Oracle's 'gun to the head' licensing: if I were them I'd do the same, says Linux Foundation board director

But they won't be able to do it for ever, says Frank Fanzilli of EnterpriseDB

There are some big changes going on in the once staid world of databases. Take for example, Microsoft's recent decision to offer SQL Server for free (with caveats) in what appears to be a blatant attempt to win over Oracle customers. Microsoft is also porting its enterprise database to Linux. Then there is the rise of NoSQL databases such as MongoDB, Apache Cassandra and Couchbase, and the Hadoop big data storage platform and ecosystem, almost all elements of which are open-source. Older open-source SQL databases are finding new audiences too, including MySQL (and its recent fork MariaDB), and PostgreSQL, which dates back to 1997.

Behind all this activity lies a number of factors. One is the growing acceptance of open-source as a valid alternative to proprietary software - a trail that was blazed by Linux. This is happening both in enterprises and in government, where initiatives aimed at cutting costs frequently recommend taking the open road, giving open-source databases more of a look in.

Another factor is the arrival of new use cases that fall outside of the relational model, which is where the likes of MongoDB have found their niche. Then there changes in hardware, with cheaper Flash memory in particular popularising in-memory processing by SAP HANA and Oracle DB and also smaller specialist players such as EXASOL.

And then there is cloud. Cloud is changing the rules for databases because it is enabling organisations to deploy applications in a different way, says Frank Fanzilli, independent board director at PostgreSQL vendor EnterpriseDB (EDB) and board director of the Linux Foundation.

"Cloud is key but not because it's cloud," he says. "People don't rip and replace that much. However, what the cloud does is it forces the move. It is like an avalanche. People are moving to cloud for all sorts of reasons, among them significant reductions in the cost of computing."

When organisations embrace cloud computing they tend to make other changes too, changes that they would not have considered otherwise: "Most people will not take a perfectly good Oracle database and say I'm going to convert to Postgres. There's too much risk, it's heart surgery. And after all they have a business to run every day."

Fanzilli, former global CIO at Credit Suisse First Boston, says that since the 2008 crash banks have been adopting open-source software, particularly Linux, in a bid to cut costs. He claims that enterprises could save 90 per cent on the cost of proprietary licensing if they were to move away from the big players and onto an open-source alternative like EDB. With cloud allowing increased portability of enterprise applications, such cost savings are now tenable.

"You have have a two-pronged approach, you can save on the cloud and also save on your relational database. You can build this is into your architecture much more easily."

The cloud architecture favours a more open, multi-vendor approach, with interconnection between databases, Fanzilli says.

"When we engage a participant its typically for a new application or a significant change in role in an existing application, for example to connect to other databases and use this as a hub. This is something that the majors intrinsically don't want you to do."

"Gun to the head" strategy

The open-source model is different from the proprietary one in many respects. One of these is that it's much harder to make a living. The SAPs, Oracles and Microsofts of the world have amassed huge war chests with which they are continuing to control the new world the best they can. In the meantime their oft-criticised licensing models continue to generate an income that open-source firms can only dream of. But like Phil Pavitt, CIO of Specsavers, who accused Oracle of deploying a "gun to the head" strategy around licensing, Fanzilli believes that any change will be slow.

"If I were on the board of Oracle I don't know if I'd do anything different. Many books have been written about creative destruction. What do you do? You have a very substantial business on very substantial proprietarty software which everybody uses and you can now exploit the cashflow. What would one do? They say 'we've made a huge investment over the past decade and we want to see a return'. At the board level those are the kind of decisions you're facing."

Fanzilli continues: "Where that falls down is where you get a bunch of frustrated customers and they start to look at alternatives. I don't know when that occurs. Eventually they become less relevant but Oracle is nowhere near that because they're one of the giants."

However, history has shown that open-source can drive change quicker than anyone thought.

"Years ago there were all these flavours of Unix out there like AIX, SCO and HP-UX and they were all good operating systems, but they tied you into a certain box. A number of things, including Linux, changed that whole game."

Something similar is happening with databases, Fanzilli believes.