Earlier today, David Meyer reported: Google allows bigger, faster Cloud SQL databases. Two things stand out for me:
- Uplifting the maximum size of database from 10GB to 100GB. This puts it on par with Amazon.
- Google is providing customers with the option of hosting in the US or EU. This solves a vexing problem related to the potential impact of the Patriot Act and continuing concerns regarding data location. On this last point we will have to see the precise Ts&Cs to be certain but if Google delivers on the top line announcement then it is a smart, if long awaited move.
Peter Goldmacher, investment analyst at Cowen & Co puts a different spin on it, referencing the potential to damage Oracle's ability to grow its database business.
Although Oracle owns the commercial release of MySQL, we believe the increasing adoption of open source MySQL over the last several years has pressured Oracle's core database business (less than 2% average organic license revenue growth in constant currency over the last four years).
Over this time, we believe open source MySQL experience in large record-based data sets was cultivated in a broadening development community from its use both on premise or hosted on Amazon. We believe Google incrementally accelerates the adoption of open source MySQL by offering a price-competitive alternative to Amazon MySQL ($98.33/month for 100 GB) to its development tool customer base, which includes Best Buy and Ford. Furthermore, Google uses the open source version of MySQL and Oracle therefore does not benefit from adoption of Cloud SQL.
Over the next several years, we believe increasing development expertise, improving MySQL functionality, and the vastly lower startup costs offered by hosted offerings from Google, Microsoft and Amazon will continue to pressure Oracle's enterprise database offerings. For reference, a 100 GB on premise Oracle configuration today lists at nearly $100K for the license with $20K in annual support fees. This price does not include hardware cost.
When you see price comparisons of this kind, the obvious question has to be: why wouldn't you go with Google/Amazon? DBAs will come up with a myriad of reasons and it should not surprise that Oracle continues to quietly resist public cloud deployments. The naming of Best Buy and Ford does not go un-noticed. These are huge brand names that no doubt will be the subject of many a case study and CTO/CIO discussion.
Oracle is in something of a bind here. On the one hand it has worked assiduously to protect its database franchise, keeping customers captive via its own applications and engineered systems play. On the other hand, open source MySQL is one of the LAMP stack planks upon which the Internet is built. Its commercial MySQL offering starting cost may seem like a rounding error when thinking of enterprise IT costs but then Oracle's customer relationships are hardly the best. I routinely meet customers who would like nothing better than to get off Oracle as they feel bilked at every turn. Most recently I notice that Coca Cola Bottling Co Consolidate migrated from Oracle DB to IBM DB2 for savings of more than $1 million. More noticeable:
“When we were on Oracle, our philosophy was that we did not upgrade unless we were doing a major SAP upgrade. If the version was stable, then we stayed on it. Now, with IBM DB2 our strategy has completely changed, because with every new release our performance keeps getting better and better, and the value of the solution continues to grow.”
But what of IBM and SAP?
IBMs DB2 remains an important part of Big Blue's business. When SAP announced HANA as a database alternative to others, there was concern that SAP would try migrate DB2 customers. That has not happened. My sense is that DB2 is better loved by customers who fondly dust down their old AS/400 machines once a year. However, IBM is equally aware that its business needs to change. If you haven't noticed, IBM has been steadily acquiring software businesses. Guess what they'll be running on?
And then there is SAP. Right now, if you are an SAP customer that acquires an Oracle license through SAP then you're in for 11% of the license cost per annum. The extent to which the Oracle tax can be avoided as and when SAP releases the Business Suite on HANA is yet to be revealed but I cannot see the company offering like for like pricing. SAP knows that the knock on effect of having the Business Suite running on HANA will be to serve as a commoditising influence on HANA. This is a strong reason why SAP needs developers bringing entirely new applications based upon the combination of HANA as a high spped database and HANA's developer environment.
Regardless of your database preferences, the fact both Google and Amazon offer instances at such low prices is a surefire indicator this market is commoditising. Then there is the creeping effect of newer open source databases that address the need for high speed analytics. When Workday mentioned that it is devleoping on Basho Riak there was a collective and audible gasp among analysts.
It would be foolish to think there will be a mass stampede to the open source door or wholesale switching among vendors. But as the spending cycle turns, we can expect to see more disruption in database land.