Mysql Case Study Essays

Mysql Case Study Essays Mysql Case Study Essay Mysql Case Study Essay MySQL 1. What was the business model of MySQL? Orignal Business model Originally, MySQL collected one time licensing revenues from original equipment manufacturers (OEM) businesses. These were businesses that redistributed MySQL embedded into their own products as in a standalone application. This was based on the dual license model for open source database. In the dual license model, software is available both under a General public license (GPL) , usually for non commercial end users, and under a commercial license for non GPL’ed redistribution. Example: As an example, MySQL firm makes MySQL available under the GPL at no charge, but sells it under other more traditional licenses to clients who do not find the GPL to be ideal for their purposes, such as inclusion of MySQL AB technology in a closed source product. A disadvantage of this model was that it did not generate significant revenues from end users. Hence inspite of a huge 33% market share, MySQL revenue share was l ess than 1% MySQL Network – New business model In early 2005, MySQL network was introduced. It is a subscription service that provides updates, alerts, notifications, knowledge base and production level support, that makes it possible for companies to easily manage hundreds or thousands of MySQL servers. This business model was growth focused and aimed at increasing revenues much higher than from OEM businesses. However, it lead to increased customer expectations as they were being charged for the first time. 2. What challenges they faced to remain sustainable? Low revenue business model: MySQL needed to find a healthy ratio between paying and nonpaying customers. It had low revenues inspite of a 33% market share. This was equivalent to trading off a larger community against faster sales growth which was imperative to support the increased investments in infrastructure new recruits. Competitors’ strategies: IBM, Microsoft Oracle had each lowered their database prices and created low end bundles aimed at smaller organizations and partners. In October 2005, Oracle released a free yet proprietary low-end version of its acclaimed database. Microsoft had already offered a zero-price product for a long time, Sysbase, since 2004. Oracle had acquired the two main transactional engines that MySQL could have used, namely Innobase and its replacement Sleepycat. In a way it gave Oracle some control as a partner with MySQL. Increasing competition: New open source database startups such as db4o leveraged open source community for development, marketing and sales and hence enjoyed an extremely low cost structure. This enabled them to expand their customer base in enterprise domain. Some closed source databases became open source. Eg: Cloudscape from IBM. This further increased the competition. 3. What is the current status of MySQL? MySQL status in 2006: Though it had 8 million active installations and 50,000 downloads per day, only 1 in 1000 productive installations ended up as paid MySQL customer. In April 2006, Oracle renewed the contract between InnoBase and MySQL in a multi year agreement, effectively becoming a MySQL partner. Mickos sees growth opportunities and plans to raise sales upto $ 100 million and to go public by 2008. Oracle clearly recognizes MySQL as its competitor though battle lines are a bit blurry in MySQL camp. CEO Mickos looks at Oracle as too big to be considered as a competitor while EVP of Sales, Burton, sees them as competitor only in select markets like Large Enterprise category. MySQL status in 2009: Sun Microsystems bought over MySQL in Jan 2008 and in April 2009, Oracle announced its plans for overtaking Sun. The deal was ratified in Aug 2009. In essence, MySQL is now owned by Oracle.