MarketLine Blog

The open source and graph database revolutions

The Oracle relational database is the world’s most popular enterprise database software and makes up a substantial part of the company’s software and cloud revenue segment. The revenues for this segment in the financial year ended June 2014 were $29.2bn. Improving on the relational database format is therefore likely to create high levels of income for those companies able to develop and distribute such a product.

Graph databases have the potential to disrupt the dominance of relational databases. Large organizations are increasingly concerned with the ways in which the information they deal with is connected together, often in enormous complex networks. This has led to new ways of managing large amounts of data, namely in graph databases. These types of databases are growing rapidly in popularity. Transport networks in a graph database show relations between locations and can be used to find the fastest route between two points, social networks are graphs that show relations between people, fraud detection can show up quickly through graphs of financial transactions, and disease outbreaks can be modeled through graph technology. As those in the business are keen to highlight, ‘graphs are everywhere’.

There are numerous companies competing within the graph database market, each with a slightly different technological offering and licensing arrangement. Two such companies are Neo Technology, Inc. (with Neo4j) and Objectivity, Inc. (with InfiniteGraph). Interestingly, Objectivity, Inc. and Neo Technology, Inc. manage their knowledge and innovation systems with opposing strategies. Neo Technology, Inc. has been successful in maintaining a system of open innovation with its Neo4j product, whereas Objectivity, Inc. has had to adapt its closed strategy to the open system in order to market its InfiniteGraph product on a wider basis.

These conflicting innovation strategies highlight a key business trend that has developed over the last decade; many companies now use more open forms of innovation and product development processes. In a closed innovation system, software companies tend to limit external use of their software to paid-for commercial purposes, which is often referred to as a closed-source software arrangement. In an open innovation system, open source software is still licensed but is made freely available to many users so that they are able to modify, extend and apply the software in ways that the original licensor may not have envisaged. Both of these strategies have been used by graph database companies and have produced different results.

A comprehensive analysis of the evolution of the database management industry and the opposing strategies of open and closed innovation systems can be found in the MarketLine Case Study, The open source and graph database revolutions: How software companies use knowledge as a strategic asset.


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