MySQL Dolphins in a Strategic Blue Ocean
By stern on Jan 23, 2008
Otherwise, my take on the Sun-mySQL deal starts with an article in the Harvard Business Review by W. Chan Kim and Renee Mauborgne. Their proposed blue ocean strategic model looks for previously non-consumptive or non-existent markets. The corresponding premise is that "red ocean" markets are those already in existence, with each player growing as a function of overall market growth and through taking market share from others. The blue ocean strategy focuses on finding new, non-consumptive markets based on the relative value of product or service features demanded by consumers in those markets. The disruptions come from combining the most valued features in non-intuitive ways to create a new market. Bagged lettuce combines the produce aisle and the convenience of the prepared foods aisle in the supermarket; nobody knew it would be a billion dollar business. One of my favorites (indicated by waistline) is Pret-A-Manger, the UK based sandwich shop that combines the speed of ordering lunch in a fast food outlet with the fresh ingredients and healthier eating choices of a local deli. The name itself is a play on pret-a-porter, the notion of high-end clothing (or food) ready to consume without the time intervention of a tailor or the guy slicing turkey one sandwich at a time.
Blue ocean strategies overlap in two ways with the digital world. First, open source software is a key entry point to non-consumptive markets. The best way to get someone who has never used your software to try it, evaluate it, or take an interest is to remove all barriers to entry. The analysts (and occasional) customers who ask me "How will Sun make money by giving things away?" miss the fact that "giving things away" is a blue ocean strategy that expands markets, while "making money" is a red ocean tactic to compete and take share in those newly entered fields of play. The second dip of the network endpoint in the blue ocean is the use of blue ocean strategic thinking to define new, small markets and identify the attributes that drive consumers to value them. It's Chris Anderson's Long Tail as seen by an MBA, not a web site developer.
Now I'll put those mySQL dolphins in the blue ocean.
I'll argue that mySQL -- and open source databases in general -- form a blue ocean of opportunity. Put another way, customers who want Oracle, Sybase or DB2 are looking for vertically scaled, commercial software that tyipcally has a suite of packaged commercial applications on top of it. Very red ocean, coming from a guy who has seen his share of Jersey shore red tides. Anyone who would buy Oracle (or others) probably wasn't looking at mySQL in the first place. Conversely, mySQL customers probably didn't consider Oracle or DB2; they wanted a free database with a different (not better, not easier, not fewer, but different) set of prioritized features. The purest definition of a blue ocean. They are willing to do more work on availability at the application or monitoring level and use shards to scale horizontally. Different features with different priorities: blue ocean there.
[Sidebar: if you look at the database market in terms of red and blue oceans, it makes Dvorak's diatribe on the situation amusing in both its simplicity and disconnection from actual business strategy. Then again, Dvorak claimed that Motorola was poised for cell phone dominance just 9 months ago, and today's news kind of throws water on that theory too.]
I've read a number of other theories and comments on this deal that seem to ignore the actual physics of the open source, middleware and database software markets:
It's anti-(company) or meant to disrupt (company). Actually, it's a new market for us. Doesn't change, dismiss, disrupt, or interfere with any of our other database partners. Most of them have application and web servers, too, while we have the open source Glassfish project, and the world hasn't ended. On the other hand, Sun has had a database group for at least 15 years, and when you put some really creative database people on these types of problems, well, maybe Solaris and our systems and storage products get better for all databases.
mySQL has a small revenue stream and its customers are small businesses. True, my personal sports blog is written in WordPress, and therefore I am a mySQL customer (indirectly, through the company that hosts my blog), but Google, Facebook and a host of other brand names use mySQL too. See previous comment about companies that want free database software and wil invest in the upper layers of the stack. See also "non consumptive markets".
Sun doesn't do acquisitions well. The X64 products based on the Kealia intellectual property, our market-leading identity management suite build on top of Waveset, the corresponding professional services practice that grew out of Neogent, and the ever-expanding OpenOffice.org community say "bzzt, but thanks for playing the home version of our game."
Sun will make mySQL proprietary. Theoretical computer scientists love trapdoor functions, that is, a function that only goes one way and can't be reverse engineered even if you know the full range of inputs and associated outputs. Open sourcing a project is a true trapdoor function: once the code is released, attempts to make it "proprietary" amount to trying to reverse engineer the trapdoor. The bits don't go in that direction. And I'll add that optimizing code or adding features don't count as making something proprietary. Again, bad behavior generates vitriol and and reversion; the code gets edited out by the community while the comments get piled on. This week's example involving Apple and Dtrace has a comment thread that runs from the DMCA to correctness of performance data.
Bottom line: the mySQL deal is pretty exciting. Normally, I reserve the redline of excitement for Really Big Things like the NFL Giants in the Super Bowl (check), Princeton ice hockey riding the ECAC (check), or my youth hockey team in the playoffs (check). This deal has the same sense of huge opportunity for all involved.