Posted on 05/25/2006 10:11:05 PM PDT by nickcarraway
Some think MySQL could be the next acquisition target as open source spreads.
As the world of software consolidates and open-source programs become more popular, some observers think MySQL is the company most likely to be acquired by a software giant.
Cupertino, California-based MySQL is a provider of open-source database software that is becoming a cheap and viable alternative to proprietary software companies like IBM and Oracle.
Because MySQL’s code base is open-sourced—meaning acquired through a community of developers worldwide—it does not require expensive license fees like proprietary software.
Speaking at the Red Herring Spring Conference in Monterey, California, on Thursday, a panel of industry experts recognized MySQL as a potential target in the industry consolidation.
“I think MySQL is very natural because they have grown to a certain size, certain profitability, and have a certain proof point on the market segment,” said Winston Damarillo, chief executive of Simula Labs, a venture fund in Marina Del Rey, California, that is dedicated to open-source investments.
“It’s fairly natural for a big database company or a second-tier player who wants to expand in the market, and companies like MySQL are good targets for that,” said Mr. Damarillo.
The VC was the founder of Gluecode, an open-source application server software provider that was sold to IBM last year for less than $100 million (see Gluecode Sticks to Big Blue).
MySQL CEO Marten Mickos said recently his company was in talks with Oracle earlier this year but couldn’t reach a deal.
When asked about Mr. Damarillo’s prediction, Mr. Mickos played down the idea. “It’s great to be seen as an attractive company, but we are focused on serving our customers and building a huge, profitable business,” he said in an email.
One panelist, Larry Augustine, an investor and adviser to open-source companies such as SugarCRM, Zend, and Pentaho, said MySQL was more likely to go public.
As consolidation widens, panelists predicted only a few open-source companies can remain independent because customers won’t want to deal with several vendors. Red Hat was one company panelists said would survive the consolidation phase.
The other companies that will remain are open-source application providers such as SugarCRM, maker of customer relationship management software, and Pentaho, which makes business intelligence software, panelists said.
“Red Hat is primarily in operating system and middleware and it’s difficult for companies like that [to provide applications] because they start competing with partners,” Mr. Augustine said. “I think we are likely to see the applications guys being separate businesses.”
Does Oracle Need Linux?
Panelists suggested Oracle could integrate Linux with its own products but only to simplify what it’s already offering. Oracle CEO Larry Ellison sent ripples around the industry last month when he said in an interview that he wanted to acquire Linux technology (see Oracle OS Talk Shakes Industry).
“Oracle needs to be in the Linux business like they need a hole in the head. But what they need to do is simplify the function of their software,” said Billy Marshall, chief executive of software appliance company rPath. “I don’t believe Oracle should ever consider Linux as a pure play because over time I don’t believe you need more than one or two of those.”
Jeffrey Jaffe, CTO of open source company Novell—another company Mr. Ellison said he had considered acquiring—said Oracle shouldn’t acquire its own Linux capability just for the sake of it.
“If there is something new they want to bring to the table and help the industry integrate everything [that’s fine],” he said. “But if it’s going to be a me-too, what’s the point?”
ping
Is Red Herring still around? I thought they stopped publishing.
Red Herring ceased publishing in 2003, but later that year started back up as a web site, and has been publishing a weekly print edition since January 2005.
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