VC Perspectives

Although IBM in many ways looked like a more likely candidate, it now seems like Oracle instead will acquire SUN. Some questions immediately spring to mind:

• Why did SUN reject the IBM offer?
• What’s in it for Oracle?
• What will happen to MySQL?

As for the first question, I don’t think it was valuation. IBM offer is believed to have been around $6.85-7 billion and Oracle’s bid is supposed to be around $7.4 billion (or $5.6 billion net of Sun’s cash and debt). More important was probably the fear of SUN that the deal wouldn’t go through, because lack of commitment from IBM for example in case the deal would be subject to an antitrust review. More views on this question from Bloomberg.

As for the second question, Oracle is officially mentioning control of Java and Solaris as the main reasons, but I think there are a few more. The acquisition will help Oracle to really take on IBM as it can start offering integrated hardware and software solutions. Through the indirect takeover of MySQL, it also enables them to remove an important competitor while taking an even more powerful stab at IBM in the database market. Henrik Torstensson has posted a link to a good analysis by GigaOM of the acquisition.

As for what perhaps is the question closest to our Nordic hearts, Monty Widenius co-founder of MySQL offers some thoughts on his blog Monty Says. Knowing what problems SUN have had in integrating MySQL (and still SUN is a much more open source friendly and savvy company than Oracle), my feeling is that Oracle have a gigantic task at hand making the MySQL integration successful and I woudn’t be surprised if we will see many more MySQL employees leaving the company sooner rather than later. Maybe an opportunity for other open source companies to pick up some very talented people…

Finally made it. Having waited for 5 hours at Arlanda airport I arrived at the hotel at 3am so I was pretty tired when I finally showed up at the Slush 2008 event. But it was definitely worth it.

The set-up was a mix of short presentations and panel debates with some of Finland’s most successful entrepreneurs, Risto Siilasmaa (F-Secure), Monty Widenius (MySQL), Ilkaa Paananen (Sumea), Petteri Koponen (Firsthop & Jaiku), Sampo Karjalainen (Sulake), and Asmo Halinen (Apaja). The panel debates were moderated by Matt Marshall from VentureBeat.

Personally, I think the major contribution of the speakers was the fact that these successful entrepreneurs engaged and showed interest in an event for up and coming entrepreneurs. I believe that it is extremely important with role models and having the chance to talk and listen to people that have built great companies.

There were also some very useful pieces of advice and sharing of experiences from the speakers, for example in terms of how to handle the current financial situation, the importance of focus (something I will come back to in another blog entry), and what it’s like being acquired by a large international company.

Perhaps the most interesting example was one of failure rather than success when Asmo told us the story of Apaja’s launch of a virtual world to complement their successful avatar and gaming focus. By not listening to what their users wanted, they ended up spending 1.5 years building and eventually dismantling a virtual world which too few people were interested in. And for a start-up, that’s a pretty significant misuse of resoruces knowing that there are so many other things that needs to be carried out.

Another interesting story was told by Sampo from Sulake (Habbo Hotel) and how the whole thing emerged as a project build for their own pleasure and then virally spreading to more and more people. But the important lesson was that the founders never lost touch of either their own love for the product or making sure that they truly understand why and how their users actually use the product. I think many companies can learn from the likes of Sulake, being almost obsessed with understanding user behavior.

The day also provided great opportunity for networking with a nice location and ample space to meet people (since everyone needed to pass by the bar to reach the auditorium). So all in all, a great event and hopefully one which will be held again next year (and hopefully I can stay on for the party next time around).