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Database start-ups bet on open source

Growing interest in open-source databases fuels industry of add-ons and services--vital to winning corporate customers.

Following the gradual acceptance of Linux, open-source databases are moving into corporate data centers as an increasingly viable option.

Databases have been available with an open-source license for many years. But the past few months have seen a growing number of partnerships and products aimed at maturing the industry of add-ons and support services--vital to winning over corporate customers.

At the LinuxWorld conference this week in San Francisco, MySQL signed partners Novell and Dell to resell the upstart company's database and support service, making the product easier to procure. MySQL is also readying a release of its namesake database with features including stored procedures and distributed transactions, which large corporations often use.

In the past few months, a handful of companies--Pervasive Software, Greenplum and EnterpriseDB--have sought to build businesses around the PostgreSQL open-source database, which has been around for about 20 years and is considered very mature. One of those upstarts, EnterpriseDB released on Tuesday its first product, detailed its pricing plans and said it intends to raise its first round of venture funding later this month.

Last week, three companies joined to create a package of open-source database-related products for business intelligence applications. And the Apache Derby database last week shipped its first version and gained Sun Microsystems as a distributor.

The growing number of technology companies betting their businesses on open-source database products reflects a gradual shift in corporate spending patterns, according to analysts and industry executives. With many companies familiar with Linux, the Apache Web server and open-source development tools, databases are an obvious next step.

"Customers are paying a lot of money for an Oracle or IBM or Microsoft database license, and they are very cost-conscious. To some extent the database is a commoditized layer, and they're asking themselves 'Why are we paying money for a commoditized layer?'" said Michael Goulde, an analyst at Forrester Research.

A Forrester survey found that more than two-thirds of corporate customers are using open-source products in some way. The research company estimates that spending on open-source databases was about $120 million last year.

Often, developers bring in an open-source product for a single project and then the usage spreads. Indeed, open-source databases are still a small sliver of the overall relational database industry estimated at nearly $15 billion last year, according to IDC.

Different tacks
Still, usage of these alternatives to entrenched database providers appears to be growing. MySQL boasts having 6 million installations, along with 1,500 MySQL-related open-source projects at SourceForge and a growing network of partners, which help distribute the company's product and services.

Large corporate customers, such as Sabre Holdings and PriceGrabber.com, have built their back-end systems around large farms of relatively cheap hardware servers running MySQL.

MySQL's distribution partnerships with Novell and Dell will broaden its distribution substantially, according to the company. The MySQL Network subscription service starts at $595 and costs $4,995 per database per year for round-the-clock support.

MySQL also intends to distribute a release candidate for MySQL 5.0 next week and make the release generally available in the fall, said Zack Urlocker, vice president of marketing at MySQL. That update will include a number of features, including the ability to handle distributed transactions using the XA standard.

"Bluntly put, we are based on Postgres. If Postgres doesn't succeed, we don't exist as a company."
--Andy Astor
CEO, EnterpriseDB

MySQL is benefiting from the growing interest in the so-called LAMP stack of open-source components for building business applications, Urlocker said. Rather than purchase Java or Microsoft .Net development tools, corporate customers are building new applications on the LAMP combination of Linux; Apache Web server; MySQL; and PHP, Python or Perl scripting languages.

A number of smaller companies are betting on LAMP as a viable stack on which to build add-ons and tools. MySQL's booth at the LinuxWorld conference is hosting a number of smaller companies, including and , that have built their products on the LAMP combination.

Meanwhile, another start-up, EnterpriseDB, is taking on the corporate database market but using a slightly different tack.

The company, launched in May, has built tools to ease the migration from Oracle databases to PostgreSQL. Similarly, later this year EnterpriseDB intends to create compatibility with the querying languages for Microsoft's SQL Server.

The database is available for free download and use for development and testing. Once an application is put into production, EnterpriseDB will charge customers between $1,000 and $5,000 per year per processor for technical support services using a commercial license. A multicore processor will be considered a single CPU for licensing.

The company also announced that PostgreSQL engineers Alvaro Herrera, David Cramer and Jonah Harris will work for EnterpriseDB, while continuing their PostgreSQL development work. EnterpriseDB also said it will sponsor a project to build standard-compliant stored procedures in PostgreSQL.

The employee moves and code donations are meant to raise EnterpriseDB's standing in the PostgreSQL open-source community, said company founder and CEO Andy Astor.

"Bluntly put, we are based on Postgres. If Postgres doesn't succeed, we don't exist as a company," Astor said. "It's in our strong interest for Postgres to be a wildly successful database."

Astor said EnterpriseDB expects to be cash-flow positive within the next 12 to 24 months.

Other open-source databases available include Sleepycat, Firebird and Derby.

Felt around the industry?
So far, executives at the leading three database companies--Oracle, IBM and Microsoft--discount the impact that upstart companies are having.

Yet at the same time, all three of the heavyweights have in the past year introduced a low-end edition of their database meant to appeal to small- and medium-size businesses. Oracle, for example, has a database that costs $149 per user, which is limited to one server CPU but is the same as the company's high-end version.

Microsoft, which has a free database, has also added a number of typically high-end features, including business intelligence tools, to the Workgroup edition of its product, which costs $3,899 per processor.

In a recent interview with CNET News.com, Oracle President Charles Phillips said that open-source databases are a "net positive" on Oracle's own database business, which is doing very well.

"We think open source has (played) an important part in introducing new customers, who we wouldn't have known about, to the idea of databases," Phillips said, noting that about 40 percent of new open-source database customers did not previously use a database. "When they want to do something more serious...they very quickly jump onto Oracle."

Noel Yuhanna, database analyst at Forrester, expects that there will be more competition among database companies as new market entrants look to lure away customers of entrenched database providers.

Open-source databases are having the biggest impact on the low end, where a "good enough" database can serve many of a company's needs, he said.

Yuhanna predicted that there will be more companies looking to offer support services, which are crucial to corporate adoption of open-source products. Already, SourceLabs and SpikeSource offer subscription-based support services around open-source development middleware, including databases.

"Competition is good. It just means that the market is about to take off," Yuhanna said. "Certainly we're seeing a lot of interest in open source. These (new vendor) initiatives are adding a bigger and larger solution focus."