Reinstalled system on ubuntu 16.04 and when first trying to run python manage.py makemigrations got the following error:
django.db.utils.OperationalError: (1193, "Unknown system variable 'storage_engine'")
My django databases settings are:
DATABASES = {
    'default': {
        'ENGINE': 'django.db.backends.mysql',
        'NAME': 'license_portal',
        'USER': '****',
        'PASSWORD': '****',
        'HOST': '127.0.0.1',
        'PORT': '3306',
        'OPTIONS': {
            "init_command": "SET storage_engine=MyISAM",
        },
    },
}
Libraries:
(mmslic) ➜  mmsLicenseServer git:(master) ✗ pip freeze              
Django==1.8.12
django-admin-bootstrapped==2.5.7
django-bootstrap3==7.0.1
MySQL-python==1.2.5
mysqlclient==1.3.7
requests==2.9.1
(mmslic) ➜  mmsLicenseServer git:(master) ✗ dpkg -l | grep -i mysql            
ii  libmysqlclient-dev                            5.7.12-0ubuntu1                                     amd64        MySQL database development files
ii  libmysqlclient20:amd64                        5.7.12-0ubuntu1                                     amd64        MySQL database client library
ii  libmysqlclient20:i386                         5.7.12-0ubuntu1                                     i386         MySQL database client library
ii  libqt4-sql-mysql:i386                         4:4.8.7+dfsg-5ubuntu2                               i386         Qt 4 MySQL database driver
ii  mysql-client-5.7                              5.7.12-0ubuntu1                                     amd64        MySQL database client binaries
ii  mysql-client-core-5.7                         5.7.12-0ubuntu1                                     amd64        MySQL database core client binaries
ii  mysql-common                                  5.7.12-0ubuntu1                                     all          MySQL database common files, e.g. /etc/mysql/my.cnf
ii  mysql-server                                  5.7.12-0ubuntu1                                     all          MySQL database server (metapackage depending on the latest version)
ii  mysql-server-5.7                              5.7.12-0ubuntu1                                     amd64        MySQL database server binaries and system database setup
ii  mysql-server-core-5.7                         5.7.12-0ubuntu1  
                After struggling with this issue I've found that the problem was a change on MySQL 5.7 version.
With MySQL 5.7 the command SET storage_engine=MyISAM won't work, so that was the problem!
As spotted on the MySQL 5.7 documentation use default_storage_engine instead!  My configuration became:
DATABASES = {
    'default': {
        'ENGINE': 'django.db.backends.mysql',
        'NAME': 'license_portal',
        'USER': '****',
        'PASSWORD': '****',
        'HOST': '127.0.0.1',
        'PORT': '3306',
        'OPTIONS': {
            "init_command": "SET default_storage_engine=MyISAM",
        },
    },
}
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