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 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.
Postgres for years has lived in the shadow of MySQL's media attention: the "boring" database that quietly goes about its work while its sexy Web 2.0 cousin wins the popularity contest.
Recent data from the Eclipse Foundation, however, suggest that Postgres may be ready to make significant waves in the enterprise, even if it doesn't make headlines.
In a recent letter to European Union's commissioner of competition, former MySQL CEO Marten Mickos stressed that MySQL's target market is the emerging Web database market and that the enterprise IT market was never really a source of strength (or focus).
Postgres is the opposite.
Postgres is an enterprise Java database, more suitable for carrying corporate data than the Web's consumer data. According to a 2009 survey by the Eclipse Foundation, MySQL (27.7 percent) and Oracle (27.3 percent) were the top-two databases used by those surveyed, with Postgres registering a respectable but still distant 9.9 percent.
Given that Oracle database users are far more likely to use Java as their programming language to develop server-centric applications, while MySQL users are three times more likely to use PHP as their primary language (17.4 percent of those surveyed use it, versus 5.4 percent for all users) to builde RIA/Web applications, Postgres is clearly more Oracle than MySQL.
Granted, the Eclipse community is traditionally Java-centric, so it's not surprising that Java would be prominent among its developers. But it's also the case that enterprise IT remains a Java/.Net market, and in such a market Postgres could be poised to boom if it can muster sufficient marketing to make its message heard.
This is where EnterpriseDB comes in.
The MySQL community would not be as well-developed as it is without MySQL, the company. MySQL AB has funded the overwhelming majority of MySQL database development, but it has also provided the marketing muscle to make a name for the Web database.
Postgres has traditionally been a standalone, organic open-source project with little concerted corporate involvement. EnterpriseDB has started to change that, but for too long wrongly fixated on competing with MySQL, a database that serves a different market and different developers. The company also spent too much time talking about Oracle migration technology, rather than focusing on why Postgres is a great database.
That may be changing.
Postgres just released version 8.4 of the venerable database. In EnterpriseDB's discussion of the release, there's no mention of Oracle, MySQL, or any other competitor. Instead, EnterpriseDB seems to be focusing more on its commitment to Postgres development, adding significant enterprise hardening through its open-source Postgres Plus distribution.
It's a welcome change, and one that could position Postgres to take a bigger share of the enterprise Java database market--not because it's cheaper than Oracle or more open than MySQL but because it's a great database in its own right.
That's the right messaging for EnterpriseDB...and Postgres.
IBM is going on the offensive against the pending merger of Sun Microsystems and Oracle.
IBM announced Wednesday that it nabbed 100 of Sun's and Hewlett-Packard's customers last quarter alone for its high-end servers and mainframes, with half the deals worth over $1 million each, as reported by The Wall Street Journal.
The bigger news, however, may be IBM's partnership with EnterpriseDB, the commercial backer of the open-source PostgreSQL database, to embed EnterpriseDB's Postgres Plus Advanced Server technology into IBM's DB2 9.7 database product. EnterpriseDB's technology basically allows applications written for the Oracle database to run on EnterpriseDB's PostgreSQL...and now IBM's DB2.
In other words, through this partnership with EnterpriseDB, IBM has gained the ability to easily migrate customers from Oracle to DB2--seamlessly, painlessly, freely.
This is obviously big news for EnterpriseDB, having the opportunity to work with IBM, but it's also big news for IBM, providing a nice off-ramp from Oracle and an on-ramp to the IBM DB2 highway.
This isn't, of course, the first time the two have worked together. IBM is an investor in EnterpriseDB and has been tracking the open-source database market for some time. This is the first time, however, that the two have banded together to target Oracle.
Expect sparks to fly.
I asked Ed Boyajian, CEO of EnterpriseDB, about the effects of the partnership on Oracle, and its acquisition of MySQL (in buying Sun):
IBM and EnterpriseDB have a shared interest here--to preserve customers' right to choose their database solutions, whether they're making a closed-source decision (DB2 vs. Oracle) or an open-source decision (MySQL vs. Postgres Plus). Oracle's moves aim to limit those choices; our intention is to promote them.
It remains to be seen whether Oracle will bury MySQL post-acquisition, but one thing is clear: the database market just became even more interesting. Arvind Krishna, vice president of database servers and development at IBM, said in a statement that "clients are increasingly taking advantage of DB2 to lower costs while improving the performance and reliability of their business applications."
That may have been the case before. With Oracle-compatibility built into DB2 via EnterpriseDB, IBM has positioned itself to make it happen now.
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While Sun Microsystems' MySQL gets the limelight, with its 55 percent quarterly billings increase, other open-source database competitors like Ingres and Enterprise are also doing well.
Ingres on Tuesday reported a significant uptick in its 2008 revenue, climbing 32 percent to $68 million over $52 million in 2007. EnterpriseDB didn't provide revenue numbers, but it also recently reported a banner year, with greater than 50 percent growth in new customer accounts and "comparable bookings growth."
New Ingres customers in 2008 include Air Enterprises, Allied Express, Banca IFIS SpA, BBP Partners, CondeNast Publications, Connected Wedding, C&K Market, Lechler, Les Salins du Midi, LYNX Services, Volcano, SunPower and the US Coast Guard. Ingres counts over 10,000 enterprise customers, including 136 of the Fortune 500 companies like 3M, BAE Systems, Cypress Semiconductor, and Lufthansa.
As for EnterpriseDB, in 2008 it added The Los Angeles Times, hi5 Networks, OptionsHouse, LLC, and Backcountry.com as customers. Existing customers include FTD, Moody's Investor Services, TD Ameritrade, Juniper Networks, McKesson, and others.
It's good to see the open-source database market growing, generally, and not merely MySQL. It's not a market if it's owned by one (relatively small) company. But a bevy of such companies...? That's a market worth watching.
To get a glimpse of the changing face of open source, look no further than InfoWorld's "Future of Open Source" roundtable. Some of the thoughts expressed by various leaders in the open-source community are insightful, but that's not the real story.
No, the real story is who InfoWorld chose to profile.
Sure, you get the obligatory Bruce Perens and Eric Raymond call-outs, because these are two of the guys that formed the foundation of open source upon which the rest of us build. But they're the only throwbacks to the "good ol' days" of open source, back when open source was suspiciously anti-corporate (until Raymond and an elite group dubbed "free software" "open source").
Today? Nearly everyone on InfoWorld's list is corporate.
The companies represented include big companies (IBM, Microsoft, Google), small companies (Alfresco, Digium, Hyperic, EnterpriseDB), and in-between companies (MySQL/Sun).
It's perhaps this last one that demonstrates the profound change open source has made over the past three to four years. MySQL was and is a community favorite, but at a cost of $1 billion it has demonstrated the corporate value of open source and, indeed, has begun to alter its business model to ensure that it balances its free (developer) community with its paid (enterprise) community.
Dave Rosenberg writes that 2009 will be the year when open source becomes paid software, but I think we're already there. We've been there for at least two years, in fact. We just didn't know it.
InfoWorld's roundtable, however, makes it abundantly clear: open source is corporate, and that's a compliment, not a slight.
In June 2008, EnterpriseDB named Ed Boyajian, former Red Hat executive, as its CEO. At the time I had lost interest in EnterpriseDB and wondered why someone with Boyajian's pedigree would go there.
Well, I had the chance to talk with Boyajian today and I'm starting to see his interest in EnterpriseDB. In particular, I believe Boyajian brings EnterpriseDB precisely what it needed: sales-level execution and strategy to complement the product-level execution and strategy it already had done well.
What, specifically, does this mean? It means moving to an inside-sales model. It means growing the open-source database business in the same way that Boyajian helped to grow Red Hat's Linux business: starting with non-mission critical applications and growing into mission-critical applications within accounts over a multi-year engagement.
And, critically, it means emphasizing its drop-in Oracle compatibility as a way to immediately cut Oracle costs for non-mission critical applications, rather than going for the expensive, sales executive-driven rip-and-replace sales strategy.
I worried that MySQL would get buried in Sun in the short-term, affording open-source competitors like PostgreSQL (upon which EnterpriseDB is based) the chance to leapfrog it in accounts. The concern was, I think, misplaced, as EnterpriseDB's problem wasn't MySQL. It was its own strategic focus. (MySQL, for its part, has done quite well under Sun's banner, as The Register points out, and is getting creative with how it drives MySQL sales.
Boyajian seems to have turned that around and is now seeing business accelerate, particularly in transaction-heavy database applications where MySQL has traditionally not been as strong as PostgreSQL (and Oracle). In other words, EnterpriseDB is now poised to succeed alongside MySQL, not despite it or because of it. Additionally, with pricing at a fraction of the cost of an Oracle license and performance on par with Oracle, it's not only MySQL that will see competition from EnterpriseDB.
The database market just got some new competition with EnterpriseDB's renewed momentum. I think it's going to last.
EnterpriseDB CTO Bob Zurek was kind enough to have me on the his Database Radio program, with the audio feed here and the transcript here (PDF), which proved to be fun to record and hopefully an enlightening listen.
Bob asked me to name the top trends in open source. Here's my answer:
There have been two big ones that I've noticed lately. One is the opening up of the Web. Traditionally the Web (infrastructure) was open, but increasingly we have things like applications moving to the Web, things like Facebook, that were proprietary--maybe built on open source, but their APIs were closed...Facebook, Reddit, Myspace--all of these are now competing on "openness," and it's kind of a rehash of what we were doing in the offline world with the Alfrescos and Red Hats of the world over the last 10 years, but it's been at a much faster pace.
And the second thing is, which is something that Tim O'Reilly has been predicting for a long time, open source is just becoming standard furniture in everybody's business...Even companies that were once fighting it are now incorporating it. I think five years from now, even two years from now, open source is going to be thought of as standard plumbing that everybody includes in their offerings, whether they're a vendor or an enterprise customer.
Now (open source has) become commonplace. I think that's good and bad. It's bad in the sense that we may forget just how unique and interesting open source is, and the value that it provides in reducing lock-in. But it's good in the sense that it means we can focus on providing value to customers, rather than on "who's the most pure open-source company." I'm starting to see that that may not be the most productive place to have the conversation.
For the rest, you'll have to tune in. Let me know if you disagree with the points above or others I make in the interview.
Pop quiz:
You are a new startup, looking to break into a big market. To do so you should:
a) Focus on differentiating against and beating the biggest vendor in that market
b) Focus on differentiating against and beating the most successful tiny vendor in that market
c) Focus on creating a compelling value differentiation from all other vendors in the market and disrupt the economics of that market
Answer? It could be a mixture of "a" and "c," but I'd be hard-pressed to agree with any strategy built on "b." Unfortunately, EnterpriseDB continues to fixate on MySQL, a growing but still tiny gnat in the grand scheme of the database market, when it really should be focused on where the dollars are: Oracle.
EnterpriseDB used to do this, of course. That was once its big claim to fame: Drop-in compatibility with Oracle at a fraction of the cost. Now? Well, let's just say its "Great Debate" between itself and...no one from MySQL strikes me as a sham, and one that is guaranteed to get it roughly $0 in revenue.
Hint to aspiring open-source companies: Your competition isn't other open-source software. That's not where the dollars are (yet). Your competition is the inefficiencies and excessive pricing of the proprietary software world. That's where the "great debate" is.
Hi5 is one of the world's largest social networks, with over 56 million monthly visitors. It's a company that demands maximum scale and performance from its infrastructure.
As such, it's no surprise that Hi5 recently opted to go with PostgreSQL as supported by EnterpriseDB.
PostgreSQL? Isn't that an open-source database? It can handle that load?
Indeed.
Hi5 runs hundreds of PostgreSQL servers in one of the world's largest commercial OLTP PostgreSQL installations. All Hi5 subscriber data, including user profiles, metadata associated with user photos, and comments, is stored on the company's PostgreSQL databases...In June 2008, the PostgreSQL-based system delivered more than 18.5 billion page views, serving nearly 11 million visitors to the site every day.
A key challenge and requirement for Hi5 is that the social-networking site cannot be taken offline for maintenance. The company's PostgreSQL databases must deliver exceptional stability and performance 24 hours per day, seven days per week, 365 days per year to serve users around the globe. Any issues must be resolved in real time, with the system still running.
That's extreme performance, and stands as a continued testament to open source and its increasingly routine ability to deliver significant performance at a lower cost, just as Red Hat announced earlier today in its Linux benchmarks.
However, the real story in Hi5's decision is its work with EnterpriseDB. The Web 2.0 world has traditionally adopted open source heavily...and paid little to nothing for it. Hence, the real news here is one Web 2.0 company's realization that buying support for open-source software makes a lot of sense/cents.
... Read moreEd Boyajian, former vice president and general manager, North American sales, Red Hat, has been named as EnterpriseDB's new president and CEO. Andy Astor will assume the role of executive vice president of Business Development at EnterpriseDB, and has no doubt breathed a huge sigh of relief at giving up the reins to Ed.
This is just one of the three new open-source CEOs I reported a few weeks back.
Savio rightly suggests that this is a positive indicator of EnterpriseDB's/PostgreSQL's health, rather than an indication of any ailment at Red Hat. Even so, I wouldn't have pegged EnterpriseDB as the place for Alex Pinchev's right-hand man to end up.
EnterpriseDB has struggled to keep pace with MySQL's brand and revenue momentum. I'm not sure this changes that. What it might do is make EnterpriseDB an interesting acquisition for Red Hat. Red Hat needs to continue to grow out its "hub-of-the-commercial-open-source-community" play, and a database is going to be critical to that.
Having missed out on MySQL, could PostgreSQL be a good back-up plan? Perhaps. But then, as perhaps JOnAS proved, buying into second place has yet to prove itself as a viable strategy in open source. First-mover advantage tends to translate into "winner takes all."
Even so, best of luck to Ed, Andy, and the EnterpriseDB team.
