Yes, that's "billion", with a 'B'! I'm sure the valuation negotiations considered the media impact and attention of a nice round number. They succeeded. Already the punditocracy is a-twitter, with lots of ink being spilt and keyboards being worn out about how this should prove (once and for all) that open source business models are viable or even superior to other ways of running a software company.
This industry observer begs to differ. MySQL didn't succeed just because it was an open source business. They succeeded because they mastered how to deliver customer value, and brilliantly executed a strategy that is tried-and-true in the software business: brand, platform, and meeting customer needs. Open source was a means to an end, not an end unto itself.
Let's look more closely at their keys to success:
Platform. MySQL correctly read the rapid emergence of Web 2.0 based applications and websites, and customers' de facto use of a new technology stack (LAMP). They successfully positioned themselves as the centerpiece of this new technology. How open source helped: By making it easier for developers to get their hands on the product and start developing, and fostering developer loyalty. But this couldn't succeed without...
Brand. MySQL invested heavily in marketing its brand, trumpeting customer success stories as well as the strength of its product features. By aggressively positioning as the de facto database for Web 2.0 based apps, this drove those developers to adopt MySQL's product instead of others, when they otherwise may have been ambivalent regarding choice of database. But this branding effort couldn't succeed without...
Product meeting customer requirements. MySQL didn't try to be an all-things-to-all-people database. They focused on the Web 2.0 market, and built a product that met this market's data storage, security, management, performance and other requirements. How open source helped: Open source enabled more product innovation outside the company, which helped improve the product. But let's not discount the discipline of an excellent product management and engineering leadership team that laser-focused on its target market. Of course, this was also helped by focusing on a technology platform that could be leveraged and built upon.
In short, they executed the "building a business based on customer value" playbook extremely well, with a multi-pronged mutually-reinforcing strategy of brand, platform and product excellence.
The lesson is that companies that listen to its customers, and execute a strategy based on customer value, will succeed. Those that resort to ideology ("we're better just because we're open source") will not. Open source should support the strategy, not the other way around. I know Marten (he sits on my employer's advisory board) and he's as pragmatic and customer focused as they get. This pragmatism and customer focus will continue to separate the winners from the losers.
Now, after dominating the LAMP based market, I would suggest the next stage of the MySQL business unit's growth would require thinking about interoperability with other technology stacks, and this is where the OSA can help...
