EnterpriseDB is a recent entrant to the market for enterprise-class relational databases that is expected to double in the next five years, driven by the increasing need to maintain ever more information in support of regulatory compliance.
Butler Group sees EnterpriseDB as a commercial enterprise Relational Database Company that happens to base the core of its product on the open source code base of PostgreSQL, and offers a solution that competes directly with the mainstream players. The PostgreSQL code base may be the core of its platform, but the company is charging for the use of its extended functionality as well as its support services. EnterpriseDB neatly describe themselves as a commercial enterprise-software company powered by open source.
White Paper www.butlergroup.com 1 Analysis without compromise EEnntteerrpprriisseeDDBB MMaarrkkeett OOppppoorrttuunniittyy Review of the EnterpriseDB market opportunity EExxeeccuuttiivvee SSuummmmaarryy Untitled DocumentMarket Review Paper www.butlergroup.com 2 EnterpriseDB Executive Summary Butler Direct Limited Written by: Martin Gandar Published March 2007 Butler Direct Limited All rights reserved. This publication, or any part of it, may not be reproduced or adapted, by any method whatsoever, without prior written Butler Direct Limited consent. EXECUTIVE SUMMARY EnterpriseDB is a recent entrant to the market for enterprise-class relational databases that is expected to double in the next five years, driven by the increasing need to maintain ever more information in support of regulatory compliance. Butler Group sees EnterpriseDB as a commercial enterprise Relational Database Company that happens to base the core of its product on the open source code base of PostgreSQL, and offers a solution that competes directly with the mainstream players. The PostgreSQL code base may be the core of its platform, but the company is charging for the use of its extended functionality as well as its support services. EnterpriseDB neatly describe themselves as a commercial enterprise-software company powered by open source. To date, solutions such as MySQL, based on open source code have not been considered as credible alternatives to the mainstream vendors, such as IBM, Oracle, and Microsoft because they were thought to lack the scalability, performance, and the transactional features; and the organisations that delivered them lacked the global support infrastructure required to maintain mission-critical applications, but EnterpriseDB aims to change this view. Open Source Software (OSS) through its lower cost of ownership has become an enabler for many organisations allowing them to implement solutions that otherwise would have been too costly to contemplate. Butler Group believes that the market is now ready for a low-risk cost-effective alternative to databases, such as Oracle if it can eliminate the trade off between cost and capability. EnterpriseDB has taken three major steps that it can reasonably claim allow the database to become a viable alternative for most applications written for Oracle. First, it has taken a mature reliable open source database with a 20-year history in PostgreSQL and claims to have enhanced its already well-regarded performance substantially. Secondly, it has provided a very high level of compatibility with Oracle s extensive range of features including support for PL/SQL, embedded procedures, and database replication. The third is that it has provided migration tools and DBA features that make the move from Oracle to EnterpriseDB straightforward with an increasingly high percentage of applications originally written for the Oracle database moving over with little or no need for any amendment. Migration of data from other databases is also well supported with easy-to-use migration tools but initially it is large-scale users of Oracle that are EnterpriseDB s main target. EnterpriseDB Advanced Server provides a high degree of functionality delivering the most important features required by enterprise users, and challenges the normal requirement to balance cost against functionality by offering the following benefits. " High scalability and performance making it suitable for enterprise-scale deployments. " Highly reliable due to extensive testing, provided by its open source background and adherence to standards. " Low-cost migration and compatibility with Oracle reduces the barriers to adoption. " Significantly reduced license and support fees in comparison to the major vendors alternatives. The result is that EnterpriseDB is very well placed to take advantage of the 20% annual growth in use of Open Source databases as they increase their share of the relational database market and offer reduced risk and better support to those considering a move to open systems. Those that make the move from Oracle will always have a way to return and this further eliminates any perceived risks in moving to EnterpriseDB. It is equally well placed to provide the database for the large number of new applications being created, particularly those using standard functionality and where the opportunity to scale would be regarded as an additional benefit. The main driver for the increased use of open source code in all its forms, but databases in particular, is based on a reduced Total Cost of Ownership (TCO). The licensing and support of open source databases is markedly different from that favoured by the closed-code vendors who usually charge a single-perpetual license for each instance and additional annual maintenance and support. The open source approach is based on annual subscriptions for any additional proprietary features and support with no initial perpetual licence and with the core open source code base being free to use. In EnterpriseDB s case the total cost for this subscription-based licensing and support is around 20% of that charged by mainstream vendors taken over a five-year period and it is this compelling potential saving in cost that is driving customers to migrate to EnterpriseDB. Untitled Documentwww.butlergroup.com Market Review Paper Butler Direct Limited EnterpriseDB Executive Summary 3 It would be very wrong to see EnterpriseDB as a traditional open source provider. Although EnterpriseDB is now the main supporter of the PostgreSQL community with many of its leading advocates being employees of EnterpriseDB with a commitment to pass back improvements it makes to the core code into the community EnterpriseDB is a commercial corporation offering enterprise-class software and a high level of support. The support can be 24 X 7 for mission-critical applications and is offered on both the Enterprise implementations of EnterpriseDB and also as a separate service for users of the PostgreSQL database a service it provides to SUN who ships the open source code with installations of its Solaris operating system. Code maintenance and upgrades for EnterpriseDB are supported through an on-line networked service that delivers automated updates and management. The PostgreSQL community is the largest and most thriving open source community in the world. It maintains a very high degree of quality and testing and extends the capabilities of its code base at each new release to make it applicable to the enterprise market needs for high performance and reliability. The fact that EnterpriseDB has been a recent arrival to the market means that it does not yet have the large user base of some other open source vendors, and that it currently has relatively few war stories , supporting case studies and benchmarks to support some of its claimed performance and scalability metrics. Nevertheless there are some very strong endorsements of EnterpriseDB from companies such as Vonage and Sony Online Entertainment (SOE) that are moving potentially hundreds of databases over to EnterpriseDB. SOE in particular has undertaken extensive-performance testing and states that in its experience, EnterpriseDB is overall comparable in performance with Oracle . Sony has also stated that the reduced license costs of EnterpriseDB has made it feasible to create another five on-line multi-user games that will require hundreds of database instances worldwide and that would have been prohibitively expensive if using Oracle. EnterpriseDB s approach to the market has so far been mainly direct as it builds its reputation and supporting evidence of its ability to replace Oracle in mission-critical large scale applications support. It is being assisted by relationships with Red Hat and JBoss who are working together to bring joint offerings to the market, and is keen to develop partner relationships with the major system integrators and applications vendors who stand to benefit significantly by offering their solutions on a database with lower TCO. The commercial world is clearly embracing a move to open source solutions. An EU Government study in 2006 showed that 45% of companies that they questioned had either implemented open source solutions or were considering doing so. Butler Group believes that the move to open source solutions or those with an open source core is unstoppable, particularly for software that can be considered a commodity. EnterpriseDB is cleverly positioned to take advantage of the general increase in the need for enterprise-scale databases as well as the increased adoption of those based on open source code. Among other commercial drivers that work in EnterpriseDB s favour is the increasing move to software as a service (SaaS). This model supports subscription-based pricing favoured by the Public Sector. Governments have also realised that the adoption of open source solutions reduces reliance on proprietary vendors solutions and may even assist in the retention of intellectual property that is not linked to proprietary platforms, as well as the obvious cost savings that result from its adoption. The challenges facing EnterpriseDB are probably greater from the organisational and growth management perspective than from any competitive threat. Although there are many other databases that might potentially compete for the enterprise market that are based on open source code, there are as yet none that have made compatibility with Oracle the mainstay of their approach. In the medium term this will be a major advantage to EnterpriseDB. As the company starts to target other databases such as Microsoft SQL Server offering similar ease-of-migration for applications, then it might get a greater degree of negative attention from such major vendors. As yet however, EnterpriseDB does not seem to regard them as a significant threat, although as it wins more business from the likes of Oracle, perhaps it should be more concerned. In conclusion, this Market Review states that EnterpriseDB is still an early-stage company with a great deal of growing to do if it is to meet the market opportunity and be highly successful. It has good backing, an excellent pedigree, and the support of a very large and experienced open source community behind it. Butler Group will want to monitor progress closely to see how smoothly the transition to EnterpriseDB is for mainstream application vendors as well as the end-user enterprises that previously ran their solutions on Oracle. If these transitions are as painless as they are cost effective, then EnterpriseDB must be in an extremely good position to establish itself as a serious alternative RDBMS vendor, and Butler Group believes that they have a high chance of success in achieving this goal. 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