What do you know. [[Sun Microsystems]] agreed to fork over $1 billion to buy the private, VC-backed open source database company, [[MySQL]].

This says a lot for the value of open source, and the value of the open source business model – give away the software and make $ on the support, and premium features. Of course public markets have valued open source solution companies like Red Hat, (NYSE:RHT) is valued at $3.6 billion, and Novell (NASDAQ: NOVL) has been valued at $2.2 billion for some time. 

Will this mean good things for vendors of functionality in other open source projects, like, say IP PBX?

I don't think so. MySQL is a database product. Every website using a Content Management System (some are free and open source too) has a database, and MySQL is probably part of it. It's a cornerstone capability, right up there with Apache. Interestingly, the company was VC financed since July 2001 and its first release was for Solaris (the Sun OS).

Using a business model to drive revenues, even if contrary to the market expectation of how value ought to be created and monetized is proven, once again to be a valuable element of what makes a company valuable. Community, technology, leadership are the keys.

Now, do I expect a leading IP PBX player to jump on the open source wagon and scoop up an open source IP PBX company such as Digium for example? There are a couple of conditions that I'd expect to be central to the buyer's stragegy:

  • they need a stronger play in the SMB market which is where Digium fits very, very well.
  • they are open to the open source approach, which is the core technology leverage of the company. Mark Spencer, Digium founder and CTO wrote the original Asterisk IP PBX and initiated the project, forming Digium to specialize in the support and hardware packaging of appropriate components.
  • they have significant software skill.

These don't fit with most of the current crop of IP PBX players. Avaya needs help in the SMB, but would have to use this kind of acquisition to let Digium take over the whole SMB strategy (baggage, pain, complexity – yuck). Cisco is anti-open source. Nortel could be a solid fit, but is probably afraid of the open source model. The time isn't right. 

In Sun's case, the company has been on a journey of major proportions towards open source and enabling developer communities for some time. Sun today is not the company that first developed Java in the early 1990s. A database was, no doubt, an important feature set missing from their portfolio and this deal puts Sun on a trajectory with IBM, Oracle and Microsoft.

Now are Sun or Novell or IBM for that matter likely candidates? Hmmm. That's a thought.

Note: this site is hosted with a MySQL database.

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