Tuesday, May 1, 2007

An Abbreviated History of EnterpriseDB

Back in March 2004, my long-time friend and colleague Denis Lussier asked himself a couple of simple questions: Why are databases incompatible with each other? What allows the Big Three (Oracle, Microsoft, and IBM) to remain an unchallenged oligopoly, controlling 87% of the enterprise database market? Why have standards produced essentially no beneficial impact on this market? Over the next few months, Denis explored these issues with a few colleagues, and the idea of a compatible database began to emerge; in other words, a single, affordable database that could "speak the language" of one or more of The Big Three.

By early summer, I got involved in the analysis, and became really excited by the prospect of creating a disruptive entry in the enterprise database market that could truly impact the market.

Now, enterprise databases take hundreds or thousands of staff-years to create. Creating one from scratch was impractical, to say the least. We needed a starting point, and open source databases were the obvious place to look. We evaluated many starting points, including MySQL, HypersonicSQL, Ingres, Firebird, MaxDB, PostgreSQL, and others. To put it simply, PostgreSQL was the clear winner, hands-down. MySQL was designed for fast, easy, mostly read-only applications (at the time, it didn’t even support views or stored procedures). Firebird was a reasonably good choice, but had some “interesting” licensing twists. Ingres had been more or less abandoned by CA for 12 years, and MaxDB had virtually no market acceptance. PostgreSQL, on the other hand, was a world-class database, had a strong and vibrant community, and it had an architecture that supported pluggable stored procedures. This meant that we would be able to add stored procedure languages with relatively low risk.

Another important advantage to PostgreSQL is that it is licensed under the BSD open source license. As many readers know, there are two fundamental open source license types: Academic and GPL-style. Academic licenses — such as the BSD — have been around the longest, and basically say, “Here’s the code. Do what you wish.” Academic licenses impose no practical restrictions on one’s use of the source code. GPL-style licenses, on the other hand, carry the “viral” attribute of requiring all derivative works to carry the same license. Our preference was to have the flexibility to design our business as we chose, and the BSD license suited us better than the GPL. (Of course, the use of any open source carries with it certain ethical imperatives, such as community support. I will deal with that issue in another blog entry.)

By September of 2004, PostgreSQL was our clear choice, and it was time to develop a business plan. Having prototyped various solutions over the summer, we had developed an appreciation for the complexity of creating deep compatibility with an existing database. We recognized that we had to pick a single strategy, and pursue it with focus. (Focus, I believe, is the single most important success factor for any start-up.) We elected to focus on Oracle compatibility, for two reasons. First, it’s the biggest market. Second, a great deal of dissatisfaction exists in its customer base.

In December, 2004 we completed a prototype and pursued our first outside funding; an angel round of $1 million. This funding allowed us to bring the product to v1.0 status, and to launch the company with a prudent marketing budget. We were very fortunate to tap awesome guidance and assistance during this phase from investors and friends, including Christian and Brian Danella at Prequent, Inc., Terry Hanold, Charlie Katz, Jack Lewis, Gary Long, and Phillip Merrick.

We emerged out of stealth mode on May 23, 2005, and received a lot of interest from the market, including some terrific press. Within a couple of weeks, we had thousands of downloads and strong interest from the venture capital (VC) community. We had originally planned to stay angel-funded through the end of 2005, but the VC interest was so strong that we elected to strike while the iron was hot. Within 3 months, we closed on a $7 million round with Charles River Ventures and Valhalla Partners, two high-quality firms that remain strong supporters today.

At about the same time as our venture funding (August, 2005), we took the product to LinuxWorld, and were honored to receive the Best Database Award, beating the other finalists, Oracle, MySQL, and DB2. In retrospect, this win — combined with the funding and tens of thousands of free downloads — marked our emergence into the marketplace. At that point, Denis (CTO) and I began filling key executive team positions, including Tom Stiling and Bruce Katz (sales and finance, respectively).

On January 1, 2006, we started selling EnterpriseDB. Until then, the product was mostly given away for free, as we endeavored to understand the needs of the market. By the end of the first quarter, we had 10 paying customers, including Sony Online Entertainment, the leading company in massively multi-player online role playing games, which planned to replace Oracle throughout its organization. This success brought even more market interest, both from new customers and from venture capital companies. As in 2005, we had planned to finish the year with our current funding, but pre-emptive interest from a few top-tier VC firms convinced us to do our next venture round a few months early, which brought Fidelity Ventures into the fold (another great VC firm). At the same time, we were very fortunate to attract Dave Litwack to the Board of Directors. Many of you will remember Dave as founder and president of Powersoft and as founder and CEO of Silverstream.

The rest of 2006 was a whirlwind. We rounded out the executive team with Garland Hall, Phil Weber, and Helen Donnelly (customer support and services, human resources, and marketing), won Best Database at LinuxWorld for the second year in a row, sold millions of dollars in software, helped customers solve hundreds of complex problems at a fraction of what they would otherwise have paid, expanded into Europe and Asia, and hired on some of the best enterprise software talent I’ve ever seen in one place.

And 2007 is shaping up to be a banner year as well. We recently passed the 100-customer mark, sales continue to increase significantly each quarter, and we have completed our executive team with the hiring of Bill Doyle and Gary Long (business development and product development). Lots more to come...

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