Sunday, May 4, 2008

Surprising loss for Sun shows the heavy costs of MySQL

Surprising loss for Sun shows the heavy costs of MySQL

Despite his company racking up a $34 million loss this last quarter due entirely to its $1 billion buyout of MySQL, Sun CEO Jonathan Schwartz voiced optimism yesterday that its ownership of the open source database will start paying off.

During a fiscal third quarter that cost Sun's stockholders four cents per share, Sun closed the acquisitions of both MySQL and Innotek, maker of desktop virtualization products used mainly by crossplatform software developers.

"As we had expected, the overall impact of [the MySQL acquisition] on our Q3 income statement was a decrease of approximately $30 million to $35 million of net income or approximately $0.04 per share," Schwartz told analysts during this week's third quarter financial call.

"In Q4, the impact of MySQL is currently estimated to be in the same overall range as in Q3. This will reflect a near-term full quarter impact of the standalone business and ongoing amortization."

But Schwartz also promised a strong future commitment to MySQL as a key part of an overall open source platform that also includes OpenSolaris -- the open source alternative to Sun's traditional proprietary Solaris OS -- and Sun's new Open Storage Platform.

"With MySQL in particular, we found enormous receptivity to the technology and value proposition from among a broad spectrum of our customers who are already signing Sun Services agreements," he contended.

The CEO pointed to Sun customers for MySQL "ranging from Web 2.0 startups to large enterprises," specifically naming Thomson Reuters, Glasses Direct, Newforma and TimeLogic.

Also during the call, the CEO said that offering an open source OS is giving Sun a competitive edge against other large OEMs.

Meanwhile, though, some observers have suggested that presently, MySQL is most attractive to newer companies without entrenched database infrastructures, and that Sun will need to pour considerable R&D into evolving MySQL into a product will lure away existing customers of Oracle, IBM DB2, and Microsoft SQL Server.


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