Jul 26, 2013 (07:07 AM EDT)
Feds Move To Open Source Databases Pressures Oracle
Read the Original Article at InformationWeek
A glimpse of that migration can be seen at companies such as EnterpriseDB, which provides open source PostgreSQL-derived database management products and services. Company executives said the number of government agencies in their customer base has risen by 40% over the past year as the chronic budget battles in Congress, and the fallout from sequestration, portend that deep cost-cutting may become a long-term reality.
"The pressure to cut costs is clearly the most important topic of discussion in government," said EnterpriseDB CEO Ed Boyajian. "Databases happen to be one of the most expensive -- if not the most expensive -- line items in the software budget for most government agencies." More than 40 federal agencies have deployed EnterpriseDB's products, he said.
Among departments and agencies that have adopted Postgres Plus, EnterpriseDB's feature-rich, commercial version of the open source PostgreSQL technology, are the Federal Aviation Administration, NASA, the State Department, the Labor Department and organizations throughout the Department of Defense (DOD).
DOD has a long history with Postgres, as it is commonly called, which evolved from a project originally funded in part in the mid-1980s by the department's Defense Advanced Research Projects Agency (DARPA).
[ Want to know what DARPA is doing now? See DARPA Robot Challenge: Disaster Recovery. ]
Moving to open source software can help agencies slice database costs by as much as 80% because open source providers aren't hamstrung by the conventional business and licensing practices employed by large database companies such as Oracle, IBM, Microsoft and Sybase, according to Boyajian.
"The traditional, burdensome licensing practices of the big proprietary guys have really started to put new kinds of pressure on government agencies," he said. "Most of the licensing firms have come up with very inventive ways to make sure the price per year goes up and not down, and that's in direct conflict with the way government agencies are trying to operate now."
In contrast, open source providers such as EnterpriseDB can offer customers lower price points and a more flexible cost structure based on various subscription levels, he said.
"The fact is that Oracle and others have been able to charge exorbitantly high prices through a system of historical pricing practices that's just stuck for a long time," he said, "but that time has come to an end. We can deliver an extraordinarily good product at a fraction of the cost, partly due to open source and partly due to business practices that are not encumbered by big cost infrastructures and weighty business models that would force us to continue to raise prices in the way that the competitors do."
Peter Doolan, group VP and chief technologist for Oracle's public sector business, agreed that there is "a strong awareness of open source" across the government space.
"There has been an open source strategy from [the Office of Management and Budget, or OMB] for some time [which was] then followed by a cloud-first strategy," he said. "We at Oracle have a lot of open source initiatives ourselves." He noted that Oracle open source database products such as MySQL and Berkeley DB "are examples where we really have embraced that open source community concept and the open source business model that also goes with it."
However, he also contended that federal database customers are looking for a blend of businesses and technologies to support their database operations. "If you were to look at the Postgres example ... that company is a great company that provides one business model and a small number of products," he said.
Despite the highly competitive database market, Oracle continues to grow its business inside the federal government, Doolan said. "It shows that in many cases the federal customers that we deal with are modernizing a lot of systems and those systems in many cases are old legacy systems," he said. "This has posed a great opportunity for all vendors with modern technologies to participate."
Clearly, another factor driving government agencies in the direction of open source database platforms is the Federal Data Center Consolidation Initiative. The OMB has set a target of closing 40% of the government's non-core data centers by the end of 2015.
Consolidating data centers inevitably means assessing how to consolidate the applications that run on them, and the licensing costs that go with that.
"In the process of this change, it reopens basic architectural decisions that government has made and it's a perfect opportunity to begin to change the pattern of software decision making and acquisition," Boyajian said.
Oracle's Doolan noted, though, that government customers aren't just looking for a company to replace one system with another simply as a tactical move. They're looking for the longevity that comes with the veteran players in the market, he said.
"They're looking for a vendor who has the infrastructure to support their mission for five or 10 years," he said. "Hopefully, that's the value we bring to the table for our customers; I certainly know that we're committed to our customers in the government space. We've been here for a very long time and expect to be here for a very long time in the future."
The new budget realities of sequestration, however, are continuing to put intense pressures on agencies, said Loren Osborn, EnterpriseDB's director for government.
"Sequestration has been very beneficial to the open source market because agencies are looking for creative ways to save money," he said.
The collateral effect, however, is that it's also forcing big software players to take a harder look at integrating their products with open source platforms.