Company overview: Sleepycat
Sleepycat was formed in 1996, but has it roots in the initial release of Berkeley DB in 1991. Michael Olson is the president and the company currently has people 25 on staff and out-sources several additional positions. The company's gross revenue has grown 30% every year since inception, with a 60% increase last year. In 2004 the company saw about 50% growth in profits. By all accounts the company's Berkeley DB product is a highly successful product in a well-guarded product niche.
Fully 65% of the company's revenues come from licensing its Berkeley DB product. Roughly 30% of revenue comes from selling releases with an annual support contract. All engineers are available to work on open customer support issues. Selling services is not a focus of the business. Other avenues of revenue for Sleepycat include selling complementary products for XML and Java support.
Sleepycat's biggest success
Sleepycat's biggest success is the ubiquity of the Berkeley DB. The company claims an estimated 200 million deployments. Every copy of Linux has a version of Berkeley DB in it. This success is directly attributed to the company's dual license strategy and the product being open source. The widespread distribution of Berkeley DB creates a large market to up-sell, and takes sales away from competitors. This is a classic example of the benefits of the open source distribution model. The free availability of its source code creates a serious barrier to entry for any competitors.
Like MySQL, Sleepycat uses a restricted, dual-use license for Berkeley DB. The terms governing the use and distribution of it are briefly described here: "Your application must be internal to your site, or your application must be freely redistributable in source form, or you must get a license from us."
Sleepycat does not have to worry about competing for sales or service against companies using its source base because this is prohibited by the license. Sleepycat negotiates every single license, and will only engage in licensing deals that prohibit competitive licensing.
Like MySQL, Sleepycat's dual-use licensing allows it to triple its revenue potential by commercially licensing its database product. Selling services is not a business focus for Sleepycat.
