Recipe for Revenue

Red Hat hopes to exploit open source database market gap

Red Hat Inc., probably the most recognized name in open source among businesspeople, is getting into the database business. On July 18, it released Red Hat Database, based on the open source ORDBMS PostgresSQL.

Most enterprise-level proprietary databases have been ported to Linux and certified on various Linux distributions, including Red Hat Linux. Open source databases such as MySQL and PostgresSQL already run on Linux. And Red Hat sells a package that includes IBM DB2. So why the latest move?

Red Hat Database product manager Mike Evans said he identified a "gap" in the market. He said, "There are lots of users of open source who are using basic databases and as they try to move up to more robust transactions and object support and more sophisticated database technology, they have no option from a trusted supplier but to move up to a DB2 or Oracle on Linux." Those proprietary, enterprise-level DBMSs come with steep license fees, and are often "overkill in terms of features," Evans continued.

Evans also said the market share going to open source databases, a thin 2 percent, doesn't fulfill its potential. "I truly believe that lack of robust, credible vendors with broad services is the number-one inhibitor [of wider open source database adoption]," Evans added.

Credibility (certainly name recognition, at least) and services are Red Hat's recipe for revenue. In the open source world, you don't make money from software licenses. But training, support, and professional services are "value-adds" that can't be obtained for free.

Minimum support costs about $3,000. That's a fraction of what the big DBMSs cost for licenses alone. Various other levels of support, training, and consulting are available for considerably more money.

"We're not kidding ourselves and saying this database challenges Oracle, Teradata, or DB2," Evans admitted. But he added that in many department-level applications, RISC-based systems are being replaced with Intel-based systems running Linux; and that department projects are good opportunities for Red Hat Database to enter the large enterprise.

He thinks people will want to buy their OS, Web server, and database all from one vendor, who can back it up with reliable support and eliminate finger-pointing.

Joe McKendrick, an independent research consultant to the IT industry, recently conducted research for Evans Data Corp. about OS adoption trends, and confirmed Evans' premise about platform migration - with qualifications. "IT managers are getting more comfortable with Linux and other open source software," McKendrick concluded. Although only 2 percent of companies are major Linux shops, the last two years have shown a significant upward trend in Linux adoption in heterogeneous environments.

— Jeanette Burriesci

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