First off, kudos to Sun for valuing MySQL at this price. The deal represents ~36% of Sun’s Cash & Cash Equivalents (of $2.7B) on hand at the end of their last quarter (Sept. 2007). But considering how cheap debt is these days, Sun could probably fund a portion of the deal through cheap debt.

A reader commented on BEA and MySQL being founded in the same year, but BEA being sold for 8x more than MySQL. True, but BEA has ~$1.5B in revenue versus ~$60M for MySQL. When you take revenue into account, MySQL secured 3x more in acquisition price for every dollar of revenue than did BEA. OSS vendors must be sleeping with dollar signs in their eyes tonight….

Alex Fletcher has a few thoughts on the deal. I found this one most interesting:

“MySQL should help to stimulate the relevance of Sun’s tooling and Enterprise Application Infrastructure. Look no further than Oracle for an example of leveraging market share in the database market to cross-sell middleware.”

Ahh, if only that were true Alex ;-) Oracle has had a really strong position in the DB market for decades, but next to no position in middleware market outside of DBs, (since DBs are a part of the middleware market). This all changed when Oracle got serious about applications. Also, let’s not forget that customers only buy into cross-sell situations if the product being cross-sold is something the customer would have considered. So, I don’t think you can compare Oracle’s strategy/results with Sun’s prospects.

Prediction of why Sun bought MySQL: Look up in the sky, it’s a bird, it’s a plane, no, it’s a MySQL db on a Sun cloud. (This idea comes from Cote).

The fact that Amazon has been so successful with EC2/S3 should be keeping Sun (and IBM) execs up at night. The Cloud computing opportunity is Sun and IBM’s to lose. By acquiring MySQL, Sun gets access to arguably the database of choice for cloud deployments. I’ll be watching with interest to see if Sun invests in MySQL capabilities that are optimized for cloud/virtualized environments.

Thoughts?