Tuesday, January 30, 2007

The disruptive power of open source

Zack Urlocker, from MySQL, an open source database developer, called my attention to his blog, where he has been discussing the open source business model as disruptive to traditional software license vendors.

His first post is a good basic explanation of the definition of a disruptive technology.
What makes something disruptive is making it more convenient, simpler, more flexible and sometimes, making it cheaper. Often, for a business to be disruptive it requires a different business model. Sometimes the business model itself is the source of the innovation. The idea of getting DVDs in the mail may not seem radical today; but if you're Blockbuster and you've built your entire revenue on thousands of retail stores, its hard to wrap your head around using a web site to send DVDs out by mail.
In his second post, he goes on to discuss disruption in the software industry, specifically. I agree with everything Zack as written, but I found his comments regarding MySQL, specifically, to be noteworthy:
[MySQL] gets deployed on a lot of niche applications, like web sites, ecommerce, data warehousing, reporting, custom applications and telecommunications infrastructure. And those niches are growing faster than the rest of the database industry.

Typically, MySQL does not replace the existing legacy databases in organizations. In fact, many of our customers are also users of Oracle, SQL Server and DB2. But they use them in different areas. As Charles Phillips from Oracle said a while back: Oracle and MySQL are both in the transportation business. But Oracle is a 747 and MySQL is a Toyota.
He goes on to discuss some specific innovations taking place now at MySQL:
At MySQL, we have long focused on using disruption as a way to make our customers' lives easier. The first stage focused on making developers' lives easier with a no-nonsense database that was easy to use, reliable and fast. The second stage was the introduction of MySQL Enterprise and the Monitoring & Advisory service that makes the DBA's life easier. And now the third stage is to make the IT Buyer's life easier. We are doing that by announcing today something we call MySQL Enterprise Unlimited.

For $40K (the price of a single CPU of Oracle) you can get an enterprise wide use of MySQL Enterprise, with production 24x7 support and unlimited use of the MySQL Network Monitoring & Advisory Service for a year. For customers that are used to spending $1 million or more on closed source licenses, this is a heckuva good deal.
It will be interesting to see how the major software vendors, such as Oracle, view MySQL's further incursions into the enterprise space. One of the characteristics that Zack doesn't mention is that incumbent providers typically don't take the threat of disruptive providers seriously. At first, their technology is viewed as primitive, or even as a toy (think of the Radio Shack TRS-80 PC that first started popping up here and there in corporate settings). The disruptive technology, at first, is only of interest at the low end of the market, the segment that the incumbent vendor has the most difficult time servicing and is the least profitable. But over time, as the disruptive technology improves, it begins to move up-market, eating into the segments where the incumbent vendor really makes money. This has certainly been the case with Linux, which at first was viewed as a hobbyist operating system and now runs enterprise applications. The same thing, hopefully, may be happening with MySQL.

Zack makes good points. (His blog is also a good example of what other software vendors--open source or traditional--should be doing with blogs to better communicate with their customers and the general technology community. Tone down the PR-speak, and just talk to people.)

Related posts
Oracle plans free version of database
Oracle bid for Innobase a threat to MySQL?
Why organizations choose open source software
Key advantage of open source is NOT cost savings
Open source: turning software sales and marketing upside down

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