I have looked at a number of open source projects over the last year and mostly agree with Bill Burnham’s comments that many of these open source plays are "marketing gimmics for startup companies." Many of these companies are trying to start a new project from scratch, hoping to build a community brick by brick. In addition, without the ability to create a community, it is hard to build a real sustainable revenue model. Finally, open source does not matter if there is no customer need for the solution. That being said, I am quite excited about the relaunch of one of my portfolio companies, GreenPlum, which is bringing the power of open source to enterprise business intelligence. (Stop reading if you are not interested in a pitch for a portfolio company)
Quite simply, Greenplum is using an open source database optimized with supercomputing architecture to bring terabyte scale datawarehousing to enterprises. Leveraging this architecture, Greenplum will be able to offer significant price performance benefits over existing BIG IRON solutions. In addition, Greenplum is working with Josh Berkus and the PostgreSQL community to launch a new project, Bizgres, whose goal is to build a complete database system for BI exclusively from free software. From a business perspective, what I like about our strategy is that we are building off an already existing and strong community of PostgreSQL developers. Secondly, rather than pursue a broad platform play for all databases, we are focusing on a large but focused market in BI. We believe this is a great way for open source to enter the enterprise as the market is riddled with expensive solutions, BI is a top 3 initiative in most enterprises, data is growing like a weed in most places, and because we are not asking CIOs to bet their transaction systems on open source. Finally, our revenue model is not based fully on a support/service play. The open source DeepGreen product will target small-medium sized businesses or anyone with data marts and reporting apps in the 10-300 gigabyte range. GreenPlum will sell licenses for any company that wants to to deploy the DeepGreen MPP product to scale to multi-terabyte environments. While it is yet another spin on open source, I am quite excited about what GreenPlum is doing and truly hope that by leveraging the success of PostgreSQL, staying focused on a targeted market, and employing a dual license model that the company will be able to rise above the noise. As I have mentioned in a previous post, one of the clear benefits of open source, especially if you leverage an existing community, is to reduce the friction in the sales and marketing process.