Enterprise Linux News:
EnterpriseDB CEO gunning for Oracle
By Jack Loftus, News Writer
03 Nov 2005 | SearchEnterpriseLinux.com
NEWTON, Mass. -- At the Open Source Business Conference this week, several open source software (OSS) vendors had the unique chance to showcase and pitch their products to IT executives who were interested in learning more about open source.
One of the featured companies was EnterpriseDB, an open source database management system vendor whose namesake product is based on PostgreSQL and was introduced earlier this year.
EnterpriseDB president and CEO Andy Astor spoke with SearchOpenSource.com about what it means to be an open source database company in competition with proprietary giants like Oracle, as well as with other open source providers like MySQL AB.
Astor, who told SearchOpenSource.com in May that OSS is an "unstoppable force" that will change the face of software forever, dismissed a free version of Oracle's database as late to the game, and gave an update on the last six months in OSS.
How do you respond to those IT executives, like Tim Vaverchak of the Commonwealth of Massachusetts, who are unsure of switching to an open source database app like EnterpriseDB?
Andy Astor: How can I put this? Databases are sticky. People who are have been using a database for a long period of time tend to know the subtleties and intricacies of that database and tend to not want to switch that easily. Frankly, DBAs, as a group, tend to be focused on the databases that they are an expert in. They tend to be very, very concerned with stability and reducing risk, and that is appropriate because that's their job -- to keep those databases running.
I would not call it a religious war or religious issue, but I would certainly agree that DBAs are going to be to be more reluctant to switch their database than perhaps a CIO or c-level executive who would be very interested in a reduction in their database costs.
You mention reluctance on the part of DBAs. How does an open source database vendor deal with that going forward?
Astor: How we deal with reluctance is we are not going to replace Oracle or MySQL or anybody else overnight or at all. There is plenty of room in this market -- this is a $15 billion market -- for all of us. So we will work side by side and bring in new customers when appropriate.
A fundamental part of our value proposition is that we are compatible with Oracle, and so the familiarity that we bring and transferability of skill sets is tremendously to important to that market.
Charlie Brenner of Fidelity has argued that your competition is actually with MySQL and not with Oracle. Do you agree with him? And if not, could you explain specifically who your direct competitors are?
Astor: We have two primary competitors and they are MySQL and Oracle, and they are direct competitors for different reasons. We are indeed a database that is targeted directly at enterprise developers who are moving to open source and want to be their database of choice. Right now, the most popular open source database is MySQL and it is our contention that they are very appropriate for a certain class of applications and not as appropriate for a different class of applications where we make more sense. On the other hand, with Oracle, we bring similar functionality to the table that Oracle does, but at fraction of the price. They are two very strong competitors for two very different reasons.
Another one of the executives, Rick Carey of Fannie Mae, said at the conference that he believes upfront costs are not as big a deal as you first made them out to be. You disagreed with him during the session. Why was that?
Astor: His point is that license costs are only a small fraction of the total cost of ownership of databases, and he is absolutely right. There are additional costs related to maintenance, support and migration. In the three-minute pitch I had, I was not able to get into that, but when you look at the [TCO] of EnterpriseDB versus Oracle, the difference can be 80% to 90%.
That is true because the licenses are dramatically lower, the service and support is bundled into the license price, and the migration costs are little to none because the existing applications are able to work with our database without modification.
Six months ago when we last spoke you said the OSS database was an "unstoppable force" that would erode the dominance of Oracle and Microsoft. What's changed, for better or for worse?
Astor: Open source is an unstoppable force that will forever change the face of the enterprise software industry. Nothing has changed there, including the time frame over the next several years. In 2010, you and I will not recognize the enterprise software industry, but I don't know what it will look like yet.
The new Novell [chief operating officer] Ron Hovsepian who spoke at the keynote, referred to something Gartner Inc. had said: that there will be two operating systems in 2010, Windows and Linux. He and I both believe that is an overstatement, but it is nevertheless a 'would you have believe that if I told you that four years ago?' moment. And certainly it is not.
We are also seeing Oracle respond to the threat of MySQL by buying Innobase, which is the storage manager at the heart of MySQL's most important transactional applications. We are seeing Oracle respond to the low end of the market with a free database, and EnterpriseDB coming from literally nowhere in May to a company that has in four months accumulated over 40,000 downloads and over 4 million Web site page views. We have won a best database award against Oracle and MySQL, and we've seen funding of $7 million.
Does that mean all software will be free? No, it does not. Does it mean that all we will do is sell services and support? No, it does not. It means the model is changing, and we are all involved in an experiment to see how it will change.
You recently sent out an e-mail update regarding Oracle's purchase of Innobase in which you were critical of MySQL, but also assured customers that the same thing could not happen to EnterpriseDB. Why are you so sure?
Astor: Innobase is or was a private company that was separate and distinct from MySQL, and companies can be bought. PostgresSQL is first of all not a company; it is a community that cannot be purchased because there would be nobody to pay money to. In EnterpriseDB, there are no products or projects that can be purchased where we would no longer have the rights to use them commercially.
You mentioned the Oracle free database. As a competitor to Oracle, what are your thoughts on that move?
Astor: First of all, Oracle is late to the game on the free low-end database. Microsoft has been doing it for some time, EnterpriseDB has certainly been doing it since we launched, and even MySQL can be used as long as it is not used commercially for any charge. So, Oracle is demonstrating that it is sort of coming in late to the game and sort of rushing around trying to figure out what is the right response to this changing market.
I think it also demonstrates that they feel their database dominance is being threatened because of the people they are targeting with this free database. In other words, if they mentioned in their release they are targeting students and open source advocates, they are admitting they are losing mindshare, because five years from now those groups are going to be able to buy software. So, from a competitive standpoint [the free Oracle database], is of no consequence because we don't compete with Oracle at the level where we are free to customers.