Futuristic monitor showing information data on a dark background.

Image Credit: Yuichiro Chino

The marketplace for structured data storage continues to boom and newcomers are racing to compete for their share of the bits. Today, Neon, a fifteen-month-old startup, moved officially out of its invite-only mode and announced that it will be delivering what it calls “serverless PostgreSQL.” What was once a “limited preview” is becoming an open “technical preview.” Now, developers can build their applications on the well-known and trusted foundation of PostgreSQL with the freedom that comes from the serverless model. 

“We’re very focused on what we do and what we don’t do.” explained Nikita Shamgunov, the CEO of Neo. “It’s only PostgreSQL, only serverless, only OLTP, as opposed to OLAP. That is our secret sauce.”

Differentiation in a crowded market

Crowded with options, companies in this market aim to stand out. Any cloud companies like DigitalOcean or Vultr make it simple to start a PostgreSQL server using stock images. Some like Amazon also offer what they call “managed instances” adding some extra assistance with configuration and tweaking over time. 

Some other companies are going a step further and building full services. Startups like EnterpriseDB, Citus, Yugabyte and Crunchydata are also wrapping PostgreSQL with extra features that greatly simplify adoption. At the same time, companies like Planetscale and Oracle are doing something similar with MySQL, the other major open-source database with a significant following. 

Neon is embracing the serverless model, which is a bit of a misnomer. The servers are still there, but run completely by Neon. Developers send stock PostgreSQL queries to Neon and do not have to think about any of the other details of provisioning, installing or maintaining the hardware or the other parts of the software like the operating system. 

“At scale, using Postgres alone is challenging,” said Founders Fund principal, Leigh Marie
Braswell, one of the investors in the company. “Neon has built features that would’ve made my job as a developer easier in the past. The good news is that other developers can now take advantage of what Neon has to offer.”

The serverless model is generally priced according to usage, in this case by the transaction and the volume of data. Neon tracks usage and bills according to the amount on the virtual meter. The company will also be offering a free tier for developers starting to experiment.

Neon is also bringing an option for developers to make quick copies or branches of their installed data. Traditionally, databases maintained a monolithic version of the data and much of the work went into keeping it entirely consistent. Creating a branch makes it easy for developers to experiment with different versions of the main database without making entire copies. It makes updating and improving existing applications simpler. 

“I think that the moment you drop the barrier to entry to close to zero, in terms of doing something, people start to do it more and more,”  said Shamgunov. “We’re expecting similar things to happen when it comes down to  database application development.”

Database layers

Lately, Planetscale started offering developers the option to fork off versions of MySQL databases and now Neon is bringing this option to PostgreSQL developers. 

Neon also emphasizes their decision to separate the compute layer of the database, which processes the queries and returns results, from the storage layer, which is responsible for making permanent copies. This allows them to simplify the work of scaling and also add more options for delivering lower costs. Their version of PostgreSQL can off-load archival data to S3 buckets for cold storage. 

The company also celebrates its open-source foundation, which it expects will make its tool more desirable for companies worried about vendor lock-in. Neon has hired many active developers of the PostgreSQL core, and it expects to maintain compatibility with the main project moving forward. Other companies have taken hard forks of PostgreSQL, a break that may lead to problems in the long term if the code bases start to diverge. 

Neon has also open sourced their storage layer and is actively working with users to improve it. The code is written in Rust, a language that’s growing in popularity because it offers a high structured format for building multithreaded applications. 

“To the end user, it doesn’t matter if it is written in C++, C, Go or whatever,” explained Shamgunov “But from the standpoint of external contributions which we’re starting to have, it’s  actually quite important. It also gives us a higher overall engineering velocity for our team.”

Neon raised $24 million through its seed round and series A round from investors like Khosla Ventures, General Catalyst and Founders Fund.