EnterpriseDB and Sun Reaping Benefits from Open Source Databases

by Ostatic Staff - Jan. 29, 2009

There were new metrics out this week for both EnterpriseDB's PostgreSQL-centric database business, and Sun Microsystems' MySQL business. These players are at the forefront of challenging pricing for databases and surrounding services from competitors such as Oracle, and both are having strong success with strategies focused on open source databases. In Sun's case, some of the folks who questioned whether $1 billion was too much to pay for MySQL should take a second look.

EnterpriseDB has a database that is mostly compatible with Oracle, but costs much less, and the company gets revenues from services and support. It also offers free tutorials and webcasts on getting started. The secret sauce is that the company uses extensions to the flexible open source database PostgreSQL. IBM has a stake in the company, it has an ongoing partnership with Japan's NTT, and it is posting some strong numbers and milestones, including these newly reported metrics for 2008:

  1.  50% growth in new customer accounts, including customer wins at The Los Angeles Times and hi5 Networks
  2.  The launch of the Postgres Plus product family, including the open source Postgres Plus Standard Server and the commercially licensed, Oracle-compatible Postgres Plus Advanced Server
  3.  $16 million Series C venture capital financing
  4.  Strategic partnerships with IBM and NTT, the largest telecommunications company in Japan
  5.  The hire of Ed Boyajian as the company's new CEO
  6.  Significant code contributions to the PostgreSQL community

Customer wins at The Los Angeles Times and Hi5, the third largest player in online social networking, are notable. Once large organizations centralize around enterprise databases and services, stickiness ensues. If EnterpriseDB can stay focused on its Oracle compatibility layer and woo more large enterprises, it has a chance to keep growing at a good clip during these cost-conscious times.

Meanwhile, yesterday Sun Micrososytems reported its quarterly financial results, and there were strong signs that its open source initiatives are beginning to gain traction, particularly on the MySQL front. In fact, Sun's latest sales numbers for its MySQL division are making the $1 billion price it paid for the open source database look like a good deal.

As Matt Asay notes, Sun's MySQL billings came to a healthy $81 million for its latest quarter, a 55 percent increase over the previous quarter. You don't have to grow any business at 55 percent per quarter for very long before prospects begin to look mighty rosy.

Oracle, in particular, has a long history of charging premium prices for enterprise-class databases and surrounding services. On more than one front, it looks like open source databases are starting to make a dent in that dominance.