Eye on Oracle

Oct 27 2009   9:51PM GMT

Red Hat-EnterpriseDB deal could affect Oracle’s open source fortunes

Ed Scannell Ed Scannell Profile: Ed Scannell

With Red Hat making a $19 million investment in EnterpriseDB earlier this week, competition in the open source database market figures to get a little more interesting. While the European Commission (EC) and Oracle grapple over whether it is in the best interest of the market for the latter to take ownership of MySQL, Red Hat is clearly not waiting for that decision to make its move.

Red Hat officials hardly drew a detailed product roadmap for what they might do with Enterprise DB’s Postgres-based database (like putting together a software stack with Enterprise Linux, JBoss and KVM to go after Oracle at the low end perhaps) at this week’s announcement.  More importantly, Red Hat’s investment signals its belief that maybe the open source database market could be the next big opportunity in software.

A nice byproduct of the Red Hat-EnterpriseDB deal is if the EC does finally write off on the Oracle-MySQL deal, Oracle would have a legitimate competitor that could prevent it from completely dominating the open source database market. Not that the Red Hat-EnterpriseDB partnership would cause a mass migration away from MySQL either.

For now, officials from both companies see a good fit going forward. Enterprise DB has established itself as one of the leading supporters of PostgresSQL database, announcing in 2005 it planned to make proprietary products based on the product. Red Hat is hardly unfamiliar with Postgres as it has bundled the product with every copy of Red Hat Enterprise Linux for some time. Red Hat is also moving its Linux-based Network Satellite to PostgresSQL and away from Oracle.

Each company also shares the same view on how to sell its products. “EnterpriseDB is also working to create customer value through a subscription support model.  Clearly, this is a model we see as beneficial,” said Jim Whitehurst, CEO of Red Hat said earlier this week.

And if both companies eventually do put together a software stack that takes on Oracle, both Red Hat and EnterpriseDB, particularly the latter, would benefit from Red Hat’s larger sales organization and network of resellers.

If the EC forces Oracle to sell off MySQL in order for the Sun acquisition to be approved, the Red Hat-Enterprise DB deal could take on even larger significance.  Any third party that MySQL ends up in the hands of almost assuredly would be less powerful and influential than Oracle (I just can’t see IBM, Microsoft or SAP jumping in here because of either a lack of strategic interest or government intervention), meaning the newly formed partnership would have a better chance to grab market share.

If the EC rules against Oracle holding on to MySQL, the loser here could be Oracle. Redwood Shores would lose a golden opportunity to own one of the premiere products in the open source market – a market that figures to grow bigger not smaller over the next few years – as well as have its proprietary database business come under pressure from Red Hat and the new owners of MySQL.

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