Incidental Contemplations

Matt Assay has a couple of blog posts dealing with PostgreSQL v MySQL and Billion-dollar open-source opportunities . Both are typically good informative posts in themselves, but their juxtaposition provides added meaning for me given I hold PostgreSQL/PostGIS dear.

As a keen user of PostgreSQL (driven by PostGIS, the spatial extentions to postgreSQL) I’ve always been keenly interested in the ongoing viability of it, both as a project and as a solution in business. I’ve often wished it was GPL’d rather than BSD’d, as GPL projects on the whole (in my experience) tend to have much more active and vibrant communities. That’s not firm and fast though. There’s plenty of exceptions. Matt compared the popularity of MySQL against PostgreSQL, and noted what looks like a more active community with PostgreSQL (ok, there’s an exception right away), and implicitly wonders if EnterpriseDB may get gobbled up the same way MySQL did. Given MySQL has the LAMP mind and market share going for it, the valuation wouldn’t be anything like the $1B MySQL got, but surely the possibility of acquisition has to be on the cards. After all, Matt’s Billion dollar post confirmed the healthy market for open source companies.

When it comes to takeovers and valuations, I think the role of GPL as a strategic weapon is often under appreciated. If you’re top vendor dog in a GPL project, other players have a very hard time unseating you. That may sound counter-intuitive given world + dog has the code, but I don’t believe it’s such an advantage for competitors as most assume. Your lesser competitors in the same space have to share their plum developments with you. Sure, the top dog has to share his plums too, but when you’ve got the top plum growers in your own yard (to push a metaphor too far), you get to go to market with the best solutions first. If you can keep your plum growers happy, and can do your business execution right, you’re in a very strong position.

With BSD projects on the other hand, solution providers tend to go to market with proprietary solutions. You can’t force your competitors to share their plums. You don’t share your own (at least, not till they’re getting a bit old and withered). The competitive maneuvering follows a more traditional proprietary model. Being top dog doesn’t stop the competition accruing some distinct proprietary advantage. Sure, it’s rarely easy winning from behind, but if you’re a second tier vendor and have to give away your best produce to the market leader when you go to market (like with GPL’d projects) surely it’s so much harder again.

If you had a choice between taking on MySQL (company, pre-takeover) in the MySQL (software) space or EnterpriseDB in the PostgreSQL space, I suspect it would be much easier to take on EnterpriseDB, purely because of that ability to accrue proprietary value. Surely that has an adverse effect on the valuation of EnterpriseDB as opposed to MySQL?

If I’m right, GPL’ing your open source code (rather than BSD’ing it) is the smart move for commercial leaders in an open source project. It advantages you more than your commercial competitors, putting you at a relative advantage. It also helps to create a vital ecosystem around your technology by forcing enhancements out in the open. Maybe EnterpriseDB isn’t such a good acquisition target after all.  Despite backing an open source product, perhaps it looks more like a proprietary company in terms of market valuation and being able to leverage that open source connection. In which case, it’s one more reason I wish PostgreSQL was GPL’d. A strong leading vendor adds a lot to a good open source project.

This entry was posted on Wednesday, February 27th, 2008 at 9:47 pm and is filed under bsd, enterprise, gpl, mysql, postgresql. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.