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JUNE 4, 2003
A Baby Database's Chance to Grow Up? MySQL, maker of the popular but lightweight open-source software, has a big new ally in SAP, which sees an opportunity to push its own interests At first glance, Marten Mickos would hardly seem a revolutionary. The gentle Scandinavian has a square, friendly face and soft diction. But as the CEO of MySQL, a Swedish open-source database software upstart, Mickos carries a big stick. He claims 4 million MySQL installations worldwide and 30,000 downloads of the software per day. That makes MySQL by far the planet's most widely distributed open-source database. Mickos also says his 70-person company has 4,000 paying customers around the world who ante up (at rock-bottom rates) to buy MySQL support and licenses. To date, though, MySQL has been viewed mainly as a cheap database for running Web sites and as relatively unsophisticated compared to the whiz-bang wares of the database Big Three, Oracle (ORCL ), IBM (IBM ) and Microsoft (MSFT ). Further, MySQL was never seen as an apple-cart tipper on the order of Linux. But Mickos and his minions served notice to the database sector on May 27 when MySQL announced an alliance with German software giant SAP (SAP ). Then on June 3, MySQL announced a $19.5 million venture-capital financing round including marquee Silicon Valley VC firm Benchmark Capital. Combined, the two developments could give MySQL much needed momentum. SAP, which racked up $7.4 billion in 2002 revenues and net income of $597 million, is the top dog in complex business software. It claims that as of April, 2003, it controlled about 54% of that market, up from 50% at the end of 2002 and well ahead of rivals Oracle, Siebel Systems (SEBL ), PeopleSoft (PSFT ), and J.D. Edwards (JDEC ) (the latter two have announced a merger deal in which PeopleSoft will pay $1.7 billion in stock to acquire Edwards). So the SAP deal gives Mickos the blessing of one of the most dominant companies in enterprise software, much the way IBM gave Linux a seal of approval that more than anything else helped the Penguin people crack the corporate operating system market. PAYING TWICE. And the new financing should give MySQL the cash to upgrade its database with new features to take on Oracle, Microsoft, and IBM -- at least in less sophisticated installations. If the story of Linux's rise from humble hobbyist project to powerful corporate system is prologue, then this spring could mark the start of MySQL's inexorable ascent. The shadow play here is SAP's long-held desire to commoditize databases. Most of SAP's customers now install Oracle, IBM, or Microsoft databases as the underpinnings necessary to run SAP's business software. That means SAP customers have to pay extra for a database license, often thousands of dollars per server. Compare that to annual support costs ranging from $1,500 to $48,000 for MySQL and free downloads of the software if customers want it. (They can also buy a proprietary version of MySQL that's revisable for less than $300 per server and gain the ability to make software enhancements without being required to share them in the open-source tradition.) The current setup of separate database and enterprise software is an additional barrier to SAP's sales. It also means it has less control over its customers. That's precisely why SAP has long offered its own SAP DB product, which is more sophisticated than MySQL but still lags behind Oracle, IBM, and Microsoft in terms of features. Three years ago, in hopes of catching the open-source wave, SAP even tried revealing its database's source code. But that didn't spark many new sales nor did it attract a community of interested open-source developers.
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