K1 Investment Management, the new owner of MariaDB, sent a strong hint about what its future plans for the company may entail with the appointment of Rohit de Souza as the organization’s new CEO. While he now has the challenge of overseeing product development, of note is what his specialty was in the past.
According to his LinkedIn profile, de Souza’s last three jobs have all involved preparing business units or whole companies for acquisition or resale. The three organizations were Micro Focus International, a provider of software and services which OpenText purchased in January 2023 for $5.8 billion, Actian, a software company purchased by HCL Technologies and Sumeru Equity Partners for $338 million in 2018, and BeyondCore, a company that specialized in business intelligence and analytics that Salesforce purchased in 2016, where terms of the deal were not disclosed.
His appointment on Monday coincided with a release from K1 announcing that it had completed its tender offer to acquire 100% of the issued ordinary shares of MariaDB, an organization that provides database services and SaaS offerings built on the core open-source database that is managed by the MariaDB Foundation.
The initial non-binding proposal for acquisition of the firm, headquartered in Silicon Valley and Dublin, Ireland, which was first announced in February, sparked speculation about the company’s future and what the acquisition would mean for its enterprise customers.
In May, an announcement that its shareholders had accepted the K1 offer came after the company was hit with more bad news: ServiceNow was moving away from MariaDB and “migrating all customers to a new database called RaptorDB,” which is a fork of PostgreSQL.
Commenting on the offer at the time, Carl Olofson, research vice president and database analyst with IDC, said the key to determining what happens next is why the acquisition happened in the first place. “When you see something like this, there is one of two motivations. One is that you want to dismantle the company, and make a profit from the assets, which is not going to be the case here, because they do not really have assets.”
The other option, he said, is “to really believe that with proper management and the right approach, the company can grow far beyond where it’s at now – make fabulous profits, sell it off and everybody walks away happy.”
Doug Henschen, vice president and principal analyst at Constellation Research, said Thursday, “MariaDB had been for sale after a few years of poor performance and management turmoil. It is no surprise that customers like ServiceNow are looking elsewhere, as tech vendors must have confidence in the long-term viability and roadmap of embedded technologies such as MariaDB. K1 and de Souza will have their work cut out for them stabilizing the company, restoring confidence, solidifying the roadmap and winning back customers.”
Holger Mueller, principal analyst and VP at Constellation, added, “ServiceNow is a different company now than back when they chose MariaDB as the underlying platform for its customer data.”
Then, he said, partnering with an “effective platform like MariaDB was a good choice. Today, ServiceNow has the pockets and expertise to acquire solutions, and it needs to become more standardized and open. That is what the move to its in-house PostgreSQL-based RaptorDB is all about. And finally building a database for its in-house workloads is always going to be a superior offering.”
A dedicated architecture for ServiceNow’s needs, said Mueller, “will always beat a general architecture. For MariaDB, it is likely a noticeable loss, but it should not come as a surprise, as ISV partners grow out of a solution or they switch platforms.”
Meanwhile, according to a release from K1 issued on Monday, upcoming product releases will include the “launch of vector search in MariaDB Server and a Kubernetes (K8s) Operator, catering to AI and cloud native trends. These advancements enable enterprises to build AI-driven applications and deploy scalable solutions, including advanced recommendations, image-based search and intuitive chatbots that leverage LLMs [large language models] and data analysis tools.”
Robin Schumacher, senior director analyst at Gartner, said Thursday that the global database market is thriving at $103 billion, with an annual growth rate of 13-14%. That said, MariaDB has a miniscule market share of only 0.04% of the overall database market, generating under $50 million in revenue last year, he said.
He emphasized the importance of a cloud-first or cloud-only strategy, given that DBaaS (database as a service) comprises 61% of the market, and is expected to reach 78% by 2028.
“That’s where the money is going. So that is why, when you are looking at any vendor again, whether it is MariaDB or anybody else, you need to ask them, ‘what is your cloud strategy? Is it a cloud first? Is it a cloud only strategy?’ This becomes extraordinarily important, because, again, if you look at the vendors who are executing above the market average, they either have a cloud only strategy or a cloud first, where most of their innovation goes to their database as a service first. Then it finds its way back into on premises.”
What is in MariaDB’s favor is they are able to handle both, he said, adding, “some players who only do cloud miss out on the on premises growth. Even though I said DBaaS will be close to 80% of the market by 2028, on premises dollars are still growing to the point where it is going to be close to $50 billion by then, so there is still a lot of money to be had. If you are a player that can do both, that is a good competitive advantage you have over the cloud-only people.”
That said, Schumacher described the firm as a “very small player competing against so many other foes that are larger than them. It might be difficult if you are looking for this company to do anything strong, anytime soon.”
