May 8, 2000 6:20 PM PDT
Open source start-up to take on database market
As chief financial officer of media company Landmark Communications, Ritter watched his company miss out on a golden opportunity to invest in Linux software seller Red Hat way before its successful initial public offering. Now he hopes to catch the second wave of the open-source software trend.
Ritter is leaving his Landmark job to become chief executive officer of Great Bridge, a subsidiary that will try to do with the PostgreSQL database software what Red Hat did with Linux. Although Ritter declined to detail the company's business model, it will involve popularizing the database and then selling services and support for it. Later, the company is likely to expand to selling the database bundled with other open-source software.
Great Bridge, though consisting of only four employees today, has grand ambitions, including a planned expansion to 120 employees and the ultimate possibility of going public, Ritter said. But the biggest challenge will be taking on giants such as Oracle, IBM, Microsoft, Informix and Sybase, each of which have their own proprietary database programs.
"In the database world, there are some huge players. I don't think any of us feel like we've got some easy job ahead of us," Ritter acknowledged. But he's confident the software will prevail in the end.
Open-source software is developed collectively by volunteers who share the software's original programming instructions, as compared with proprietary software from companies that keep close guard over their code. Linux is the jewel of the open-source crown, but others include Sendmail email software, Tripwire security software and Apache Web server software.
Bruce Momjian, one of the core group of open-source programmers developing PostgreSQL, has mixed but overall positive emotions about seeing the software growing up.
"It's like marrying your daughter off. You're losing your daughter, but gaining a son-in-law," he said. "We don't really feel that person is really moving out of the house."
Great Bridge isn't alone in trying to make money by providing services for open-source companies. The success of Linux has prompted companies such as Sendmail and Covalent Technologies to build their own businesses.
Great Bridge's name itself reflects the company's grand thinking. The name, which stems from the decisive 1775 defeat of better-armed British troops by Americans in the Revolutionary War, symbolizes the overturning of the old order, a popular theme among open-source advocates.
The new company is trying to integrate smoothly with the open-source community responsible for the development of PostgreSQL, Ritter said--in particular the six people at the core of the project. "We don't want to take over the project. In our view, the real strength of open source is that the project is independent" of any one company, he said.
Momjian is sensitive to the perils of having a company moving in to try to make PostgreSQL into the core of a money-making operation, but overall he believes that Great Bridge will improve the software's prospects.
"There's no question that we're at a crossroads in terms of moving into a market that we've not been in seriously," Momjian said. PostgreSQL is used in Chrysler, hospitals, 3Com and elsewhere, but it often has come in through the back door by computer aficionados without explicit corporate approval.
"What I see Great Bridge as doing is bringing us in the front door," Momjian said.
Landmark is a privately owned company that runs, among other properties, The Virginian-Pilot newspaper and the Weather Channel cable TV station. The company had revenues of more than $650 million in 1998.
Though Landmark didn't invest in Red Hat, its chairman, Frank Batten Jr., did. He resigned from the Red Hat board in January and has been selling his shares since then for tens of millions of dollars.
"He was way ahead of us," Ritter said.
His father, Frank Batten, quipped, "Frank Jr. has a red hat, and I have a red face," Ritter recalled. The upshot was that Landmark began searching for a new open-source software package to capitalize on.
Landmark isn't the only one to have Red Hat convince it of the business possibilities of open-source software. Benchmark Capital, a later investor in Red Hat, has backed a second open-source business called Collab.Net for open-source programmers.
PostgreSQL began at the University of California, Berkeley. It forms the foundation of Informix's database software, Momjian said. The software is released under a Berkeley-style license, which, unlike the General Public License used by Linux, allows companies to take the software and add proprietary extensions. With Linux, by contrast, companies or individuals are required to publicly release any changes made if they choose to distribute the software.
Version 7.0 of PostgreSQL, including several new features and hundreds of bug fixes, was released today, Ritter said.