Feds Move To Open Source Databases Pressures Oracle
Cost-conscious federal agencies move to open source choices, pressuring Oracle, IBM, Microsoft and Sybase to refine products, licensing agreements.
5 Helpful Online Services From Uncle Sam
(click image for larger view)
Under implacable pressure to slash spending, government agencies are increasingly embracing open source, object-relational database software at the expense of costly, proprietary database platforms. That's putting new pressure on traditional enterprise software providers, including Oracle, to refine their product lineups as well as their licensing arrangements.
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).
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."
. We've got a management crisis right now, and we've also got an engagement crisis. Could the two be linked? Tune in for the next installment of IT Life Radio, Wednesday May 20th at 3PM ET to find out.