K1 Funding Administration, a subsidiary of MariaDB, has issued a statement outlining potential future plans following the appointment of Rohit de Souza as the company’s new Chief Executive Officer. As he transitions to oversee product improvement, a departure from his previous area of specialization.
According to his LinkedIn profile, De Souza’s last three positions have focused on developing business models or preparing entire companies for sale or acquisition. The three organizations that have been acquired are Micro Focus Worldwide, a software supplier purchased by OpenText for $5.8 billion in January 2023; Actian, a software firm acquired by HCL Technologies and Sumeru Equity Partners for $338 million in 2018; and BeyondCore, an enterprise intelligence and analytics company bought by Salesforce in 2016, with the terms of the deal remaining undisclosed.
His appointment on Monday coincided with a statement from K1 announcing it had successfully acquired 100% of MariaDB’s outstanding shares through a tender offer, further solidifying its position as a major shareholder in the company that provides database solutions and SaaS offerings built on the open-source MariaDB core.
The initial, non-committal proposal for acquiring an agency based in Silicon Valley and Dublin, Ireland, initially unveiled in February, outlines implications for the company’s long-term vision and the potential impact on its business clientele.
Following a tumultuous period for Could, an announcement emerged that its shareholders had ratified the K1 supply, arriving after the company was rocked by even more jarring news: ServiceNow was quietly migrating all clients to a revolutionary new database called RaptorDB, a fork of PostgreSQL that has left industry insiders abuzz.
According to Carl Olofson, vice chairman of analysis at IDC and a database analyst, understanding the motivations behind the acquisition is crucial for determining what happens next. There are likely to be at least one of two underlying motivations. The notion that dismantling the corporation and generating revenue from property is misguided, particularly in this instance, since the entity lacks tangible assets.
He argued that the counterpoint involves envisioning a scenario where, with meticulous management and a tailored approach, the company can surge beyond its current standing, generating substantial profits, maximizing returns on investment, and yielding a successful exit for all stakeholders.
According to Doug Henschen, vice chairman and principal analyst at Constellation Research, MariaDB faced significant challenges after only a few years in operation, marked by poor efficiency and administrative turmoil as of Thursday. As clients like ServiceNow explore alternative options, it’s hardly surprising that they’re seeking assurances about the long-term viability and roadmaps of embedded technologies like MariaDB, which are crucial for tech distributors. K1 and de Souza should focus on securing stability in the corporation by consolidating their efforts to restore investor confidence, fortify a clear strategic roadmap, and drive profitability through satisfied client relationships.
According to Holger Mueller, principal analyst and VP at Constellation, “ServiceNow stands out as a unique company since it opted for MariaDB as the underlying platform for its customer data.”
He noted that partnering with an efficient platform like MariaDB was a prudent choice. Currently, ServiceNow possesses the capacity and expertise to scale its offerings, requiring a shift towards greater standardization and openness. The migration to an in-house PostgreSQL-based RaptorDB solution is at the forefront of this effort. Constructing a self-sustaining database for in-house use will always yield better outcomes.
A tailored architecture aligning with ServiceNow’s requirements, emphasized Mueller, will consistently outperform a generic approach. While the departure from MariaDB might seem significant for some developers, it’s not entirely unexpected given that many independent software vendors (ISVs) pivot in response to changing market demands or opt for alternative platforms.
Meanwhile, following the Monday launch from K1, forthcoming product releases will incorporate the “vector search in MariaDB Server” and a “Kubernetes (K8s) Operator”, specifically designed for AI-driven and cloud-native advancements. These advancements enable companies to build AI-powered initiatives and deploy scalable solutions, featuring superior recommendations, image-based search, and intuitive chatbots that harness the capabilities of large language models and data evaluation tools.
According to Robin Schumacher, a senior director analyst at Gartner, the global database market has experienced significant growth, reaching a value of $103 billion and boasting an annual growth rate of approximately 13-14% as of Thursday. MariaDB holds an infinitesimally small market share of just 0.04%, generating a meager annual revenue of less than $50 million, according to him.
He underscored the crucial importance of adopting a cloud-centric approach, citing the rapidly evolving landscape where DBaaS already commands 61% of the market share and is expected to reach 78% by 2028.
“That’s where the money goes.” When evaluating a vendor like MariaDB, it’s essential to inquire about their cloud strategy, as this can significantly impact the overall solution and its future development. Is it a cloud first? Is it solely a cloud-based strategy? This is crucial because when examining top-performing distributors that excel beyond the market average, you’ll find that they either employ a cloud-only approach or a cloud-first methodology where most of their innovative efforts focus on building and optimizing their databases as a service. The facility then reclaims its normal operations within the premises.
In MariaDB’s favour lies its ability to accommodate various scenarios, according to him, including “a few gamers” who exclusively focus on cloud deployment, missing out on the benefits of on-premises solutions. Although my initial projection suggests that DBaaS will account for nearly 80% of the market by 2028, on-premises dollars are still growing at a pace that will result in a total value approaching $50 billion by then, indicating that substantial investment opportunities remain. That being said, in cases where you’re a participant who can do either, having both options could be a significant competitive advantage you have over solely cloud-based entities.
As a tiny competitor pitted against numerous formidable adversaries that dwarf their scale? It may prove challenging if you’re seeking a company to deliver a comprehensive solution promptly.
