db4objects has raised additional funds to grow its operations in response to its fast growing user community and customer base.
We're very happy to welcome Palo Alto-based Asset Management to our circle of investors and Skip Fleshman to our board of directors.
The funds of an undisclosed sum in the lower million dollars ballpark will be used to scale our core engineering team and grow our application engineering and support services. The latter are a new addition to our business in response to certain customers of very high profile (unfortunately mostly under NDA, so I cannot mention them) have discovered how the breakthrough technological benefits of db4o translate into 10x, breakthrough benefits for their business. For these customers we provide, if necessary and in cooperation with partners, highly customized, fast time-to-market projects to fill any gaps that may be there on the product, support, system integration or even the application side, so that they can quickly translate their vision into reality.
Automotive, Carriers, Devices and Caching Systems
Among those highly visionary project solutions are OTA updateable navigation systems in cars (as we showcased at JavaOne 2007), which use Java objects, Dijkstra algorithms, NAND Flash drives and db4o to create a whole new class of navigation devices, which - by means of OSGi, the standard of the USDOT VII project - also hook nicely into the future of telematics.
Another solution area is the idea that user-generated data and content on cellphones becomes the single most attractive tool to retain customers - because that's the only thing that distinguishes a carrier from another: legacy data of its users. With db4o as a (Java: WORA) portable yet controllable persistence engine, carriers can achieve this very important objective of customer retention in more mature mobile markets and bypass the commoditizing effects of the OMA-DS standardization.
Other hot areas of application beyond the traditional device and industrial automation space are financial services, SCADA systems and other forms of object caches - be it in grids, on rich clients such as Silverlight/Flex/JavaFX or in any other online/offline scenario.
Are you consistent, Christof?
While I do not assume that anybody really reads my blog or keeps track of what I said earlier, I still wanted to reconcile this step with my past blog posts about our funding strategy, which to date was based on professional, entrepreneurial angels like Mark Leslie (Veritas founder), Vinod Khosla (Sun founder) and Jerry Fiddler (Wind River founder), e.g. as posted here.
I
argued that you cannot build a true open source business in 3 years, which is the classical "VC clock".
Open source business is all about "users first, business second". All
open source projects go through 3 phases:
- The initative of one or a few individuals to bring an open source project to the starting line for community adoption
- The community-driven rise of user adoption which still produces little or no revenues
- The commercialization when the massive user adoption cries for services, add ons or other complements like db4o's non-commercial licensing alternative for embedded useage in non-GPL'd products
For db4objects this is consistent with the new funding: (1) In 2000-2004 there was a small non-profit online community around Carl Rosenberger that brought the project to the starting line. (2) In 2004-2007 the community has grown from a few 100 to some 25,000 registered developers with more than 1,000,000 product downloads.
Now, we're entering phase (3), the commercialization of our technology, which will - at this stage - be based mostly on a few very high value customers which get very unique business benefits from db4o's very differentiated and enabling technology. This is the time when you want to make sure that a solid funding ensures smooth delivery to the even most demanding customers.
While some could argue that 25,000 registered developers is little compared to MySQL's - I don't know - 2.5 million - I want to make sure that we understand that db4o is an innovative, differentiated product unlike any other. This sets it apart from MySQL and all others which are a commodity within a well understood product category (RDBMS) and - in the end of the day - sell a good-enough product at lower prices. This commodity approach cries for a very large population of users to be sustainable, because conversion rates are sometimes less than 1% and ASPs are around $10K.
db4o has none of this. For those users that finally get their head around the disruptive nature of db4o, we provide immense benefits. We can unlock a much higher business value to our users, are highly differentiated from all other vendors out there, and are therefore not forced to differentiate by price. Price consistently ranked very low in our annual user surveys. More product features and better influence on the product roadmap ranked very high in user requirements, and our strategy going forward reflects exactly this market need.
I think our metrics in terms of user population (lower than MySQL), commercial conversion (higher than MySQL) and ASP (higher), given that we're innovative and differentiated, not a commodity, give us a clear mandate to move to the third step in the generic master plan for open source projects and companies.
Thank you!
I want to use this opportunity to thank you - users, customers, partners, investors, and eggheads - for all what we have achieved so far. You all have contributed to the success to date and the immense assets that our new investors uncovered in their diligence. Thank you!
I appreciate your feedback and opinion.