MySQL takes cue from the master

A Swedish upstart is challenging Microsoft in the database arena by making use of the same low-end assault tactics that the software giant employed to gain a foothold.

MySQL, which sells an open-source database of the same name, was nearly unheard of in corporate technology circles a few years ago. Now the company's competitively priced, easy-to-use database is becoming increasingly popular with business customers looking for smaller, less-expensive options.

And the money is coming in. The venture-backed company's revenue doubled last year to $12 million (10 million euros), and more growth is expected. MySQL executives also foresee steady profits in 2005, though this year the company expects to dip in and out of profitability as it plows revenue back into new development projects such as a graphical management tool and a clustering addition, which MySQL is launching at its customer conference that starts Wednesday.

Microsoft staged its own rags-to-riches story with database software in the mid-1990s by buying a low-end product to compete with Oracle and IBM. Microsoft's SQL Server gained ground mainly among smaller companies and departments of large organizations by offering a lower-cost product that meshed easily with business applications. Now, with its share of the worldwide database market near 20 percent, Microsoft is taking on market leaders Oracle and IBM in competition for larger accounts, arguably leaving a gap at its low-cost starting point.

Enter MySQL.

"There are similarities between us and Microsoft in that we believe in getting developer adoption and building community, and (Microsoft) has always done a great job in ease of use," said Zack Urlocker, vice president of marketing at MySQL, based in Uppsala, Sweden. But, he noted, there are also differences: For one thing, MySQL is not exclusively tied to Windows.

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While many software companies bill their technology as slick and sophisticated, MySQL is comfortable as the Honda Civic of databases. Short on cutting-edge features, it's designed as a "commodity" product for handling simpler tasks, such as fetching data for Web sites.

Yet the company is still looking to improve its product, low-end or not. At the MySQL user conference, which begins Wednesday in Orlando, Fla., the company will detail more features, including clustering, targeted at larger corporate customers.

Cheap and easy
The MySQL database is taking over that lower-price, lesser-need market Microsoft started with. It's a niche the company says is underserved by database industry heavyweights Oracle, IBM and Microsoft. MySQL appeals to organizations looking for a database that is "good enough" for most needs, said Mark Shainman, a database analyst at Meta Group. MySQL is also riding a wave of growing awareness around the cost-effective use of open-source software, notably the Linux operating system.

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"When organizations look at Oracle or other database platforms, they get tons of functionality," Shainman said, "but a lot of what they're trying to do is very simplistic, particularly at the department level."

Appealing to programmers and smaller organizations in the world of open-source software makers, MySQL poses the most direct competitive threat to Microsoft, Shainman said.

"In an environment where it used to be just strictly Microsoft, you're going to see--because of the price component and growth of Linux--organizations leveraging MySQL," Shainman said.

Rather than have an aggressive marketing strategy, MySQL often comes in the back door of corporations and spreads from there, Urlocker said. A programmer or a department in a company may use MySQL when it can't get the budget to purchase a database license, and then the company considers the software for broader use, he said.

When Marten Mickos took over as the company's chief executive in 2000, he quickly focused the company on reaching the broadest audience possible, rather than dethroning entrenched database players.

"Oracle thinks the world needs one huge database. We believe in a distributed model." --MySQL CEO Marten Mickos

"My first message was, 'Do not think you can kill Oracle.' If we go head-to-head, they would respond. We need to measure our success in how well we can serve a new market and build a new market," Mickos said. Applications using the MySQL database typically are new ones, such as searching for airfares, he said. Ease of use is essential as well: The company's goal is to let customers install its database in 15 minutes.

"We're just seeing the beginning of the database market. There will be a need for databases all over the place," Mickos said. "Oracle thinks the world needs one huge database. We believe in a distributed model."

MySQL is not alone in that thinking. Other established open-source databases include PostgreSQL and Firebird.

Database market leaders Oracle, IBM and Microsoft generally downplay competition from MySQL, saying that their products are more mature and sophisticated, offering advanced features and add-ons, such as analytics, to the core database software.

But Urlocker says a commodity product can still handle demanding computing tasks. Dell, for example, sells one- and two-processor servers that are considered commodities, yet they are used in extremely important computing jobs.

Pushing limits
Some of MySQL's customers are already pushing the limits of what the database can do.

Travel reservations provider Sabre Holdings has replaced the mainframe computer and high-end Unix servers that underpinned its customer-facing Web site with about 45 Intel servers running a variety of open-source software, including Linux and MySQL. Going to a "farm" of multiple relatively cheap servers has saved the company millions of dollars in database licenses alone, according to company executives.

The e-commerce Web site PriceGrabber.com chose MySQL as its database when it opened in 1999 because of the database's ease of use and the technical staff's inclination to use open-source software running on inexpensive hardware servers, said Corey Ostman, vice president of technology.

"Five years ago, when you started a business, it was almost automatic that you were going to use Oracle," Ostman said. "(But) we just found MySQL was very easy to set up and use."

The company uses two MySQL database to store about 50 gigabytes of product information, which is updated six times daily. The database and company have met PriceGrabber's needs because MySQL has steadily added features as the Web site's traffic and features have increased.

At one point in 2001, PriceGrabber considered moving to another database for a transaction-intensive system. "We found that the pain in using the other database didn't justify the move," Ostman said. So far, he added, MySQL has matured enough to meet PriceGrabber's needs.

A different model
MySQL has a novel open-source business model designed to appeal to smaller companies. The company offers its product under a dual license, charging customers for support services with a commercial license and offering its database for free download under the open-source GNU General Public License (GPL).

Being plugged into an open-source community of developers helps MySQL generate features that its customers and application developers ask for. Often commercial database companies add features that are requested by large customers, the cost of which is then spread across the entire customer base, Shainman said.

Still, MySQL is not a typical open-source foundation. MySQL is released under the same GNU General Public License that governs Linux, but it's used in a very different way. Each Linux programmer retains copyright to his or her own contributions, while MySQL owns rights to all its code.

That ownership has several ramifications. First, it means that MySQL may offer its database under proprietary licensing terms as well--which it does. Second, it means that the company is largely responsible for its programming needs and isn't able to tap into the vast Linux professional and voluntary talent pool. Still, the company does work with the open-source community for debugging, testing and other tasks.

Because the MySQL source code is released under the GPL, a programmer could "fork" the software, creating a new version that heads a different direction than the company. But doing so would mean that person would be diverging from MySQL's code base and would risk breaking compatibility with other software packages that rely on it.

Ripple effects
Interest in MySQL is swelling. Application developers, who were instrumental in the rise of Linux adoption, are showing greater affinity for MySQL. A January report by Evans Data found that the number of applications that run using MySQL grew 30 percent last year, compared with a 6 percent growth rate for Microsoft's SQL Server. Based on a survey of technology professionals, AMR Research predicted that use of open-source databases, which it said is experimental now, will be mainstream by 2006.

And MySQL is affecting the database market as a whole, particularly in terms of pricing. "Although MySQL is unlikely to displace any vendor in the near term, it is likely to put pressure on the top commercial database players," said Noel Yuhanna, a database analyst at Forrester Research.

"MySQL is likely to put pressure on the top commercial database players." --Noel Yuhanna, Forrester Research

Oracle recently dropped the price of its Oracle 10g database, and discounts from other database vendors are likely to follow, Forrester's Yuhanna said. Oracle said the company needed to lower its price of its database to appeal to smaller organizations.

"We're not necessarily competing with open source," said Jacqueline Woods, Oracle's vice president of global pricing and licensing, in the firm's February announcement of the 10g database price cut. "But I think it's clear that we have a multipronged approach to enter into the lower end of the market, which we felt we weren't penetrating before."

A cluster of new features
MySQL's $12 million annual revenue is a fraction of the overall relational database market, which was estimated at $8.5 billion in 2003 by Gartner Dataquest. And MySQL faces some challenges scaling up its business as it gets more customers.

"Commercial database customers are used to (around the clock) support with quick resolution, so MySQL has to beef up their support to meet such requirements," Forrester's Yuhanna said.

MySQL continues to add features meant to appeal to corporate customers, which will help the database compete with the high-end features of commercial, or "closed source," database companies, analysts said.

Among these--as previously reported--is clustering software, which MySQL purchased from telecommunications provider Ericsson. It's designed to give companies a very reliable database foundation to applications with "sub-second failover" in case a database crashes.

MySQL Cluster will be available in the third quarter and will be priced an "order of magnitude lower than prior solutions," Urlocker said. The company also on Wednesday detailed a partner program to entice software companies to embed the MySQL database in their applications and to entice other partners, such as systems integrators and value-added resellers, to resell the database as part of custom development work.

It remains to be seen whether MySQL's rapid growth will reach the mass success of Microsoft's SQL Server or the Linux operating system. But, if chief executive Mickos is right, MySQL will create a bigger database market, where commodity products, like a Honda Civic, get as much, if not more, mileage than a high-end Mercedes.