The days when open source vendors fought for enterprise acceptance are long gone. Now open source is a mandate in many companies, and its vendors have to fight for market share against offerings from software mega vendors.
MariaDB and CEO Michael Howard have served as agents of this open source sea change. From his early days at Oracle to his position at the helm of an open source leader, Howard commands a keen understanding of what his customers need. Case in point? Last month’s release of MariaDB’s TX 3.0: A fully equipped open source database with advanced enterprise-level capabilities that until now, only arrived in proprietary solutions.
I spoke with Howard about the open source mandate proliferating in major enterprises, the strategy for battling tech titans, and the power of a global development organization.
M.R. Rangaswami: How has the open source proposition evolved for enterprises over the past decade?
Michael Howard: If you go back ten years, few CIOs would say, “Thou shalt buy open source.” Open source used to be a bottom-up decision. Developers brought in open source for one part of the stack because it was free, built applications around it, and bought service and support for it. Open source became a viral mechanism that propagated itself because of its success and functionality.
Today, everything has changed. Open source adoption is at an all-time high and it will continue to grow because of a new “top-down” strategic mandate: CIOs, CEOs, even corporate boards and regulation-heavy industries like banking are pushing for enterprise technology organizations to innovate using open source.
There are two big-ticket reasons for the mandate. First, in many industries, margins are low, competition is high and every cent counts. If you compare the economics, whether on initial price or total cost of ownership, the open source advantage is unambiguous – it is a 5x, 6x, 10x, 20x, 30x, or even 40x savings for the same functionality or better. Wall Street knows proprietary software makers charge millions of dollars for their products and that cost can impact the enterprise’s bottom line.
Second, the very structure of business is changing. F3000 companies are trying to be as nimble as possible. The major software vendors of the past cannot respond to customer needs as quickly as necessary for today’s buyer. It’s like buying a Hummer: They sell you a really robust set of functions to go all-terrain at a really high price, but it’s not what people really need and driving such a gas guzzler is too embarrassing for most customers these days.
These changes in mindset combined with enterprise-class solutions have pushed MariaDB to take off and do extremely well globally.
M.R.: How does this affect MariaDB’s sales strategy?
Michael: We are in a “David-and-Goliath” fight where we don’t have the economics to wage war on the major players. I like to think of our strategy as a judo match: We have to use the inertia of our opponents to win.
We have the open source community on our side. These customers can tell what’s real and what’s fake in terms of an open source offering. Some vendors throw something out as Apache but if no one is contributing to the code, they know it is fake. Big players have taken advantage of open source code but never paid it back. Others major vendors have tried an “open core”-type product with a mix of proprietary and open code without success.
MariaDB is clearly, real open source. But even with us, we had to overcome some backlash against our license. The reality is that we have to operate using a business model that allows us to put dollars into our products and do it efficiently. We developed a business source license where customers buy MariaDB for the three years and abide by the license. After that, they can self-support and quit paying.
Just six months after debuting the license, the open source community accepted us as the ideal, poetic balance between closed and open source. Now MariaDB runs on every Linux distribution and every major platform in the cloud. We have partnerships with the biggest companies in the world. We’ve put MariaDB in enterprises and we’ve given back to the community. Our ubiquity has made us a “safe” choice for enterprise buyers.
M.R.: MariaDB is dual-headquartered in Menlo Park, California, and Helsinki, Finland, with investors, users, and partners from all over the globe. What are some of the challenges and benefits of building a global company?
Michael: Having a distributed company has pros and cons. On the “pro” side, we look at the housing crunch in the Silicon Valley and understand that having a distributed workforce really helps our employees. Right now, for example, it is enormously difficult and expensive to start a family in the Silicon Valley. We have bright people living in places where they can work and live more economically. We can add great talent regardless of their location.
In hiring around the globe, we achieve a more diverse group of employees. We are not relegated to whatever homogenous classes of people that are highly concentrated near our headquarters.
On the “con” side, it is great to walk down the hallway and say “Hello” to coworkers and talk about a challenge or write a press release together and you can’t always do that with a distributed workforce. The connective tissue between people gets weakened.
Though the world hasn’t yet come up with perfect ways to overcome this distance, tech companies are trying. We use Zoom, Slack, “town halls,” all-hands meetings, and even a roving Beam robot that allows us to see faces and hear bits of conversations so we feel closer together. The ad hoc nature of coworker interaction is difficult to mimic in a distributed world but we have deployed the best solutions and experienced great success.
M.R. Rangaswami is co-founder of Sand Hill Group and publisher of SandHill.com.