to grow. Otherwise, MySQL customers would likely continue to get support for MySQL through Oracle. Oracle would need to consider the impact of the MySQL product set on the Oracle DB portfolio. Issues like, customer confusion, pricing, customer negotiation tactics, etc. However, I think Oracle could deal with these issues.
Worried about cannibalization? It’s going to happen to a certain degree, but the alternative is losing business to a competitor without a fight. Oracle can respond by giving customers choice. Cannibalization that occurs will be much, much, smaller than the potential revenue that Oracle can drive using a mixture of open source & traditional software. IBM took this approach with the WebSphere Application Server business (with great success) and Oracle could do the same with their database business.
The result would be two database platforms (MySQL & Oracle DB), which get closer over time, but likely don’t merge (at least for the next 5 years). Customers can choose (remember, choice is good) to use the light-weight MySQL product for a good portion of their needs, and the high-end Oracle DB products for other projects. Let’s not forget that the majority of Oracle DB customers will stick with Oracle DB for products that are already running today (i.e. “if it ain’t broke, don’t fix it”). And when these customers want to use something more light-weight, simpler to use, Oracle has an offering for them. Leave no customer behind!
After the acquisition, Oracle cold shift some of their development efforts away from Oracle DB (except in the high end product category) and put those resources into the Oracle Applications business which is where they want to grow revenue. MySQL products would deliver support stream revenue; very much in keeping with Oracle’s huge maintenance revenue.
Less focus on selling new Oracle DB licenses, and more on selling Oracle DB & MySQL (after acquisition) support would be a big win with Wall Street which looks for steady and continuous revenue. Forget the upfront license cost, and just pay for support & maintenance. Move some development resources to the higher-value offerings. Neutralize a competitor by providing customer choice (with something that a customer wants; not just a crappy offering under the guise of choice). It all sounds interesting. Let’s see how this plays out!
[The image is from flickr user net_efekt - it made me laugh and seemed to be a good way to represent the worry of cannibalization in the face of a serious competitor.]