Red Hat/Cygnus record run lost amid Sun/MySQL billion-dollar hoopla
Eight-plus years is an eternity in the technology industry, yet that is how long it has taken for Sun's recent billion-dollar acquisition of MySQL to supplant Red Hat's $675 million purchase of Cygnus back in 1999 as the most valuable deal in open source annals.
Context & Ripple Effects
Sun's $1 billion purchase of MySQL has unseated Red Hat's $675 million acquisition of Cygnus in 1999 — a record that had stood for more than eight years — as the largest deal in open source history. The pickup was broad enough that even Linux-Watch ran the story framed as a question about whether open source and capitalism can co-exist, signaling that the debate had moved past the deal itself.
The timing lands on a Red Hat just entering a transition: former Delta Air Lines COO James Whitehurst took over as CEO on New Year's Day 2008, meaning the company whose valuation benchmark just fell is doing so under new leadership. For Sun, the MySQL buy extends an open-source-heavy repositioning that already includes the xVM virtualization platform built on Xen and the retirement of the SUNW brand in favor of JAVA.
First-order effects
- Sun now owns the most valuable asset ever acquired in open source, adding a database franchise with enormous web deployment to a stack already spanning Solaris, xVM virtualization, and Java-branded software.
- Red Hat loses its long-held distinction as the site of open source's biggest deal (InfoWorld's earlier read on Sun & MySQL) just weeks into the Whitehurst era, putting pressure on the new CEO to articulate how a $675 million-era company competes against billion-dollar consolidation.
Second-order effects
- Every venture-backed open source vendor's asking price effectively resets upward, since acquirers now have a billion-dollar comparable where the prior ceiling was $675 million — inviting more suitors toward database, middleware, and infrastructure specialists.
- Rival distributors and hardware vendors face a Sun that can bundle MySQL alongside its OS and virtualization layers, forcing responses on pricing and packaging across the LAMP-adjacent ecosystem.
Third-order effects
- If the pattern holds, open source stops being valued as a cost-saving licensing model and becomes an acquisition asset class in its own right — with specialist absorption risk rising for independent vendors whose communities may not follow their code into a corporate parent.
- The record-deal cadence points toward open source M&A migrating up-market: once a $1 billion deal is the benchmark rather than the outlier, subsequent deals are priced against consolidation logic rather than community goodwill.
The trend: Open source companies are being repriced as strategic acquisition targets, with each landmark deal raising the ceiling for what corporate buyers will pay for community-built infrastructure.