Episode 42: EnterpriseDB, Collaborating with the community to make Postgres enterprise ready, with Ed Boyajian, CEO

Ed Boyajian, CEO joined EnterpriseDB and helped it pivot from a small organization, to one of the leading Postgres database companies. The company has figured out how to run a profitable business, while embracing and respecting the community and open development process that has formed around Postres for more then two decades.

The post Episode 42: EnterpriseDB, Collaborating with the community to make Postgres enterprise ready, with Ed Boyajian, CEO first appeared on Open Source Underdogs.

Ed Boyajian, CEO joined EnterpriseDB and helped it pivot from a small organization, to one of the leading Postgres database companies. The company has figured out how to run a profitable business, while embracing and respecting the community and open development process that has formed around Postres for more then two decades.

Intro

Michael Schwartz:  Hello, and welcome to the first episode of Open Source Underdogs in 2020. I’m your host Mike Schwartz, and this is episode 42 with Ed Boyajian, CEO of EnterpriseDB.

This episode was
recorded last year, it took me a while to get it out due to some technical
challenges. Let’s just say the internet Gods conspired against me the day I
recorded this episode, and I had to finish recording on Zoom, which is
fantastic for meetings but not ideal for podcast. So, if you hear a slight
audio quality difference towards the end, that’s the reason.

After the episode, I
have an announcement about what you can expect this year from The Underdogs podcast.
We have a new challenge, but I think you’ll be excited to hear about it.

So, make sure you tune
in after the main event.

Ed is definitely one of the superstars of open source business. I got a lot of great insights from this interview. And I feel like I only scratched the surface, we might have to have him back for a follow-up.

But, without further ado, here we go. Ed, thank
you so much for joining the podcast today.

Ed Boyajian:  Hi, Mike, I’m glad to be here.

First Priorities

Michael Schwartz:  What was the EnterpriseDB product when you joined a CEO, and
what were your first priority to transform the business?

Ed Boyajian: I came to EDP in 2018, and the company had been founded a few
years before that, in 2005. The original thesis for the company was centered on
helping customers solve problems they were having with Oracle. And even then,
there was well-known pain around locking that was associated with Oracle and EDB,
that is origination, and had developed some technology to make compatibility
with Oracle, kind of the flagship technology, such that it was easy to migrate
applications, written to run on Oracle, to run those on a Postgres database.

So, when I joined the company, that was kind of the center point of the business. And a company at that time was more prominently known as the Oracle compatible database company. My focus when I joined was to really shift that and center it much more squarely on it, being a Postgres database company.

Pivoting Challenges

Michael Schwartz: What were some of the biggest challenges you faced when you joined
a CEO to pivot the business?

Ed Boyajian:  I think, like many companies
that have to face change, the core engineering focus of the business, being on
Oracle compatibility more so than Postgres, meant that there had to be a shift
in mindset, and to get people to really reorient around prioritizing Postgres
and our competencies in the database platform itself, as the priority for the
company.

And having come from Red Hat, I’ve been there for almost seven years and had some experience obviously around open-source projects, and working with open-source communities, I think that was an important change for the company to really think about what it meant to be participants and contributors to a project like Postgres.

Relationship with Postgres Community

Michael Schwartz: Did the Postgres community welcome EnterpriseDB? How would you describe
your relationship with the community?

Ed Boyajian:  I think that the Postgres
community was and is very welcoming of contributions from outside, and to that
end, and at that time, very, very welcoming to EDB in our contributions.

I think the company had done work with Postgres
previously, but in the intervening time, we’ve invested in a number of people,
who’ve come to the company, that are key contributors to the community. So
that’s been a real strength.

Postgres, like Linux, as you may know, is an
independent open-source community. It’s not one that’s controlled by a company.
I think that’s inherently the strength of the community. And I think, given the
longevity of the Postgres community and the nature of governance, the Postgres is
governed by a core team of folks that manage the whole project – there’s no
single individual who’s responsible. I think that is also structurally aligned well
to encourage contributions from companies like EDB.

Open Source V. Open Core?

Michael Schwartz:  Cloudera and Chef recently went from open core
to 100% open source. Of course, you’re familiar with Red Hat that has a similar
model – do you think that open-source vendors are moving away from open core?

Ed Boyajian:  I see generally that being
true, although many companies, including EDB, do work on the periphery, around
the core, open-source project. We do that in the form of tools and extensions
that aren’t specifically in the database server itself, and we do those
projects outside of the core community.

I think a lot of companies, including Red Hat,
do work in similar fashion, but generally speaking, I think there’s a great
advantage to being prominent, an active contributor to project. And I think
most of the commercial companies associated with open-source projects have
recognized that value.

EDB Value Prop

Michael Schwartz: Speaking of value, what are some of the most important value propositions for EnterpriseDB?

Ed Boyajian: I think there really a
couple that we focus on, and I think that means most to our customers. The
first is around customer obsession, but it’s customer obsession set entirely in
the context of Postgres.

And to kind of put
another lens on it, I think it would be fair to say Postgres One. That enterprises
and governments all over the world have made Postgres a standard database
that’s now part of their strategy.

EDB was central in
creating that when in the market, and because of that I think, we’re uniquely
positioned, with our exclusive focus on Postgres, to provide a level of care
for customers that no one else in the market can do at this stage. I think
that’s one.

The second is Postgres
technical differentiation. And for EDB that manifests in a couple of ways.
Primarily in our contributions to the community, where we’ve led advancements
in the core Postgres database platform for many of our customers, parallel
query, projects like zheap, and other projects, where there’s a meaningful
amount of heavy lifting, we’ve been the primary contributors to much of that
work.

The second area where we
create technical distinction is what I mentioned earlier in the enhancements,
that we make kind of around the database server itself. And some of them touch
the database server like Oracle compatibility, which many of our customers
still value from EDB, but beyond that, doing work in the areas that enable Postgres
to be deployed at scale have been really important.

You can think about that in the context of replication, or failover, enterprise-class management, and monitoring – all the things that any enterprise would need to run a database at scale.

EDB Products

Michael Schwartz: How many EnterpriseDB products are there today? And which
are most important from a revenue perspective?

Ed Boyajian: So, predominately, we think of it as essentially being one
primary product we called the EDB Postgres platform. Within that, there are two
database server options: one is the pure community edition, the second is that
version of the database server that’s enhanced with the work we’ve done in
Oracle compatibility, and in a few other areas.

We bundle with the tools that I described earlier, such that our customers don’t have to pay for a separate skewer line item for the pieces and parts they need to make the database run. And that’s notably different than the traditional enterprise vendors in the market.

Pricing

Michael Schwartz: Ed, pricing is really
hard for startups – do you have any advice on how to find the right gates, or
how to set the right price, or how to evolve pricing as the business
environment changes?

Ed Boyajian: That’s a great question. It is a part of the strategy that’s
evolved over time. In the early stages, as we started to develop some of those
capabilities around the database server itself, we attempted to monetize those
as parts.

And we found that that was particularly
complicated largely because customers were turning, the Posgres were turning
away from complex, contractual arrangements and complex, buying systems they
have with Oracle and other commercial vendors.

So, I think our first attempt at that we got
wrong, by putting that into a bundle, it also created the dilemma of figuring
out how to price that sufficiently, such that we didn’t over-price. Because we
had a lot of extra development, and IP, and value-add on the one hand, but on
the other hand, kept things simple.

We, over the years, have been really tuned in
kind of creating price points that are appropriate for customers. And I would
say, it’s evolved even more recently as we’ve done more extensive work in areas
of the product, particularly with replication for example, where that alone has
become valuable. Some of our customers want that almost exclusively.

So, we’re starting to rethink how we approach that pricing modeling, and looking at stratification of our product line. And I think what we will see going forward is some additional skews that allows to kind of address different levels in the market.

Market Segmentation

Michael Schwartz: Data persistence is a horizontal market – do you segment the
market at all?

Ed Boyajian: Generally speaking, we don’t. And I think if you look at
database, and just recognize a database is an infrastructure software, it is
incredibly prolific across enterprise environments. I think if you look a
little more closely in on database, if you look at the database like Postgres, which
is a true, general purpose, transactional database, it has even broader horizontal
applicability enterprise.

It is compared to some of the specialty database
technologies that are in the market today. So, given that nature that it
touches every application, it touches every department, it touches every
developer, you know, we’re mindful that our opportunity is equally distributed,
both in terms of within an organization, and then across industries and
segments.

Now, having said that, we’ve seen centers
massive for the business that have been prominent. And, so, we do some
specialized marketing to those categories, and the ones that are most
significant infotech, which is software and hardware technology. We have a
biggest sub segment of our business government is much as a quarter of our business
today, financial services, another really important vertical for the company,
and then media, and telecom.

Those four segments would represent 90% of our
business. We do Orion, some of our messaging and solutioning around those
segments. And then split it other way, we are a global company with more than
half of our business coming from outside the United States.

Interestingly, that split about 30% in APJ, 20% Amia, and the rest in North America. So, we also, in that context, do segmentation that is more geo-oriented.

Partner Strategy

Michael Schwartz: I’ve noticed that EnterpriseDB has really great partner network – what are the different types of partnerships that are important for EnterpriseDB?

Ed Boyajian: Yeah, it’s been an important part of our growth strategy. and I
can only put it in context, we’ve had now 39 consecutive quarters of subscription
revenue growth. And if you looked inside of that, that’s come largely because
of a diverse network of go-to-market strategy than partnerships.

About 65% of our business comes through indirect
channels, and so, we categorize that in the kind of classic form, distributor, reseller
market, which is probably clearly the most prominent go- to-market route for us
outside of North America.

We rely heavily on distributors and resellers,
in both of Amia amd APJ, so, that’s a particularly mature and growing part of
the business, in one that we prioritize.

Beyond that, we look at a network of partners
who provide some other form of value out. We may try to call them, coin them OEM
– they are not literally OEM partners, in one form or another. Or technology
partners that bring EDB products to market, somewhat different than a
distributor.

A notable one that we just announced this past
year, late in the year, was our partnership with IBM, in close alignment with
their data and AI teams, and where we bring our products to market. In close
alignment with IBM Solutions, particularly around their cloud pack for data,
for example.

So, that’s an example of a prominent partner
that brings us to market. We see other examples of that, where we’ve developed
strong alliances.

I think another notable one is Infosys, where, again, particularly in their new application development practice bring EDB and Postgres to their clients, as they do, to work there.

Partnership Prioritization

Michael Schwartz: Over the years, have you developed any rules of thumb, as to
which partnerships to develop?

Ed Boyajian: I think there are partners who have a clear vision and agenda
that relates to open source, and then, to go a step further, have gone beyond
that and really defined Postgres as a part of that strategy.

Those, not surprisingly, are high-priority
partner targets for us. And that actually exists across the continuum we’ve
seen in the distributor and reseller world. We’ve seen partnerships evolve and emerge
that were specifically focused with a partner specifically focused on bringing
Postgres solution to market.

Even our recent partnership with IBM, for example, or our partnership with Infosys, our partnership that we announced last year with Ali Baba – all were centered on their vision to bring a Postgres solution to market.

Sales Organization

Michael Schwartz: Building a global sales organization is a huge challenge – how
did you go about transforming the sales organization when you joined
EnterpriseDB?

Ed Boyajian: It was a really interesting challenge because I had just come
from Red Hat, where when I joined Red Hat, the company was maybe 50 million, and
I ran the North America business at the time of my departure, which was
approaching a 250-300-million-dollar business. So, I had the opportunity to live
through an extraordinary amount of growth in a sales model around open source.

When I came to EDB, the company was tiny by
comparison, and there wasn’t a firmly establish sales pattern. So, one of the
things that we started to do was, really focus on being efficient in acquiring
customers. And I think it’s an important distinction, especially for this
audience, rather than plow big money into what I think of is high-end enterprise
raps, we started with inside sales motion that toggled around software downloads
and incrementing sales spend at a relatively small rate, until we got to higher
levels of a value with customers. And really built from what I consider really
basic selling model out.

And that proved to be incredibly powerful because we got quite good at addressing customers. Frankly, in the way that I think they prefer inner set companies nowadays.

Modern Sales Strategy

Michael Schwartz:  The enterprise software markets changed a lot in the last 15 years – can you talk about how you think vendors of open-source software should adjust their sales strategy for 2020?

Ed Boyajian: I think you have to look first at what’s changed in the landscape
of IT consumption, and how buyers are forming inside companies. If you look in a
little closer, first I think the commoditization of compute has allowed users
across the enterprise to emerge, and you couple that with the way development is
happening now more outside of IT, and more in the business unit.

The pattern of adoption for technologies has
changed, its not centered on IT. So, I think the old strategies that we used to
use in growing a global sales organization, to bring in relatively expensive
high-end sellers, to engage with a relatively finite number of buyers has
fundamentally changed.

The other thing that’s changed alongside that is,
customers and users consume a tremendous amount of information on their
journey. In fact, they’re heavily in self-service mode in their learning about technology
or company.

And, here, again, I think an easy mistake to make
in a go-to-market model, in an inefficient, go-to-market model is to think that
you need to fill that blank in with staff, or we might think of it as high-end
salespeople, but rather to build the systems that allow users and prospective
customers to self-serve as far as possible, which is their preferred method of
engagement nowadays.

So, my view of that has changed radically over
the course of the past 20 years, in terms of how to build and structure the
right kind of selling motions and sales organization.

Impact Of Cloud Computing

Michael Schwartz: As you know, enterprises are moving to the Cloud for many
services, but as an enterprise software vendor, on-premise, or hybrid cloud, is
still critical for growth. Is the move to the cloud accelerating? Has it
peaked? And any advice for open-source software vendors on how to align with this
trend?

Ed Boyajian:  Well, I would say that the
move to Cloud is accelerating. It’s hard to argue that, but I think, at least
from what we see now, companies are starting to kind of settle in on enterprise
strategies for how they deployed technologies.

Cloud is another important deployment platform,
just as traditional on-prem deployments are an important deployment platform. And
I think it’s easy to get caught in this kind of notion that there will be no tech
deployed in what we may think of today as traditional contacts – we just don’t
see that as a reality.

I think the difference for companies that are
building businesses to think about what are the key technology capabilities
that you have to develop to enable your customers to deploy in any environment
of their choice – that’s how we’re focusing on this change. And we can’t avoid
the reality that 70%, 80% of our customers deploy in traditional on-prem
environments.

Now, those environments are becoming more cloud-like
in the way they’re being deployed on containers, certainly in virtualized environments.

But, at the end of the day, our customers’ view, and we with them, view Cloud as a another very important deployment platform, but it’s just another deployment platform.

Cloud Strip Mining

Michael Schwartz:  Amazon and other mega
clouds are offering RDBMS as a service, and many in the industry are
understandably concerned about Mega Cloud providers moving up in the
applications stack. As someone who’s experienced this firsthand, do you think
it’s a good or bad for your business?

Ed Boyajian: Look, we have many of our customers deploy databases in the
Cloud, so they have to separate maybe two things. I think it’s very valuable to
have Cloud computing as a utility and as a deployment platform for enterprise
customers that makes compute more accessible.

I think it gives a lot of businesses, a lot of flexibility
that they can’t get in traditional deployments. In that context, I think that the
deployment of databases in Cloud is healthy for enterprises.

I think this question of whether or not Amazon
being prominent in offering as a prime vendor of those database services, it
intersects that, but I think most broadly speaking, I think the availability of
Cloud services is a good thing, for companies like EDB, and for other open-source
companies.

Advice For Entrepreneurs

Michael Schwartz: Last question, any advice for new entrepreneurs who are launching
a business around an open-source software product?

Ed Boyajian: I guess I’d give maybe a couple of thoughts. One is, make sure
that what you’re thinking about is where you want to take your business that
you have – a credible, commercial vision for what you intend to do with the
technology.

And I think that starts with really being
clear-minded about the needs that are being served, and defining that in the
context of target markets, and being thoughtful about the kind of business
model you designed to serve that market.

I think it’s easy in open-source technologies to,
at some level, get caught up in the enthusiasm that goes along with the
projects. But I think building a business around that takes surprisingly a
remarkable amount of thoughtfulness and discipline.

Michael Schwartz:  Ed, thank you so much
for making time to talk to us today.

Ed Boyajian:  It was my pleasure – thank
you.

Michael Schwartz:  And thank you to the EDB team for logistical support.

Closing

Michael Schwartz: Transcription and episode audio can be found on opensourceunderdog.com. Music from Broke For Free and Chris Zabriskie. Transcription by Marina Andjelkovic.

Now, as promised, a special announcement time:
for those of you who’ve listened to all the podcast, you might have noticed a
preponderance of male voices. In fact, the male to female guest ratio is 42:1. The
only female guest we scheduled was Jamie Thompson, way back in episode 2.

So, this year, we’re going to hear from more
women who are leading pure-play, open-source startups. After this episode in
fact, for the rest of 2020, it’s going to be all women.

To start things off, we have Deborah Bryant, Senior Director of the Open Source Program Office at Red Hat.

I had heard her given a presentation at the Open
Core Summit last year, and I’m still repeating some of those things that she
said. We’re filling out the schedule. If you know of any great open-source business
leaders who are women, please let us know.

You can tweet at us using @fosspodcast, or you can send me a message on LinkedIn. Just mention that you’re a listener, and I’ll be happy to accept your connection.

The next episode will be out towards the end of
February, and then you can expect episodes about once a month this year.

So, thanks for listening, and best of luck with
your open-source business models in 2020.

The post Episode 42: EnterpriseDB, Collaborating with the community to make Postgres enterprise ready, with Ed Boyajian, CEO first appeared on Open Source Underdogs.