Digging into MySQL billing data from Sun

Some of you may have seen that Sun recently disclosed billing data by category (PDF), including a category named “MySQL/Infrastructure.” I suspect that the “Infrastructure” includes products such as NetBeans or Sun Java Application Server. In any case, I’d imagine that MySQL is the majority of the category billings (estimates of MySQL revenue were much less than $75MM/yr). Let’s jump into the numbers:

First off, billings = revenue. As Sun explains:

Billings represent the amount invoiced to customers for products and are subject to cancellation. Billings is not a GAAP financial measurement, and therefore is not an audited number. Billings differs from revenue in that billings are not adjusted for any reserves and are not subject to any of the conditions under GAAP that must be met before revenue is recognized. Accordingly, amounts billed may not lead to revenue and billings should not be viewed as equivalent to, or a substitute for, GAAP revenue.

I looked at the FY07, FY08, and Q109 ratio of billings to reported revenue. The results were 109 percent, 115 percent, and 109 percent, respectively. Based on these results, I’d take 10 percent off the billing data when trying to think about category-specific revenue. In any case, here is the data from Sun by quarter:

A couple of things jump out.

First, the 50 percent billing growth in Q109 for MySQL/Infrastructure is amazing. Well done! The figure is impacted by a -17 percent growth in Q108, which is the basis for the Q109 comparison. Note, MySQL was an independent company during Q108. The billings decline should not indicate anything about Sun’s performance. Had the category grown at 10 percent in Q108, a reasonable estimate for the software market, Q108 billings would have been $33 million vs. $25 million. Then, the Q109 billings would have only grown 12 percent.

Second, the -20 percent growth in Q308 is likely due to customers putting a hold on deals while the Sun acquisition went through. Sun’s Q308 ended in March 30, 2008, and the MySQL acquisition was announced on January 16, 2008.

Third, a 5 percent year-to-year increase (from FY07 to FY08) in billings for the category seems weak. But remember that Q308 billings were likely impacted by the Sun acquisition announcement. If the category billing had grown 10 percent in Q308, versus a 20 percent decline, then FY08 billing would have been $223 million, not $208 million. Hence, the overall category billings increase would have been 13 percent, not 5 percent. Much more respectable.

It’s great that Sun is making this level of data available. Let’s see how the MySQL/Infrastructure category billings grow over the rest of the year!

p.s.: I should state: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies, or opinions.”