IBM Invests In Open Source EnterpriseDB

EnterpriseDB, the startup that commercializes the PostgreSQL database, announced today an additional $10 million in venture capital financing. But it's not the dollar amount that counts.

Maybe it's just coincidence, but four weeks after Sun Microsystems locked up the open source MySQL database system, IBM has decided to become one of four investors in EnterpriseDB.

Normally, IBM doesn't invest in startup companies. It has a venture capital arm, the IBM Venture Capital Group, but that group's job is to watch for promising startups, advise venture capital firms on which technologies are the most promising, and recommend to corporate headquarters which companies are the best acquisition targets.

So why did IBM join Charles River Ventures, Fidelity Ventures, and Valhalla Partners in investing in EnterpriseDB?

"IBM has got most of the open source stack in line," said Andy Astor, CEO of EnterpriseDB. "It's got an open source operating system [Linux], an open source Web server [Apache], and an open source application server [Apache Geronimo, the basis for WebSphere Community Edition]," he said in an interview. If it wants a database to add to that line-up, it can't target MySQL without falling into line behind MySQL's new owner, Sun Microsystems. But IBM can support EnterpriseDB because "IBM views us as enterprise ready," Astor said.

Another way of viewing EnterpriseDB is as a potential thorn in the side of Oracle, IBM's chief competitor in the database market. Astor bills EnterpriseDB as the only "Oracle-compatible" database on the market. EnterpriseDB supports use of Oracle's version of SQL, PL/SQL, so applications written for Oracle run with little modification on EnterpriseDB.

EnterpriseDB points to FTD Florists as an example of a firm that has displaced its Oracle database reporting systems with EnterpriseDB.

IBM's Inna Kuznetsova, director of IBM's Linux strategy, said only that IBM "has a long history of supporting open source initiatives, including Linux, Apache, and Eclipse," in a statement accompanying EnterpriseDB's announcement.

IBM developed the Eclipse programmer's workbench internally before donating it as open source code, a move that IBM once placed a value of $40 million. But none of those prior forms of open source support included investing in a commercial company, while its support for PostgreSQL does.

No details of IBM's share of the $10 million were given other than Astor's comment that IBM "took a minority role in the C series." IBM has previously joined the Linux Foundation, paying annual dues to support Linux enterprise use. It's early backing of the Apache Web server as a viable product helped move it into a market leading position.

EnterpriseDB has garnered a total of $37.5 million in three rounds of venture capital funding. The firm employs the PostgreSQL open source project's lead integrator, Bruce Momjian, as a database architect. It has contributed performance enhancing features to PostgreSQL and added prominent PostgreSQL community members Heikki Linnakangas and Pavan Deolasee to its payroll in 2007, along with previously employing four other database programmers who work on the project.

The PostgreSQL community has ensured ANSI standard SQL compliance in recent releases, along with enhanced transaction throughput performance. Both are considered enteprise operational qualities that some open source databases have fallen short on in the past.