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JUNE 4, 2003
A Baby Database's Chance to Grow Up? [Page 2 of 2] NATURAL MOVE. The desire to make databases a commodity item has recently taken on more importance for SAP. Both Oracle and Microsoft are pushing hard to horn in on SAP's core market by selling their own versions of complicated business application software. Plus, new database license revenues dropped worldwide in 2002 to $6.6 billion from $7.1 billion in 2001, making the database market that much more tenacious. In this light, SAP's deal with MySQL is a natural. Under its terms, the German company will pass development of SAP DB to MySQL. The Swedish company then picks up commercial rights to SAP DB. Mickos plans to merge SAP DB's code with that of MySQL. And he hopes to incorporate heavy-duty computing features into MySQL's next release. If he's successful, that could save MySQL years of development time and immediately put it on competitive footing with the big guys for lower- and middle-tier types of commercial database installations. "We're typically used in Web sites and departmental applications, but we're not the database for a business application in the enterprise. And we want to change that," says Mickos. "MOST LOGICAL WAY." And SAP says it will support customers who want to use MySQL products. That's key because a big global support partner is precisely what IBM brought to Linux. In exchange, SAP gains access to the development process of this popular open-source product and pushes its agenda of commoditizing databases. "We're not contributing to commoditization to spite Oracle. We do it because it's the most logical way to reduce the cost of ownership," says Shai Agassi, the SAP executive-board member who handles open-source issues. The upshot? It could mean SAP finally has a broadly accepted commodity database to offer costumers. That would be bad news for big database companies. Oracle in particular has the most to lose because its primary business remains databases, and its share of new database license revenue fell from 40% in 2001 to 34% in 2002, according to Gartner. Forrester Research software analyst Ted Schadler says lots of other companies would rather not pay what he calls the "database tax." Says Schadler: "It won't take very many high-profile companies to support MySQL to start the snowball effect." Pulling a Penguin won't be easy, though. Linux attracted corporate users tired of paying for premium hardware to run Unix operating systems. But all major database software runs on commodity Intel-based servers, so running MySQL doesn't save businesses much hardware costs. "There is today no huge vacuum in databases that an open-source database will fill. This is in distinct contrast to Linux, where no Unix vendor could provide Unix at Intel price points," says Forrester's Schadler. DIFFERENT EXPECTATIONS? Further, several efforts to create viable open-source alternatives to proprietary databases have failed. "They have long been searching for alternatives for Oracle," says Ken Jacobs, Oracle's senior vice-president for product strategy. Jacobs claims to be not terribly worried because he believes Oracle sells to a completely different kind of customer. Building databases like Oracle's, which run on clusters of multiple processors and scale up to handle enormous numbers of requests per second, is also something that could take MySQL years to accomplish, according to Jacobs. Even Mickos is circumspect in describing the significance of the recent developments: "We're not trying to compete with Oracle and IBM. There's a need in the market for a commodity database that's easy to use. We don't see IBM and Oracle even trying to be in that space." That may be so, but SAP, which analyst Schadler calls a "very patient company," likely has a larger agenda in mind.
 By Alex Salkever Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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