Content Log

MySQL Acquisition and Enterprise Software

In a software industry that had little innovation and created obstacles for the next class of rising companies, open source is turning enterprise software on its head. Xen Source, Zimbra and JBoss are now part of larger companies acquiring new technologies and new distribution models by leveraging the power of open source. Now we see that MySQL has been acquired by Sun for $1 billion. Sun has been embracing open source more and more under Jonathan Schwartz's watch as CEO and this can be seen as a logical next step in that strategy.

Marten Mickos, a happy man and a really nice guy.

When we started Alfresco, we came in with the assumption that one of the only things that is working in enterprise software is open source. The past year or so have proven this prediction right. Although it wasn't really my prediction. A meeting with Marten Mickos, CEO of MySQL in 2002, helped me understand that, yes, open source really could work. Up to that point, I was of the same opinion as Bill Gates, that open source is equivalent to communism. MySQL helped me understand the power of huge numbers of people using software and the value that support can provide to fund the development of professional software. The fact that the model works means that small open source companies can thrive in an environment of behemoths consolidating stacks and actually create an environment of innovation.

David Axmark and Monty Widenius, founders of MySQL

When a category has been around long enough that customers know what they want, then open source works really well. MySQL provided a simple, cost-effective database system that meant that you didn't have to install a big, hulking Oracle, DB2 or SQL Server and more importantly, you didn't even have to pay for it. You just pay for support. JBoss did the same thing for app servers, Xen Source for virtualization systems and Zimbra for email. Some people question whether MySQL was really innovating, after all the set of SQL is the same as Oracle had in the early 90's. In reality, there wouldn't be a Web 2.0 or possibly even a Web 1.0 without MySQL. MySQL pioneered the model of Scale Out rather than Scale Up to provide web properties like Facebook, Google, Yahoo, etc. to scale to levels that were unthinkable in Oracle back in the 90s. JBoss, Xen and Zimbra were doing the same to their respective industries and bigger companies were willing to pay for that.

From our perspective at Alfresco, Sun is a great company to acquire MySQL. Sun has proven their alliance and cooperation with open source. And this doesn't change our plans to become a public company. We have created public companies in the past and we intend to in the future. Our sales of support and development of our community have exceeded our expectations and events like this make us even more determined that IPO can be successful for the development of the Alfresco system and the Alfresco community.

Congratulations to Marten and team and good luck in the future. We are looking forward to more successful collaborations and joint deployments of Alfresco and MySQL.

Financial Services are Bullish on Open Source

Zach Urlocker, Executive VP of Products at MySQL, blogged about how MySQL met Union Bank of California's scalability requirements with open source and now the bank is migrating from AIX to the LAMP stack. The top 25 bank's move is an indication that Financial Services are moving toward open source. When financial services are not afraid of open source and believe that it can meet their scale and security requirements, its not long before all other industries come to the same conclusion.

One of the main clusters of adoption that we are seeing with Alfresco is in Financial services. Four of the top 10 banks and two of the top 10 investment managers in the world are now using Alfresco. At least that we know of, since it is open source and who knows who else is using it. New financial forces like E*Trade are also using Alfresco. So is the American Stock Exchange. This is without even trying. There is only one bank that we targeted and I told them that it was my hobby to sell them. We don't sell, people just try it.

There are two factors that contribute toward this. Financial Services have always been natural early adopters. In general, banks and investment banks in particular attract aggressive risk takers. They like new things and they search for competitive advantage through experimentation. The second factor has to do with that advantage. With the cost of IT on average at 20% or more, reducing the cost of IT through open source eventually becomes a no brainer.

There is one other interesting factor for Alfresco in particular. ECM is a big deal due to the regulation of the industry, but it is expensive, even for a bank, to role out across the entire enterprise. There is a hole in the ECM market for financial services that can be filled with either Microsoft Sharepoint or Alfresco. The price factor is important in filling that hole. However, Sharepoint requires development in .NET, which banks are reluctant to swallow.

Alfresco, being a 100% Java application and open to whatever development platform you want, fits much  more neatly into the huge investment that  banks have made in IT. As one investment bank put it, "We have made a huge investment in our Service Oriented Architecture. Alfresco being built as a web services enabled ECM platform fits perfectly with our IT vision."