In-Depth

Oracle Still King of the RDBMS Heap

IBM, Microsoft post small gains

• By Stephen Swoyer
• 03/13/2003

IDC indicated that the RDBMS market continued to solidify around all three vendors, growing just 0.7 percent in 2002. In 2001, the company found, the RDBMS market grew at a 1.7 percent clip.

In a statement, Carl Olofson, research director for IDC’s information management and data integration service, said that performance varied widely among the top five vendors—Oracle, IBM, Microsoft, Sybase Inc. and NCR Teradata—in 2002. “[These] differences are attributable in large measure to differences in their business models, and to the segments of the RDBMS market in which they primarily are active."

Take Oracle, for example. Although it’s still the overall RDBMS market leader, its share dipped in 2002, from 42.5 percent in 2001 to 39.4 percent. But what hurt it most, IDC suggests, was flat growth in existing accounts, as well as IT over-spending on Oracle licenses during the last years of the dot.com boom.

Last year, many of Oracle’s customers didn’t add new servers or augment their existing capacity—Oracle charges a per-processor licensing fee for the use of its RDBMS—which had the effect of taking a big chunk out of the database giant’s bread-and-butter revenue source. Also, IDC says, IT organizations were still sitting on Oracle licenses that were purchased during a period of wildly unrealistic growth.

Pat Cicala, President of Cicala & Associates, an IT procurement and software asset management consulting practice based in Hoboken, N.J., says that this isn’t unusual: Many of her clients are over-invested in ERP and RDBMS licenses, she confirms, and—if anything—are trying to renegotiate the terms of their existing licensing contracts, rather than purchasing new software or licenses that they don’t need.

Movin’ On Up

Closing the gap with Oracle was IBM, which in 2002 controlled 33.6 percent of the RDBMS market—up from 31.1 percent in 2001. As in years past, Big Blue in 2002 was bolstered by revenue from mainframe (S/390, zSeries) and midrange customers (AS/400 and iSeries), which typically renew their database software licenses on an annual basis. Needless to say, IDC notes, this provides IBM with a more stable revenue base than other RDBMS vendors.

But IDC also found that Big Blue grew its market share on Windows, Unix and Linux platforms, as well—in part as a result of the pervasive influence of its IBM Global Services (IGS). In many cases, IDC suggests IGS has implemented Big Blue’s DB2 database in tandem with WebSphere Application Server to support application integration or customer relationship management deployments.

Finally, Microsoft Corp.’s strong growth—11.1 percent in 2002, up from 8.5 percent in 2001—was driven almost exclusively by its dominance in small-to-medium enterprise (SME) accounts, IDC confirmed.

Surprisingly, IDC found, NCR Teradata experienced good growth in 2002, largely as a result of unexpectedly strong growth in mid-tier database sever and BI/CRM deployments. Sybase, for its part, appeared stymied by the same problems that spavined Oracle—flat growth in large enterprise accounts.

Moving forward, IDC expects that both IBM and Oracle will increase their focus in the SME space, gaining share at Microsoft’s expense, but that the Redmond, Wash.-based software giant will also steal share from both vendors in large enterprise accounts.