Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

The ambitions of Ingres: A small company with the executive team of a giant

Posted by Tom Foremski - March 22, 2006

By Tom Foremski for SiliconValleyWatcher
Jim Finn, Tom and Dave Dargo (by Dan Farber)
I met with the executive team of Ingres Tuesday evening and it's clear that this newly minted company has major ambitions in the open source enterprise software market.

Ingres was formed in November when Computer Associates spun out its enterprise database group to Garnett & Helfrich Capital--which specializes in venture buyouts. And over the last few months Ingres CEO Terry Garnett has been pulling together one of the top executive teams in the industry.

It's a team that has spent many years in Oracle--its top target. Dave Dargo, senior VP and CTO came from Oracle and is a respected authority on Linux; Dev Mukherjee, CMO, came from Microsoft and IBM and is credited with key thought leadership in establishing utility computing and software as a service. In recent weeks, Jim Finn, who led Oracle's corporate comms for many years and is credited with managing the tricky acquisition strategy, and was recently head of comms at IBM Americas; Tom Berquist, a former star Wall Street analyst was appointed CFO; and earlier this week Bill Maimone joined as Chief Architect, he had lead database development at Oracle.

Mr Garnett also used to work at Oracle as senior vp of worldwide marketing, and he says Ingres collectively has about 1,000 man years of experience at Oracle. Check out the rest of the executive team: http://www.ingres.com/company/Executive_Profiles.html

Ingres is offering an open-source enterprise-ready database that can compete against Oracle. MySQL is one of the leading open source databases but it has run into a problem: Oracle has acquired open software companies and controls the transactional database engines that MySQL needs for the enterprise market.

Dave Dargo, CTO, says that MySQL now has to replace those database technologies and that could take 18 to 24 months. This helps Ingres win business that might have gone to MySQL.

With such a stellar executive team Ingres clearly has ambitions that go beyond being just one of several open source database companies. The opportunity is in being able to offer the database and the rest of the enterprise software stack , and the question is how will that be done? Will it be done through acquisitions or partnerships?

Oracle's increasing share of the enterprise applications market, combined with its database and middleware stack--is pressuring large enterprise players such as SAP, BEA Systems, Red Hat, Symantec and others. These now become natural allies to Ingres, and potential partners in the fight against Oracle.

The business opportunity is in attacking high IT costs. "Oracle customers hate the high license and maintenance fees. There is an opportunity to come in at one-half to one-third of Oracle's fees," says Mr Garnett.

The enterprise IT market is also switching to a services pricing model, annual fees instead of licenses. Oracle faces a stressful transition to the new model which could take two years to complete; Ingres doesn't have that legacy issue, making it attractive to enterprise customers.

"I think we can carve-off five to ten per cent of the enterprise database market, which is $16bn. And if we can do that, I don't see why we couldn't get to ten to twenty per cent of the market," says Tom Berquist, CFO.

A trend in its favor is the acceptance of open-source software within large enterprises where new IT projects increasingly have open-source components. Ingres challenge will be in how it can leverage the open source community in the same way MySQL has benefited. And how quickly it can build the enterprise software stack.

Other considerable challenges come from IBM and Sun Microsystems, which already have a substantial enterprise software stack and can commoditize the software at a faster rate because they can sell the hardware services.

Suddenly, the enterprise IT market has become very interesting as these large players try to commoditize each others core markets. [See "Stack war" by Nicholas Carr] And the players that only have one part of the stack are forced to scramble for allies or seek mergers.

This is why Ingres has become the dark horse of the enterprise market--and one of the hottest and most interesting Silicon Valley companies around. It is a small company with the executive team of a giant--so you can bet that it won't be sitting around quietly. I'll be meeting with Dave Dargo soon--watch this space :-)
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Please also see my fellow ZDNet blogger Dan Farber: Ingres prepares for assault on Oracle's turf

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