By Martin LaMonica, 16 January 2008 16:08
NEWS
Sun Microsystems are to pay $1bn for MySQL, the maker of a popular open-source database.
Sun said it will pay about $800m in cash for MySQL's privately held stock and will assume about $200m worth of options. MySQL CEO Marten Mickos will join Sun's senior executive team after the transaction closes.
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The acquisition is a bold move for Sun, which has embraced open-source software and development practices in an effort to garner more revenue from its software business. Until now, it has sold support services for a competing open-source database, PostgreSQL.
MySQL is one of the most successful open-source companies founded in the past five years. It's part of the popular combination of open-source development products referred to as Lamp, for Linux Apache Web server, MySQL and the PHP development language, which is broadly used on the internet and within companies.
Mickos had previously said the company intends to go public rather than be acquired. Its business model is to give away the source code and its database for free and to charge customers an ongoing subscription fee for support and services.
Sun CEO Jonathan Schwartz said Sun will begin offering support services to customers of MySQL before the deal closes later this year.
He called the deal the most important acquisition in the history of Sun.
Schwartz also outlined a number of areas of technical integration designed to optimise MySQL's flagship database - as well as MySQL's Falcon storage engine - on Sun's Solaris operating systems and servers.
He said that Sun can provide the sort of support services large corporations demand.
Schwartz said MySQL is a "part of every web company's infrastructure, to be sure. And though many of the more traditional companies use MySQL - from auto companies to financial institutions to banks and retailers - many have been waiting for a Fortune 500 vendor willing to step up, to provide mission critical global support".
The size of the acquisition, at $1bn, reflects the indelible mark that the open-source business model - in which companies give away source code and charge for services or high-end products - has left on the software business.
JBoss, another successful open-source software company, was acquired for more than $400m by Red Hat in 2006. And last year, Citrix paid $500m for XenSource, a virtualisation software provider.
MySQL has about 400 employees. Investors include Benchmark Capital, Index Ventures, IVP, Intel, SAP and Red Hat.
The deal is expected to close near the tail of Sun's fiscal third quarter, which ends in late March, or early in its fourth quarter.
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