How can independent database vendors survive in a multi-cloud environment?

As the powerhouse behind Alipay, Ant Group's self-developed distributed database, OceanBase, has gained numerous customers in finance, e-commerce, and the internet sectors since it began independent operations in 2020.

Two years ago, OceanBase launched its cloud database service, OB Cloud, building upon its on-premises deployment capabilities. OB Cloud provides users with core features such as multi-model, multi-tenancy, and multi-workload support. By constructing modern data architectures and simplifying technology stacks, it addresses the needs of massive data high concurrency, cloud migration of traditional databases, HTAP real-time analysis, multi-model data integration, and multi-infrastructure support.

Recently, OceanBase revealed that OB Cloud has served over 700 customers in the past two years, with the number of customers increasing by 130% year-on-year. It has met the diverse needs of customers, ranging from small-scale requirements of startups to large-scale database demands of mature enterprises. OB Cloud has also been honored as a "Notable Vendor" in Gartner's Magic Quadrant for Cloud Database Management Systems, a "Customers' Choice" in the Asia Pacific region, and a "High Performer" globally, with only 10 vendors worldwide achieving the former distinction.

Leveraging the power of cloud databases, OceanBase is accelerating its overseas expansion. Currently, OB Cloud supports services in over 100 availability zones across more than 30 global regions, with overseas customers including electronic wallet providers like DANA, PalmPay, and GCash.

In March this year, OceanBase took another step forward in independent operations by establishing a board of directors and independently facing the market. With the continuous development of its cloud database business, OceanBase is opening up a broader service market.

01

Modern data architectures are being reshaped

As a core IT infrastructure, databases have become an indispensable component in digital transformation. However, traditional data architectures are facing various challenges.

Firstly, with the advancement of digital transformation, data volumes are rapidly expanding, leaping from terabytes to petabytes and even zettabytes. Secondly, data silos and fragmentation are severe, necessitating different data models to describe business operations, posing significant challenges in data integration. Thirdly, beyond mere storage requirements, there is a growing emphasis on empowering businesses with data, leading to a surge in data analysis demands. Lastly, data security challenges persist, with many enterprises adopting multi-cloud deployments to increase backups for heterogeneous systems.

Faced with these challenges, traditional databases lack flexibility, struggling to handle large data volumes, high concurrency operations, and the operation and maintenance of multi-model data, let alone cost reduction and efficiency enhancement.

For instance, Pop Mart launched a blind box mini-program in 2018, bringing the fun of blind box drawing online and attracting a large fan base. However, as the volume of online blind box drawings increased, the scalability limitations of traditional centralized databases like MySQL often led to lags or delays, affecting user experience.

As traditional data architectures become increasingly inadequate for business needs, cloud databases are emerging as the mainstream.

According to Gartner's 2023 Global Cloud Database Market Share Analysis Report, the database management system market grew by 13.4% in 2023, with cloud database platforms driving this growth. Cloud databases now account for 61% of the overall market share, with cloud database incremental contributions exceeding 90%.

Cloud databases offer the advantages of elasticity, on-demand usage, and low cost, prompting more and more customers to migrate their database infrastructure from traditional hardware to the cloud. This was the impetus behind OB's foray into cloud databases in 2022.

According to Yin Boxue, General Manager of OceanBase's Public Cloud Business Unit, many customers have a demand for cloud migration. On the one hand, they hope to leverage the elasticity and cost-effectiveness of the cloud to meet their business development needs. On the other hand, the cloud also provides value-added services that self-built IDCs cannot or struggle to fulfill, such as AI, data analytics, and joint risk management. Most customers migrate a portion of their business and corresponding IT infrastructure to the cloud.

For example, many OB Cloud customers come from mobile payments and internet finance. These customers are actively expanding overseas but face significant challenges in deploying data centers locally due to high costs and management difficulties. As a result, most of them opt for cloud services overseas. OB Cloud has already secured numerous mobile payment customers overseas and aims to expand further globally, with services already available in over 30 countries and regions.

Another group of customers includes traditional manufacturing and retail industries that seek AI and data analytics capabilities from the cloud, which are costly to implement on private clouds. For instance, factories often have MES systems, but their IT teams and capabilities are limited, making cloud-based solutions more appealing for stability and professionalism.

Beyond migrating on-premises systems to the cloud, distributed databases are replacing centralized databases. Yin Boxue notes that database architectures have evolved from standalone deployments to clustered, then distributed, and finally cloud-native deployments. Today, the prevalent architecture is distributed across multiple clouds.

Traditional mainstream databases, such as MySQL and Oracle, have notable limitations. While they offer strong standalone performance, they struggle with high concurrency demands and lack the ability for peer-to-peer deployment and management on the same platform, necessitating significant operational costs.

Take Sichuan Rural Commercial Bank as an example. Serving over 60 million customers with nearly 5,000 branches, it faces unique challenges during the Spring Festival when transaction volumes double due to the large migrant population returning home. Under a traditional centralized architecture, IT resources must be scaled up for these peak periods, leading to significant redundancy and waste during off-peak times. This prompted Sichuan Rural Commercial Bank to transition to a scalable distributed database.

Moreover, prior to this transition, Sichuan Rural Commercial Bank managed six different databases, imposing a significant burden on IT operations. Each database required costly support services from the original vendors.

Traditional standalone databases lack scalability and rely heavily on underlying hardware performance improvements. Many enterprises now employ middleware-based sharding architectures, which, while offering some scalability, require substantial personnel investment and can disrupt front-end operations during resharding for new business requirements.

OB provides native distributed capabilities that do not disrupt operations when adding compute and storage nodes, offering simplified operations.

For instance, a renowned coffee brand previously relied on a centralized database to distribute coupons to members during holidays. Due to the large user base, coupon distribution took over 20 hours, affecting coupon redemption. By switching to OB's distributed database, coupon distribution time was reduced to just over ten minutes.

Furthermore, the coffee brand implemented a hybrid cloud deployment, running operations on self-built IDCs during off-peak hours and scaling up to public clouds during peak times. This solution reduced storage costs by two-thirds.

To facilitate a smoother migration for customers with traditional data architectures to native distributed databases, OceanBase has developed a comprehensive methodology and toolset, enabling seamless migration from Oracle and MySQL, often completed by customers themselves in significantly reduced timelines.

Previously, a domestic restaurant chain migrated its MySQL and Oracle databases to OceanBase in just two months, achieving multi-tenant hybrid deployment with an 89% data compression rate and a 40% overall cost reduction.

02

Multi-cloud: An opportunity for independent database vendors?

From centralized to distributed and on-premises to cloud, data architectures continue to evolve, reflecting changing customer demands.

On the one hand, these changes may cater to diverse business needs, while on the other, they stem from security and disaster recovery considerations. The prevalence of multi-cloud usage is making enterprise IT more complex, often requiring significant investments in database transformations for cross-cloud deployments.

"The native cloud databases hosted on different clouds cannot act as disaster recovery solutions for each other, nor can they maintain version uniformity," explained Yin Boxue, General Manager of OceanBase's Public Cloud Business Unit. Even relational databases based on MySQL may differ in versions, complicating interoperability.

This presents an advantage for OB as an independent database vendor. OB ensures interoperability across clouds with consistent versions and experiences. If a customer's business on Cloud A experiences downtime, OB Cloud can seamlessly switch operations to Cloud B within minutes, with no data loss. Such capabilities are often challenging to achieve on a single cloud platform. Additionally, OB's strong compatibility with databases like Oracle facilitates their migration to the cloud.

Built on a multi-cloud infrastructure, OB Cloud supports mainstream public cloud vendors globally, is compatible with MySQL and Oracle, and serves as an integrated database with both AP and KV engines. It currently supports tenant models like Table API and HBase and will soon introduce vector engines and Redis-compatible APIs on the cloud.

Unlike other public cloud database products limited by cross-cloud capabilities, OB Cloud integrates across multiple cloud infrastructures. Compared to traditional dedicated line solutions, OB's OSS-based public network access offers lower costs and flexible scaling.

However, Yin Boxue cautions that this solution requires careful consideration for businesses highly sensitive to Recovery Point Objective (RPO) as network jitter may increase latency between backup repositories.

Gu Xingyu, Senior Research Director at Gartner, notes that a unique advantage for Chinese vendors lies in China's complex cloud environment, creating a demand for a cloud-neutral transactional database deployable in enterprise core systems. From Gartner's perspective, this is an untapped blue ocean market. "We believe Chinese vendors have competitive potential," he said.

The multi-cloud environment presents opportunities for independent database vendors like OceanBase. Currently, OB Cloud is available on third-party platforms like Alibaba Cloud, Huawei Cloud, and AWS, enabling customers to enjoy consistent experiences across different infrastructures. With OB Cloud, customers can reduce their data access code from multiple cloud-specific databases to a single OB Cloud-focused code, significantly enhancing development and iteration efficiency.

Moreover, OB Cloud has developed cross-cloud cold and hot backup capabilities, even enabling multi-active and backup capabilities across continents and clouds, safeguarding customers from the instability of single cloud infrastructures.

Beyond migrating to cloud and distributed architectures, OB has adapted its database ecosystem, enabling customers to access DevOps and big data ecosystems in addition to services similar to those offered by Oracle and SQL.

03

What is the key to survival in the database competition?

Currently, China has nearly 300 database products, leading to intense competition. Besides the database offerings from major public cloud vendors, there are numerous independent database vendors like OB. However, both domestic and international markets do not require such a high number of homogenized database products.

Industry insiders predict that in the coming years, significant consolidation will occur among domestic database vendors, with only around ten players remaining, including both cloud service providers and independent database vendors. Accurately positioning oneself and building core technical barriers are crucial for survival in this competitive landscape.

Since its inception in 2010, OceanBase has pursued a path of pure self-research, addressing the unique challenges of massive data processing globally. It has set new standards for distributed database performance, disaster recovery, high availability, and architecture, and has withstood over a decade of internal scenario testing, serving customers with stable, reliable, and secure technology.

Since its official commercialization in 2022, OceanBase has established a clear lead in the on-premises market. In the financial sector, according to the latest IDC report on "China Financial Industry Distributed Transactional Database Market Share," OceanBase ranks first in on-premises deployments, serving 70% of banks with assets exceeding RMB 100 billion, 75% of top securities institutions, 65% of top insurance companies, and 45% of top fund companies.

Public information indicates that OceanBase also maintains a leading position in sectors like telecommunications, transportation, and energy.

In the broader cloud database market, OceanBase is not neglecting this new opportunity. Whether it can synchronize its technical advantages from on-premises deployments to the cloud and leverage its position as an independent database vendor in the competitive cloud database landscape will likely determine OceanBase's long-term growth potential.