Hi Sean,

This one is interesting to analyse a bit, because there are some
insights for the commercially interested among us. Once again, a visit
to the SEC database is helpful:
http://www.sec.gov/cgi-bin/browse-edgar?
action=getcompany&CIK=0001042821&owner=include&count=40
(look for forms 10-K and 10-Q).

We learn that Pervasive is a company with about $40 mln in revenues and
235 employees. That is about the same as MySQL. Their sales figure is
about constant in the last 8 years, although there was a peak at about
$50 mln in the dot-com era. We also learn that they moved their
customer base over from btrieve to pervasive.sql around 1998/1999. At
that time they also made a foray into web application servers ("Tango"
product line) but they gave up after two years, losing some $30 mln in
the process. In 2002-2005 they ofshored R&D to India, but they now say
they are bringing it back to Texas.

According to Yahoo Finance, investors put a price tag of $90 million on
Pervasive. The company has about $40 mln in cash, so the business is
valued at about $50 mln. Net profit is $4 mln, so people say the
company is worth 12 times current net profit, which is a normal
multiple for a slow growing company.

70% of sales is said to be database products or related, this is
pervasive.sql and the tools around it. This database is strong in the
same market segment as Firebird is strong in: embedded in ISV/VAR
software sold to the mid-market. Pervasive.sql is strong in the US,
Firebird is strong outside the US.

The 2004 idc database report that I posted two months ago, pervasive is
listed as having $40 mln in sales in database & tools (about correct),
but as only $8 mln in pure database. This would suggest that their
pricing model is to make the core database very cheap, but charge for
the tools around it. I guess competing with FB, they have no other
choice. In 2006 the business shrank by almost 10%, "due to competitive
pressure". Would this be due to FB increasing its presence in the US?

So why did they do the Postgres thing? Well, they notice that
pervasive.sql may have some "long term credibility" issues around it
and are looking to create options. That makes sense. But why Postgres?
It is not suited to their traditional customer base at all, because it
is hard to embed and impossible to run DBA-less. Here they made a
mistake. The only people succesfully selling Postgres as a commercial
product are those that aim for DBA-rich environments:
http://archives.postgresql.org/pgsql-announce/2006-08/msg00000.php

I guess Pervasive would have done a lot better if they had partnered
with Firebird instead. The customer bases match, the combined geography
spans the globe, they could have slashed R&D costs, they could have
migrated customers from pervasive.sql to a value-enhanced build of FB
(like they successfully did with btrieve), they would have
significantly enlarged the market for their other tools business.

Paul Ruizendaal

--- In Firebird-general@yahoogroups.com, "Leyne, Sean" <Sean@...> wrote:
>
> Pervasive Software has decided to exit the business of providing
support
> for the PostgreSQL open-source database, one of the first failures in
> the current rush to open-source business models. ...
>
> http://news.zdnet.com/2100-3513_22-6100795.html?tag=zdfd.newsfeed
>
>
> Sean
>