Sun’s software results — a mixed bag

Sun reported very healthy revenue growth for its software category in Q209. Chart 6 in this deck suggests that software billings grew at 21 percent. To non-accountants, revenue = billings. In Q209, ∼$1 billed = ∼$0.9 revenue. Read the notes on chart 6 for more details if you’re interested.

Diving further into the billing data, we find that Q209 software billings were driven by strength in Sun’s Java licensing and MySQL/Infrastructure business lines, growing 47 percent and 55 percent to $67M and $81M, respectively.

The growth in Java licensing seems to be an anomaly compared with the historical rates. Typically, this category grew at less than 10 percent with three-quarters of growth between 10 percent and 20 percent over the past 9 quarters, and no quarter over 21 percent growth until now. Clearly, this is a result of Sun’s work to monetize the Java runtime install base. It remains to be seen if this level of growth can continue each quarter.

MySQL growth is solid, although it too is down from a 111 percent year-to-year (YTY) growth in Q109; but really, who’s complaining about a 55 percent YTY growth in billings?!? MySQL definitely seems to be finding its groove inside of Sun.

And finally, the troubled child, “Solaris, Management, and Virtualization.” The category declined 29 percent YTY to $42M, after a 14 percent YTY decline in the previous quarter (Q109). What gives? Is Solaris the key driver behind this decline? It would make sense compared with the ∼$125 percent declines in systems quarterly billings.

Overall, the software category is at 21 percent versus 27 percent YTY in Q209 versus Q109. A slight quarter-to-quarter decline, but completely understandable in this economic environment! Keep up the momentum, guys and gals.

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