Only trust a flamboyant braggart
By patrickf on Jan 21, 2008
Make sure you don't miss the insight of industry insider John Dvorak's coverage of the Sun-MySQL deal. He isn't falling for the clueless mainstream line that this deal actually makes any sense for the parties involved. Uh-uh.
So what if
"Sun has busted right into the vibrant gut of the Linux market by grabbing the M. Red Hat can sit on the box. Sun will go ahead and own your data layer though, thank you very much."
So what if
"In addition, Sun gets the attention of thousands of developers, including many of those P[Perl, php, Python] folks."
"This deal stinks from top to bottom", explains Mr Dvorak. "I'm close to being convinced that Oracle wanted to buy MySQL to kill the product, but knew that it couldn't pull off the stunt itself. It would be too obvious, especially to European Union regulators. So it sent in a stooge to do the job."
This isn't any old embarrassing pile of speculation hastily cobbled together by a self-promoting hack who needs a contrary opinion to maintain his profile. Mr Dvorak's track record on explaining the ins-and-outs of Silicon Valley is second to none. What's the secret being Google's great success?
"Working both harder and smarter...That's all there is to it; the rest is smoke and mirrors."
Ah, but if it's really so simple, how come no one else is doing what Google is doing? Mr Dvorak saw that one coming:
"Right now, nobody wants to do that." Now you know.
So, why is the deal taking place at all? Regular Dvorak readers will know all about that: it's the Sarbanes-Oxley (SOX) Act. The high cost of regulation is forcing companies to remain private and therefore they become attractive acquisition targets. And the charming Mr Dvorak is the man to expose this fact for two reasons. He's brave and he's certainly not overpaid:
I'm not sure if the reticence to openly carp is because of [the executive class'] generally inflated salaries that would make them look like whining divas or if it is a simple lack of courage. Probably both.
Mr Dvorak's inescapable conclusion: if you want to eliminate deals that "stink", regulate less.
Any sceptics who still might think that this deal will work out well for Sun, for MySQL and for MySQL customers and MySQL users will have the last vestiges of doubt blown away by the knowledge that the price Sun paid for MySQL was especially unfair, being simultaneously too high:
"Sun cannot actually afford to spend a $1 billion on a company producing a mere $60 million in revenue and working outside its core competencies."
and too low:
"and there should have been a publicized bidding war resulting in a much higher price than $1 billion."
Any student of economics knows that pricing imperfections result from a lack of information. So, who's to blame? The diplomatic Mr Dvorak reluctantly points out,
"Part of this silence stems directly from the fact that MySQL is a Swedish company, and heaven forbid the Swedes announce their intentions or do anything that would appear flamboyant or be interpreted as (gasp) bragging! "
A traditional Swedish lack of flamboyance
Swedes don't brag, see. Although this may come as news to Norwegians and Danes who recently learned that Stockholm anointed itself "capital of Scandinavia". For all that, Mr Dvorak is correct. Swedes don't boast. So as a non-Swede living here, let me note, that Sweden has been rated as
the world's most democratic country; the best country for women (take that any way you want); performing the best on climate protection performance; the 3rd biggest exporter of music (and easily biggest per capita); the best at helping foreigners integrate; the world's leading nation brand; the world's biggest investor in R&D per capita. So, why no bragging? Well, perhaps because Sweden has the world's best behaved children.
Another piece of Mr Dvorak's that caught my eye was this one about media consolidation on the internet:
"The only papers or news organizations that can expect to survive will be those with lots of original content available only at their individual sites."
Well, with content this original, I'm sure we can expect to enjoy Mr Dvorak's writing on Marketwatch for a long time to come.
ps. the views expressed here are not necessarily those of my employer