What Red Hat's investment in EnterpriseDB means

The European Commission may be taking its time analyzing the competitive impact of Oracle's proposed acquisition of Sun/MySQL, but the industry can't afford to dither. On Tuesday, MySQL competitor EnterpriseDB announced that Red Hat joined its $19 million Series C funding round, which follows IBM's own investment in EnterpriseDB.

Is the software industry, once devoted to MySQL, preparing to shift allegiances to Postgres?

Probably not, but clouds are forming. On Monday, I talked with EnterpriseDB CEO Ed Boyajian, a former Red Hat executive, and he suggested several reasons for Red Hat's investment of "a significant amount of money" in the open-source database vendor, EnterpriseDB. As he told me:

This is a great step forward for our company and for Postgres. Red Hat has done heroic work bringing commercial open source to mainstream enterprise adoption. And it's making a difference: arguably billions of dollars of spend in operating system and middleware has gone back to customers. You want to talk about returning control to users? That's the real yardstick. That's real disruption.

For EnterpriseDB to have the trust and support of Red Hat as a partner and investor is a huge help to our company and I think it gives another strong indication to enterprise customers challenging their old spending habits, that there is more they can do.

It's important to note that Red Hat has been distributing Postgres for some time. It's in every copy of Red Hat Enterprise Linux and Fedora that Red Hat ships. As such, it's already in the hands of thousands of Red Hat customers and users, and is in heavy demand in some geographies, particularly Latin America. But until now Red Hat has not provided robust support for the database on par with its support for Linux and JBoss.

That's about to change.

The change is good for Red Hat customers, but this isn't the only area in which Red Hat has been seeking to expand its influence. Red Hat has been actively looking for opportunities to invest in a variety of open-source companies, most recently investing in JasperSoft.

Red Hat, once content to go its own way in the software industry, is increasingly concerned with ensuring the vitality of its peers. After all, if Red Hat remains the only sizable open-source vendor, that's an indication of the weakness of the model, not its strength.

Red Hat CEO Jim Whitehurst, however, nicely marries pragmatism with idealism, as suggested by his comments on EnterpriseDB's subscription model:"EnterpriseDB is also working to create customer value through a subscription support model. Clearly, this is a model we see as beneficial."

He's right, but it's interesting to hear him laud a model (i.e., a subscription to proprietary and open-source software, plus maintenance and support) from which he distanced Red Hat in Red Hat's Q1 earnings call. ("I certainly hope for and we certainly like to work with other open source companies out there. But those are fundamentally different business then what we're doing.")

He's right the second time (in the EnterpriseDB news release). They are not fundamentally different business models. I suspect his comments on the earnings call reflected an attempt to get out of an inaccurate and misleading question from the ever-entertaining Trip Chowdhry.

Regardless, Red Hat's investment in Postgres vendor EnterpriseDB suggests that it, along with IBM and others, is prepared to bolster alternatives to MySQL in its larger quest to provide real competition in the database industry.

To be fair, Red Hat's interest in Postgres and EnterpriseDB precedes the EU's intervention in Oracle's proposed acquisition of MySQL. The interest is understandable: Postgres is a great choice for a wide variety of database workloads. It's built for transactions and higher-end use cases, like the Oracle and IBM database workloads that it can replace (or augment).

EnterpriseDB plays into Red Hat's overarching strategy of commoditizing key infrastructure, as Whitehurst has noted. Given that the $20 billion database market is concentrated in just three vendors who control 85 percent of the market, databases are ripe for disruption, disruption that Red Hat can feed from a distance.

Red Hat's investment in EnterpriseDB says more about Red Hat's increasing awareness of its larger role in the open-source ecosystem than it does of any competition with MySQL. It's about time.

[Mike_McGrath]

> Red Hat, once content to go its own way in the software industry, is increasingly concerned with ensuring the vitality of its peers. After all, if Red Hat remains the only sizable open-source vendor, that's an indication of the weakness of the model, not its strength.

I'm sorry Alfresco's half-ass free software model hasn't proven as profitable as you'd like Matt, but you don't have to overcompensate in every article you write. In case your editors haven't figured it out by now you're the Rush Limbaugh of this group. Who cares though right? It generates clicks and ad revenue.

[scurryn]

Matt -- remember that Red Hat also had a Series C investment in MySQL as well:

http://www.mysql.com/news-and-events/generate-article.php?id=2006_10

[pentest]

zzzzz....

CNET and Alfresco hasn't fired you yet?

[mervadrian]

One other interesting dimension to this, Matt - EnterpriseDB is an Oracle-compatible play as well,. It supplied the Oracle comptibility in IBM's DB2 9.7. I interviewed three customers using the DB2 compatibility features at IBM's recent IoD conference, and an early adopter for my blog post about that release at http://bit.ly/13NmGp

So there could be some competitive maneuvering at play in all this as well, since Oracle competes with Red Hat in some interesting ways.