MySQL Hits $50 Million Revenue, Plans IPO

An anonymous coward writes "MySQL, purveyor of the open-source database of the same name, is on the road to becoming a publicly traded company, bolstered by $50 million in revenue in 2006. "It's still in the pipeline," Chief Executive Marten Mickos said of the plan to hold an initial public offering of his company's stock. He declined to discuss when the company planned to go public, but said, "We're making good progress, doing all the things we need to get done.""

Check into this stock. This is not a pump-and-dump

The NYSE symbol is MyDIK. You can pump and dump this stock all you want. It has more uptime than MySQL.

interesting timing for an IPO

I wonder if Google is planning to leverage MySQL in a proxy warfare type scenario vs. M$.

The contention between the two giants has been heating up, and MySQL is steadily gaining ground on SQL Server for marketshare.

Couple that with Google's recent contributions to the MySQL project and statements by one of thier engineer's (Callahan?) that they would continue to enhance the DB & pump the code back into the community... focusing on stability, recovery, and fine tuning code.

Looks like Google could be contending with M$ on at least three fronts soon counting search, office, & now DB's through MySQL.

I want to see them rumble. The timing of this IPO is very interesting.

Regards.

Re:interesting timing for an IPO

Thanks everyone for the comments! Let me first note that there was no specific news item in the article referred to at the top. We have had plans for IPO for several years. We don't see an IPO as an end-goal, but as a natural step in the evolution and growth of MySQL.
 
As many of you will know, when a company brings in venture capital (VC) as we did 6 years ago, you essentially set a plan to either be acquired or go public (IPO) after some time. We think that MySQL is a great business and one that can and should be independent and do an IPO at some point.
 
We share a passion for open source business - i.e. a passion to demonstrate what great businesses you can build on open source. And we want to provide the best database developers with great rewards: the good feeling of producing a product that changes the world, and the financial reward that comes with business success.
 
We have numerous users and customers ask us about buying MySQL stock. Today we are privately held and there are no shares for sale, but once we go public anyone can buy shares in our company. And being a public company we will have more strength to grow, to hire more great developers, and to serve new customers.
 
Does this make sense to you? It does to us.
 
Marten Mickos, CEO, MySQL AB

Re:

How will you deal with the the business aspects that come into play when a company goes public that we geeks fear; things like being bought out by "more evil" companies?

Re:interesting timing for an IPO

Here is my quick view of risks with going public, and how we are dealing with them:

Risk of being bought out. - The best protection against this is fast growth. If a company doesn't grow, then it is at risk of being bought no matter whether it is private or public, large or small. (So if you want to contribute to us - then refer us to as many paying customers as you can!)

Risk of company culture becoming too corporate-like. - We try to avoid this by being very focused on cultivating our unique values. We add more structure and more procedures all the time, but we also try to stay free from bureaucracy and we always encourage our employees to make bold decisions.

Risk of openness being at risk as a public company. - We make sure that all our investors (current and future) understand that the freedom of our software is vital to the success of MySQL. We also try to be open about everything else: bugs, plans, events, etc. But here we also know there will be something of a difference when going public: we will have to abide strictly by SEC rules and not disclose financial or other vital business information in any other way than publicly to everyone at given points in time.

Feel free to list more risks and I will be happy to address them.

Marten

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On the comments about timing ... ah, it seems that companies want to go public when the market is going up... Rarely does a company want to go public right after a crash. Financial events often coincide because people make decisions based on financial stim

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It seems like a good amount of concern about gong public revolves around shifting control.

Are there any business practices that you guys avoid that might be more difficult to avoid after going public?

Egregious VaporWare (or at least totally premature) anno

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As a public company you will have to answer to the typical pump and dump investor that typically buys publicly traded stock. These people favor moves that yield increased stock price over long term strategies that result in both a stronger company and a st

Re:interesting timing for an IPO

For part of your questions, see my response to another question on this thread:
http://slashdot.org/comments.pl?sid=232285&thresho ld=0&commentsort=0&mode=thread&pid=18880831#188809 27 [slashdot.org]

And here comes more risk analysis:

Risk of "pump and dump" investors driving MySQL strategy in the wrong direction. - Naturally a company will have to follow the instructions from its shareholders, but we believe that we have and will have strong and long-term investors who understand the value of strategic resilience. These investors will encourage us to invest in what gives the best value over time.

Risk of quick return to investors negatively affecting the MySQL entity or application. - I actually believe the opposite - that a successful IPO for MySQL will give us a boost in innovation and development. I believe that as a public company MySQL would attract even more innovative partners and brilliant employees.

Marten

P.S. I can of course be wrong in my risk assessments here and in other responses on this thread. That's why I post them for all of you to read - in the hope that you will provide your feedback and suggestions.

Re:interesting timing for an IPO

Thank you for responding. The fact that you are engaging in an open communication with the community like this is probably a greater comfort than the actual answers you give. That said, I have always been good at poking holes in debates.

'Risk of being bought out. - The best protection against this is fast growth. If a company doesn't grow, then it is at risk of being bought no matter whether it is private or public, large or small. (So if you want to contribute to us - then refer us to as many paying customers as you can!)'

That certainly makes sense. Is there any assurance that such growth will occur? Is there more to this move than a spin of the roulette wheel coupled with a great deal of optimism about the outcome?

Oracle already knows they want to purchase MySQL. Is there any way to protect the company if they move to make that purchase right away without giving the company a chance to grow?

'Risk of company culture becoming too corporate-like. - We try to avoid this by being very focused on cultivating our unique values. We add more structure and more procedures all the time, but we also try to stay free from bureaucracy and we always encourage our employees to make bold decisions.'

I can't really poke a hole in that. But would like to remind you; Google had a 'do no evil' policy as well. That policy and greed battled within the company and in the end, greed won.

'Risk of openness being at risk as a public company. - We make sure that all our investors (current and future) understand that the freedom of our software is vital to the success of MySQL. We also try to be open about everything else: bugs, plans, events, etc. But here we also know there will be something of a difference when going public: we will have to abide strictly by SEC rules and not disclose financial or other vital business information in any other way than publicly to everyone at given points in time.'

Do you mean to suggest that bug reports and other things that concern the community will only be released in SEC filings? Surely not, companies release information that concerns their business through the press and other outlets all the time.

'Risk of "pump and dump" investors driving MySQL strategy in the wrong direction. - Naturally a company will have to follow the instructions from its shareholders, but we believe that we have and will have strong and long-term investors who understand the value of strategic resilience. These investors will encourage us to invest in what gives the best value over time.'

Isn't this nothing but pure optimism? Anyone can purchase the stock. Are MySQL public stockholders likely to share the same characteristics as the stockholders of most companies?

'Risk of quick return to investors negatively affecting the MySQL entity or application. - I actually believe the opposite - that a successful IPO for MySQL will give us a boost in innovation and development. I believe that as a public company MySQL would attract even more innovative partners and brilliant employees.'

Don't many of those investors play key roles in MySQL today? Isn't there a good chance that many of those individuals will use this as an opportunity to cash in? Also, increased financial resources does not equate to superior results. Microsoft is probably the most typical example of this.

'P.S. I can of course be wrong in my risk assessments here and in other responses on this thread. That's why I post them for all of you to read - in the hope that you will provide your feedback and suggestions.'

Good luck Mark. I'm sure having you at the helm of the company gives everyone comfort, I know it gives me comfort. I wish you and MySQL the best and hope going public works out for you.

Re:

How do you view the risk of Oracle buying you out? It seems that they bought InnoDB to fight the growth of MySQL since it takes MySQL one step closer to enterprise level DB. With the IPO, they could just buy you guys outright and put an end to a large pa

Re:interesting timing for an IPO

1. Get taken over by Oracle
2. Profit
3. Fork MySQL
4. ???
5. Profit (again)

Sounds good to me

Re:

Why would anybody want to IPO?

In practice it does two things:

1. Temporarily boost financial resources.
2. Lose all control over your own company.

The financial boost is nice, but rarely necessary and I assume most people care about the company they built and

Re:interesting timing for an IPO

I must say I disagree with your analysis of IPO. But let's first back up. It was in 2001 that the founders of MySQL decided to get venture capital on board and to go for business growth and an IPO or an acquisition in the future. I don't know if you were around back then, but that would have been the right time to ask why the founders wanted an IPO.

Then to your analysis. I believe that an IPO has the opportunity to boost your financial resources for a very long time. I also believe that you don't have to lose control over your company. Control is lost (in my mind) if and when a company stops to grow - no matter whether the company is public or private. Even if you own all of a private company - if it does not grow then you don't have too many options as to how to run it. So although you may not have lost control to another shareholder, you have essentially lost control to the circumstances.

And then there are other benefits of IPO. It gives you a currency for making acqusitions. It gives you exposure and typically add to your credibility among conservative customers. And it can be highly inspirational for the employees.

Make sense?

Marten

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Isn't the problem with growth, that eventually you will reach a ceiling, unless you are able to drive out competitors, in which case you become a monopoly ?

Re:

Thank you for assuming that we will reach that level!

Seriously, sure that can be an issue, but getting there takes 20-30 years in the software industry. In the meantime the world will evolve and there will be some new entrepreneur with a revolution

Re:

Control is lost (in my mind) if and when a company stops to grow - no matter whether the company is public or private.

Then you're either using a different definition of 'control' to everyone else, or you're waffling.

Even if you own all of a private compan

Oh no...

Mickos said. "And by going public you get the currency to do acquisitions."

I don't like that. I like MySQL for what it is. Not what is can do with cash or depending on stockholders approval...

Re:Oh no...

Maybe if they were a public company with some cash they would have been be the ones to buy InnoDB, instead of Oracle.

Re:

This makes me all jittery too. I have very little trust of public companies. I think the laws surrounding them are in need of even more serious reform than they've gotten so far (SOX and HIPPA being examples of laws that bring back some accountability).

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Hate to break it to you, but MySQL is already run by stockholders... just because it isn't _publically_ traded doesn't mean their aren't owners who control have an equity stake. Those owners had the same interest in enhancing the company's revenues as purc

Re:Oh no...

There's something about the diffusion of responsbility involved in a company being public that tends to cause such companies to become inordinately rapacious and evil. All the decision makers can point to the fact that they're 'morally' obligated to do whatever it takes for the company to make as much as it can for stockholders. And the stockholders have a really hard time getting together to tell the company that some actions are just too far.

But when the number of stockholders is smaller and known, their sense of personal responsibility and morality can be appealed to, and they're more likely to pay attention to it regardless.

Re:

There's a world of difference. In a private company, the stock isn't publicly tradeable. This single fact is enough to strongly deter pump-and-dump and other forms of short-term thinking.

worrying

This worries me. I don't think the street's interests match up with open source communities or the private companies that make a living off of them. The street likes bold moves for short term gains. OSS demands slow(usually) organic growth and consensus building. A MySQL controlled by arms-length investors might throw an error, how will Mickos catch?

This http://www.codinghorror.com/blog/archives/000842.h tml [codinghorror.com] comes to mind.

If they offer a second class of shares(dividends but no voice) then maybe it will work, but I'm not sure there's a point in it.

Re:worrying

That's the beauty of free software. If MySQL goes bad the codebase will be forked and another project will rise to take its place. It will be interesting to see what the MySQL prospectus will have to say to investors about this risk.

Good luck to MySQL. I hope they make a go of it, get rich, and don't shoot themselves in the foot by causing a code fork.

Re:worrying

Red Hat stock [yahoo.com] seems to be doing ok...

Pump and Dump Scheme

This is not a dig at the folks at Mysql.

It is a warning to everyone who thinks that mysql will be immediately better for going public.

In my finance class I learned that the best way to grow a company is on revenues. Second best is private equity. Near the bottom of the list is public equity.

It's probably the case that Mysql's early investors are looking for their pay day. That's fine, but I'm more concerned about the long term effect of being a public company on the quality of mysql product.

The clever slashdotter with a little cash to gamble with should buy some mysql hold it for a year and dump it. They should come out ahead and be getting out while the picture looks rosy.

Food for thought.

Re:

Revenues are fine, but they are sort of dictated to you-- you make as much profit as you can. Private equity is great, if you can find it. For young businesses, you just go to your cousin or friend or somebody and ask them if they want to own half the comp

Re:

The clever slashdotter with a little cash to gamble with should buy some mysql hold it for a year and dump it.

Yeah hold onto it until Larry Ellison buys it which, let's face it won't be long!

So... When will Oracle or Microsoft buy them out?

I mean seriously, remember how much Oracle is being a dick when they bought PeopleSoft? And now MySQL with "only" $50 million in revenue is going IPO?

I mean hell, remember this [com.com]? A private firm can turn down an offer, but a full public company has to go to its shareholders.

Its not about the software, its just that MySQL is a nice company that worked hard to get where it is. I just don't want to see it get destroyed because they just needed a bit more capital.

Re:So... When will Oracle or Microsoft buy them ou

A private firm can turn down an offer, but a full public company has to go to its shareholders.

An IPO doesn't need to mean the existing core loses control: Google demonstrated that quite well I think.

Re:So... When will Oracle or Microsoft buy them ou

"A private firm can turn down an offer, but a full public company has to go to its shareholders."

A private firm must go to its shareholders as well.

Re:So... When will Oracle or Microsoft buy them ou

"only" is right. $50 million in revenue is not a lot in the software industry.

Of Geese and Golden eggs...

MySQL is today what it is and where it is, because of the quality and utility of the code it's putting out in the database world. People who invest in MySQL, the product do so because of it's suitability and superiority; not because of the financial reputation or stability of the company itself.

By going in for an IPO, Mr.Marten Mickos may be right in that the company will be flush with funds, but then, people will be able to invest in MySQL, the company -- without caring for MySQL, the product or service or technology. Even companies like RedHat making over a billion dollars a year face enormous challenges everyday, in staying loyal to their philosophies and the customers; and avoiding takeovers by unprincipled thugs of all hues in the share markets.

If Mr. Mickos thinks the company is going to get more business because it will now be a public firm, I think that optimism is misplaced and will be short-lived. That new business is going to come from MySQL's reputation of being a public company, not based on the technological superiority or suitability about the product. Should MySQL indeed care for such customers, given that the current mindshare and marketshate has come from the Open Source loving community?

No one can prevent a firm from having an IPO, but I would be very surprised if MySQL can resist a takeover for even 12 months from the IPO. What that would do to employee morale which Mr. Mickos talks about, remains to be seen.

Re:

Should MySQL indeed care for such customers, given that the current mindshare and marketshate has come from the Open Source loving community?

Let me guess...You'd probably be offended if in response to this, somebody accused you of Communist inclinations, w

Re:

Let me see if I understand...

That new business is going to come from MySQL's reputation of being a public company, not based on the technological superiority or suitability about the product. Should MySQL indeed care for such customers, given that the curr

Re:Capitalists = Evil

They're the happy medium. They give away their product for free, but if you want the extras (support) you gotta pay. I'm happy with that, as I'm sure most people are.

Programmers gotta pay the rent you know..

Re:Capitalists = Evil

Hell, even if they sell the software I'm happy if they give me the source. Open source != free.

Re:

To clear up any confusion created by the parent comment:
Free != Free

Re:Capitalists = Evil

Concur wholeheartedly. We're not in a utopia; OSS has to pay the bandwidth bills somehow. If all there was was OSS, then we couldn't get by on the good graces of companies since people wouldn't be paying for code, thus coders wouldn't be able to pay to host the servers or the bandwidth for that code.

Plus, if they're making money through support, that means there are people, and more importantly companies, willing to put their faith in OSS. That's major, really.

Re:Capitalists = Evil

'If all there was was OSS,'

No. If nobody was being paid to code or profiting from open source software that would be true. Selling closed source software is not the only way to profit from software. IBM hosts OSS, codes OSS, and makes a boatload of cash on OSS. The same is true of many companies. Most programmers work on in-house applications, the idea that companies like Microsoft are where programmers get their bread is a myth.

More open source software means more companies have a greater potential to make money since they have the source code to make applications run in a way that is tailored to them. That opportunity existing means that more companies would take advantage of it and that my friend means more jobs for programmers.

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More open source software means more companies have a greater potential to make money since they have the source code to make applications run in a way that is tailored to them. That opportunity existing means that more companies would take advantage of it

Re:

Making money is fine, but they are taking advantage of the fact that people think it's more "free" than it really is. A typical example would be someone starting a new company, deciding to use MySQL "beacuse it's free, everybody knows that!". When they've

Re:

No you have it wrong.

The problem is when a company becomes publically traded they begine to ignore everything the founders and management set up to create that success. They start to become ran by the accountants and only serve the shareholders.

Piss off o

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why would it? Mysql was written by mysql, with no input by fsf. It would be nice if they helped, but I don't think they have much of an obligation to. It would be more fitting if they maid payments to the other organizations in the LAMP stack ie whatever c

Re:Where is the profit going?

Unbelievable. Absolutely unbelievable. I never hear anything but condemnation and the most vitriolic forms of abuse around here for anyone who would *dare* to even dream of the idea of trying to make money from software development, (including an earlier post on this very article) and yet one of the first questions I see here is whether with MySQL's IPO, the FSF are getting a cut of the cheese.

Let me get this straight. It is by no means, in any way, EVER acceptable in your minds if anyone makes money from developing software, but just in case anybody does, they must immediately hand it over to Stallman?!?

The rank hypocrisy exhibited by you people at times literally leaves me gasping. It is beyond description.

Re:So much for them.

I call B-S. Shifting to a public company means they have to meet the quarter by quarter growth demanded by Wall Street. I've watched small companies with similar revenues get destroyed by this. It also means if they float too much stock, they're fair game for acquisition. Call this a liquidity event to repay early investors, nothing more.

Re:

Going public does mean that a company's boss is no longer a person, it is a board of directors. An original founder running the show can give a company it's soul and he can force the company to put the customer's best interests ahead of profits. A board

Re:

Yes, and that's why literate techies with some money (like most of us reading here) will want to buy as much stock as possible to have a better representation of our views on the company's strategy.

If you care, like really care, about Open Source companie

Re:

It's times like these when I wish I had mod points, to sink this kind of rubbish into oblivion where it belongs.

Be gone, troll.