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Unlikely Partners IT and Finance Team up for Postgres

EDB Team7/24/2015

The database market is undergoing a transformation, and it’s affecting both the IT department as well as the finance department in businesses today. In fact, as data – and its management and security – becomes increasingly important to business success, the most enduring collaborations in many organizations are being formed between finance and IT. Under pressure to reduce costs, finance departments can play a proactive role in helping IT find ways to make IT more efficient, freeing up financial resources that can be applied to more strategic, customer-centric initiatives. In particular, the cost of infrastructure, and databases especially, has been seen as capital expenditures that may be better spent elsewhere within the organization.

In a recent webcast, EnterpriseDB’s Marc Linster, SVP Products & Services and Gary Ludorf, VP of Business Development, provided some guidance to financial execs for migrating from Oracle to Postgres, the most advanced enterprise-class open source database. For starters, they addressed the way financial execs should approach applications:

  • Take inventory and evaluate the applications developed in-house. Find out which of those applications are custom – also known as Applications of Differentiation (or Applications of Enagement) – as they are excellent targets for open source RDBMS migration. They enable organizations to differentiate themselves in their go-to-market strategy, strengthening the offering compared to competitors.
  • Do not migrate Applications of Record that are packaged applications. These are the apps responsible for automating enterprise operations, such as CRM, ERP, or supply chain management. They are often built from the very proprietary techniques seen in commercial databases and are the largest consumers of those licenses.  

Big Savings, Little Risk

Now consider the cost. The primary driver for migrating custom apps to relational OSDBMS is, of course, savings. Open source software, even a commercially supported version of an open source database, such as EDB’s Postgres Plus subscriptions, is a fraction of the cost of traditional vendors. In the last decade, organizations have paid $4-6 million on average for a three-year user license agreement from a commercial database vendor, which often leads to superfluous and unnecessary user licenses. The solution: end user license agreements, construct a three year custom app migration plan, and re-provision commercial licenses to Applications of Record and away from Applications of Differentiation.

Consider these numbers: In a $5 billion organization, there might be 100-150 applications, 60-90 of which are custom apps and 40-60 are commercial. With 20-30 days’ timeframe for a single app, organizations would begin seeing net savings of nearly $4 million in three years’ time and almost zero risk when using automation, minimal code changes, and best practices.

Open Source in the Data Center

Two strong collaborative forces at play for organizations that are developing new applications and migrating existing apps to a relational open source database management system are the need to disrupt vendor lock-in by ending license agreements, and the need to manage risk during this process. While the IT and finance departments fight this battle, commercial RDBMSs costs stay exceedingly high, and it robs the organization of the funds to differentiate. The drastic cost savings of EnterpriseDB’s subscription-based model and reduced risk from working with a reliable partner and employing EDB’s database compatibility for Oracle make the change to Postgres very compelling, allowing organizations and their executives to focus on innovation in their industries.

The adoption of open source database systems is already rapidly growing. In fact, according to Gartner’s April 2015 report, The State of Open-Source RDBMSs, 2015, “By 2018, more than 70% of new in-house applications will be developed on an OSDBMS, and 50% of existing commercial RDBMS instances will have been converted or will be in process.”

The Gartner figure below shows the evolution that relational OSDBMSs have undergone from 2009 to 2015, as compared to traditional relational databases. As illustrated, open source databases have caught up to commercial capabilities in every way, including support for business critical applications. And, when it comes to Total Cost of Ownership, open source DBMS solutions are now a much better value.

 

   

As relational open source database management systems have matured, enterprises are increasingly considering them as the new standard infrastructure of choice. In fact, a May 2015 EnterpriseDB survey shows that 37 percent of businesses today are migrating their existing commercial databases to open source solutions, and 77 percent are deploying entirely new applications on open source.

To get started evaluating your database environment for transformation with Postgres, contact us

Beth O'Byrne is Vice President, Controller at EnterpriseDB.