MariaDB plc: Shareholders speak, but execs are quiet

Posted by Richy George on 22 May, 2024

This post was originally published on this site

There appears to be many questions and few answers about MariaDB plc’s long-term strategy following an announcement that its shareholders have accepted an offer by California-based investment firm K1 Investment Management.

News that the company that provides database and SaaS services around the open-source database MariaDB had been acquired came on Monday, when it was announced that a trio of companies—K1; Meridian Bidco LLC, a K1 affiliate; and K5 Capital Advisors—“now have irrevocable shareholder support in respect of 68.51% of MariaDB shares.”

The company has had a litany of financial issues over the past 12 months, but when it released financial results for the quarter ended March 31 last week there was one bright spot: Its net loss had shrunk to $3.5 million, compared to a net Loss of $11.9 million a year earlier.

“We have demonstrated our ability to quickly turn our financial story around and are optimistic about the future performance of the business,” Paul O’Brien, CEO of MariaDB plc said in a statement accompanying the financial results.

As reported in InfoWorld in February, after going public in December 2022, the company saw its market capitalization plummet from $445 million to around $10 million by the end of 2023.

Carl Olofson, research vice president and database analyst with IDC, said that the key to determining what happens next is why the acquisition happened in the first place.

While executives at K1 and MariaDB plc have yet to comment on their future plans, Olofson said that “when you see something like this, there is one of two motivations. One is that you want to dismantle the company, and make a profit from the assets, which is not going to be the case here, because they do not really have assets.

“The other option is to really believe that with proper management, the right approach, the company can grow far beyond where it’s at now—make fabulous profits, sell it off and everybody walks away happy.”

In the open source database space, he said, there is a big difference when it comes to intellectual property (IP) between MariaDB and MySQL, the open-source database of which MariaDB is a fork. In the case of MySQL, the IP is owned by Oracle, but for MariaDB “it is owned by the MariaDB community, which is not part of the company. There is a clear distinction between MariaDB, the company, and MariaDB, the community.”

Olofson added that regardless of what happens to the corporate entity, the community will continue.

The open source project was created by Michael “Monty” Widenius, who was also a creator of MySQL. He set up the company Monty Program Ab which later became MariaDB, the company, and also the MariaDB Foundation, which is the custodian of the project’s open-source code.

Olofson spoke with Widenius briefly last year at a MariaDB user conference and described him as an “open source purist” who wants to “just put technology out there and let people do what they will with it.” But while that attitude might be great for users, it’s not good for MariaDB, the company: “That does not really help it in trying to survive commercially and meet payroll,” Olofson said.

As for the commercial side, while Olofson has no idea what K1’s corporate strategy might be moving forward, he said one option is to “go down the well-worn path of other open source software companies that are trying to make a living from the technology by what’s called an open core approach.”

That was already MariaDB’s strategy—it offers paid add-ons such as MaxScale, ColumnStore, or Galera Cluster, as well as consulting, migration and managed cloud services—“but they basically just ran out of money,” said Olofson.

“They were adding some really exciting and innovative features ,” he said, “and then they pulled back from some of that. I interpreted that as meaning they did not have the money to continue to support development.”

InfoWorld reached out to both MariaDB plc and K1 for comment, but at press time had not heard from either organization.