Health IT vendors should learn from Oracle, Microsoft, IBM, and MySQL

As most of us who follow the database world know, MySQL is the “little database that could”. For years it has been running millions of transactions across hundreds of thousands of websites supporting millions of online customers. MySQL AB, a tiny Swedish company with only about $20 million in revenue last year, now has so many customers and users that the Big 3 players have had to respond by releasing free editions of their software just to make sure they are still relevant for new or small projects. MySQL and other open source databases are often used in pilot or prototype projects at no cost but once the systems are developed people stay on them. Even the U.S. Federal Government’s GSA is standardizing on MySQL due to cost savings.

IBM, Oracle and Microsoft each generate billions per year in revenues from their database offerings but need to find a way to respond in a market redefined by open source competitors (which includes Postgres). So, how have they responded? Microsoft, IBM, and Oracle are all now offering “starter”, “lite”, or “express” versions of their databases for free. Of course, they are not being altruistic — they want to lock in developers of new (small) applications for low or no cost and when you build or purchase applications whose needs grow beyond their original expectations you’ll get slammed with some pretty big bills. The free embedded database model is great for Oracle/IBM/Microsoft, great for developers, but potentially a problem for customers due to lock-in. But, I digress. The Big 3 need to do this to remain relevant and they’ll do whatever is necessary to compete against open source competitors or each other.

What’s the lesson here? This month I’ve published several articles on how smaller players in health IT (or even larger players that want to enter the field entreached with competitors) can use the open source model to get access to markets that have been dominated by mega-firms. If a small company like MySQL can make Microsoft, Oracle, and IBM shake, rattle, and roll then the lessons can be applied to health IT by firms who do the same thing. Want to compete against Cerner, McKesson, Misys, and others? Try open source — it works for horizontal and infrastructure software, it will work for verticals as well. The lessons are clear from other parts of the computer industry; companies that ignore what’s going on will miss out on some great opportunities.