The stealth success of PostgreSQL

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.

Target market 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.

Subscriptions 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.

The other is the “proof of concept” sale. Proprietary software companies can treat up-front consulting and services as a cost of sale, knowing you will be locked in once you take the database to production. But companies selling open source subscriptions can’t usually justify the risk, so instead offer some kind of proof-of-concept package to support customers performing evaluations or prototype deployments. Never be put off by a company that wants you to pay for a proof-of-concept; it’s a sign they are a genuine open-source-based vendor.

Added value All the same, EnterpriseDB has some proprietary offerings. One is the Oracle compatibility feature, part of the Postgres Plus Advanced Server package. I asked Boyajian why he felt they needed to keep this proprietary when it was so clear the rest of EnterpriseDB’s business was a rounded open-source-based business that respected its customers software freedoms. He cited two reasons.

One was that customers needing this feature had already surrendered their flexibility to Oracle; the second was that the product was of value to other proprietary companies , such as IBM, who had licensed the Oracle compatibility for DB2 starting from version 9.7 in 2010. All the same, he recognized that his enterprise customers — especially in government, a growth market — are becoming more experienced in understanding the terms under which they obtain production software and as such will be keeping the matter under review.

As for the future, Boyajian believes there is an important market developing in the cloud. Whereas early cloud offering have emphasised niche applications like edge storage and analytics (for which EnterpriseDB has a Hadoop connector), he believes a growing number of customers will require full-featured relational database capabilities in the cloud. As a consequence, EnterpriseDB recently announced its Postgres Plus Cloud Database. It features a cloud-optimized version of PostgreSQL along with automated database administration capabilities that allow DBAs to manage large database across the cloud easily. The company claims early interest has been strong, with more than 2,300 users kicking its tires since the January launch.

Time will tell whether this approach will allow EnterpriseDB to extend its strong growth into the dynamic, varied, and innovative cloud market where NoSQL, MapReduce, and other techniques are already widely used. But in the decade the company has existed, it’s already built a reputation in the community and an enviable customer base, using a rounded, open-source-based business model. Chances are it can.

This article, “The stealth success of PostgreSQL,” was originally published at InfoWorld.com. Read more of the Open Sources blog and follow the latest developments in open source at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.