One of the more notable success stories of the open source world is in the field of databases. A company with a strong commitment to open source has seen tremendous growth and success in the enterprise while contributing to a hugely respected open source code base. Who is that? Maybe your first thought was MySQL, now owned by Oracle. But unlike MySQL, this company is actually taking business away from Oracle so effectively that it's seen an 80 percent revenue growth in the last year.
The database is PostgreSQL, an enterprise-class object-relational database developed collaboratively by a large community of fiercely independent experts. PostgreSQL hasn't had the hype that MySQL has had, but it has been around for just as long and is very widely used. Unlike MySQL, it's licensed under a permissive open source license; as such, it's open to much simpler adoption by technology suppliers, as well as by end-users.
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The company in question is one of the most successful beneficiaries of that independent and permissive culture: the EnterpriseDB Corporation. It was formed in 2004 and provides both commercial support services and additional features for PostgreSQL. I spoke withEnterpriseDB's CEO, Ed Boyajian, to understand more about the company and its successful strategy based on open source software.
First we covered the market EnterpriseDB is addressing. Boyajian told me that EnterpriseDB has seen "extraordinary growth" in the last year, with an 80 percent year-on-year growth in revenues and a 50 percent growth in the customer base, to around 1,200 customers. Unlike MySQL-type applications, which tend to be edge-of-network data stores for systems like Web servers, blogs, and retail systems, PostgreSQL is used by at least half of EnterpriseDB's customers for creating new enterprise-class databases, with 40 percent migrating work away from existing proprietary systems like Oracle.
These uses tend to grow in their complexity and support needs over time, with the consequence that customers deepen their relationship with EnterpriseDB rather than reduce it as they would with a stabilized edge-of-network application. He told me that "enthusiasm is accelerating" for use of PostgreSQL rather than expensive proprietary systems and he expects the growth to continue.
Because its business is based on open source software that anyone can just download from the Web, EnterpriseDB has a well-developed subscription-based business model. The cost of sustaining a database in production for customers is typically much lower than with a proprietary database, and the health of the PostgreSQL community means EnterpriseDB can never rest on its laurels; there's always another community member ready to step in should a customer be unhappy. Subscription models have two interesting aspects that are both present at EnterpriseDB.
One is an emphasis on good-value training. Not only is this a useful source of revenue, it is also a great business development tool, as companies who send staff for training will be very likely to follow through, as well as become customers for subscriptions. It's common to find companies with true open source commitment featuring training in their product set in this way; it's a useful indicator of their bona fides.