Thursday, March 27, 2008

IBM's Interest in EnterpriseDB

Like a few others, I found IBM's choice to make an investment in EnterpriseDB kinda interesting. Matthew Aslett (the 451 group) got the following quote from IBM in explanation:
"IBM has become a minority shareholder of EnterpriseDB. This affords us an opportunity to continue to participate in, and gain further insight into, the open source community. This complements other experiences such as with the Linux, Apache and Eclipse communities and previous investments we’ve made in Red Hat and Novell. IBM has been a long-time supporter of Open Source communities, and we continue to see interest among our clients for Linux and other Open Sources solutions. This investment supports our overall strategy to support Open Source solutions in the marketplace to further enable our customers to implement business-critical solutions"

If I'm in EnterpriseDB's shoes, I'm digging this quote since being thought of in the same breath as Linux, Apache, and Eclipse sounds like strategic company to me. After all, in my opinion, a large part of Red Hat's success can be attributed to the early investments and marketing done by IBM (as well as HP, Oracle,and others) on its behalf.

The quote above also tries to minimize the importance, of course, but why would IBM invest if it just wanted an arm's length relationship?

To me, this move is a typical IBM long-term strategy play. They are always looking 5-10 years down the road (which equates to 1-2 Big Blue Dog Years). And while EnterpriseDB is not going to immediately displace Oracle for the high-end database needs, they still have an interesting market opportunity.

Savio Rodrigues (IBM WebSphere dude) posted on this topic and asked the question:
"What do you think, does EnterpriseDB have a brighter future by targeting Oracle users that want "Oracle like features for MySQL prices" or by targeting MySQL users who have "hit the wall"?"

Since EnterpriseDB is built on Postgres (which has been around a long time and is quite stable) and since they provide an Oracle compatibility layer, my answer would be "Yes" and "Yes". I think they compete for general database business with both Oracle and MySQL.

Bottom-line: This investment by IBM gives them a potential future play that neither their DB2 nor their Cloudscape/Apache Derby investments address directly. Now we just need to wait 1-2 Big Blue Dog Years to see how it all plays out.

UPDATED: The EnterpriseDB One-Two Punch
Savio replied to my blog with "I agree in principal that EnterpriseDB will continue to go after Oracle & MySQL. But in practice, they need to pick one segment to be their primary focus, or else they risk less than optimal results in both."

While I agree with Savio that focus is usually a good thing, my experience at JBoss, for example, also taught me that sometimes you've gotta lead with a one-two punch. At JBoss, we had momentum from new application development projects AND momentum from BEA migrations. Both were valid and lucrative focus areas. We actually had solid WebSphere migration business too, but we treated those more opportunistically than strategically since battling IBM is always more complex.

Anyhow...my point is that if EnterpriseDB's Oracle compatibility is any good, then over the longer-term, they can drive solid business. Ex. think through the Oracle upgrade cycle (when faced with moving from an older version to a newer version....should I consider EnterpriseDB??). The combat with MySQL clearly will heat up over time...but I still think they need to milk the Oracle opportunity.

I'm just a Philly guy who loves a nice one-two punch. :-)

2 comments:

SavRod said...

I thought you'd be out on a beach somewhere!

I agree in principal that EnterpriseDB will continue to go after Oracle & MySQL. But in practice, they need to pick one segment to be their primary focus, or else they risk less than optimal results in both.

I wonder how much the IBM investment was...(I couldn't tell you even if I knew ;-) But we're sure getting a lot of coverage for it.

Savio

Shaun Connolly said...

Hah! I actually posted this blog from UNC's library. Doing the "college road trip" with my daughter; UNC Chapel Hill is really a nice campus.

Anyhow, I disagree that they need to pick one segment (Oracle or MySQL) as their primary focus. I think they are kinda in the middle of the two and as MySQL chases heavier workloads, they will clash more. And they can grab a nice chunk of mid-range workloads just suckling off of Oracle's large installed base. This dynamic is why I think they are of interest to IBM.