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Sun bets $1 billion on an open-source future

From the Associated Press

Sun Microsystems Inc.'s deal to buy open-source software company MySQL for $1 billion deepens Sun’s bet that its road to prosperity lies in distributing free software that generates hefty maintenance fees and could sell more servers.

The acquisition, announced before U.S. markets opened Wednesday, gives Santa Clara, Calif.-based Sun a foothold in the rapidly expanding market for database software for Web-based companies.

MySQL’s software is used by some of the world’s biggest websites to archive and retrieve information, and with people creating more Web content every day, demand for those services is growing quickly.

Sun is paying $800 million in cash and assuming $200 million in options to acquire privately held MySQL. The Swedish company makes open-source database software used by companies such as Google Inc., Facebook Inc. and cellphone maker Nokia Corp.

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Sun said the deal would help spread MySQL’s software to large corporations, which have been the biggest customers of Sun’s servers and software, and boost its distribution through Sun’s relationships with other server makers such as IBM Corp. and Dell Inc.

Sun believes that it can sell more server computers and ring up higher maintenance fees by also offering software whose source code is available free.

MySQL is the market leader in open-source database software, particularly among Web-based companies, where it commands about 80% of the global market, Sun Chief Executive Jonathan Schwartz said.

Sun shares rose 55 cents, or more than 3%, to $15.53.

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