Sun buys open source MySQL for $1 billion

Sun Microsystems Inc.has agreed to buy software company MySQL AB for $1 billion, a move that is expected to bolster their position with database technology and make them more competitive with Oracle Corporation: As reported in the San Francisco Chronicle:

The MySQL deal lets Sun – the third-largest maker of server computers – enter the $15 billion market for database software, challenging Oracle Corp. and adding a source of service revenue. Closely held MySQL develops databases and lets customers such as Google Inc. and the Chicago Mercantile Exchange use them for free, making money from maintenance.

Sun is bolstering its software unit to offer more programs that businesses need to build Web-based systems, Chief Executive Officer Jonathan Schwartz said. Schwartz, who became CEO in April 2006, restored Sun to profit after five years of losses by cutting jobs and adding products.

“MySQL gives Sun a flagship product, the most popular open-source database technology,” said Raven Zachary, an analyst with research firm 451 Group in Portland, Ore. The purchase “offers a model for Sun to follow as it tries to sell other open-source software products