The Burgeoning NT Database Market
Recent news about databases would have you believe that the market is saturated and the technology is on its way to becoming irrelevant. For enterprise Windows NT shops, nothing could be further from the truth.
Database product sales are booming for certain Windows NT vendors, and database technology is expanding its reach into new application areas. Corporations that rely on enterprise-level Windows NT are poised to use their database systems to gain competitive advantage and deliver new value to their organizations.
The perception that the database market is becoming saturated has been fueled in past months by the disappointing quarterly earnings statements of several prominent vendors. Industry watchers argue that this news is not what it seems.
In the UNIX and mainframe markets, slowing of database sales may be related to a maturing market. Vendors such as Oracle Corp. (Redwood Shores, Calif., www.oracle.com) and Sybase Inc. (Emeryville, Calif., www.sybase.com), which have long led the competition in these markets, have suffered most in recent months. Other vendors hint that poor marketing or technology planning may be to blame.
Even technology overload may be contributing to the problem of the slowing of UNIX and mainframe database sales. "A lot of IT people are trying to do meat-and-potatoes kinds of operations," says Robert Craig, vice president of applications architectures for Hurwitz Group (Framingham, Mass.). In trying to meet their daily job requirements, they simply are unable to focus on new database functionality that vendors promote.
Combined with the exasperating and expensive year 2000 problem, buyers have no appetite for new database products. "Vendors are pushing new technologies down peoples' throats, and they're starting to gag," Craig says.
Unlike these platforms, however, the Windows NT database market is showing no signs of slowing down; in fact, all signals point to substantial growth.
Microsoft Corp. and IBM Corp. both cite dramatic growth statistics for their Windows NT database products. Microsoft is experiencing 100 percent license growth from quarter to quarter and year to year, according to Microsoft SQL Server lead project manager Doug Leland.
"We're having a great time," says Jeff Jones, program manager for data management marketing for IBM. From the fourth quarter of 1996 to the same period in 1997, IBM's data management sales grew 60 percent. From the first quarter in 1997 to the same period this year, sales grew 110 percent. Led by IBM's DB2 Universal Database 5.0, database sales have been especially strong in the NT market.
Canning the NT Database Solution
One possible explanation for the growth of database products in the enterprise Windows NT environment is the atypical way in which they are sold.
In most markets, the database is the centerpiece around which the system is built, explains Carl Olofson, research director of database management services for International Data Corp. (IDC, Framingham, Mass.). But the domination of the NT marketplace by packaged application vendors and solution providers has created an environment in which the database is merely one component in the total systems solution, he says. Rather than assessing each portion of the system for its technical functionality and ability to meet site requirements, IS managers are more likely to identify the business problem and invite vendors to propose a total solution of hardware, software and services.
Most buyers, especially at low- to middle-end NT sites, are more concerned about the price and ease of use of a database product than technical issues such as how efficiently the product uses disk space or its transaction rates, Olofson says. For these users, a comprehensive, prepackaged product such as SQL Server offers advantages that databases with more complex functionality cannot match.
This is not to suggest that technology is unimportant in the Windows NT database selection process. The larger and more complex a site's NT implementation, the more important database functionality becomes. Database products that are well-suited for enterprise NT sites offer richer functionality than those favored by the mid- to low-end, Olofson adds.
Industry watchers can infer that this difference explains the effectiveness of the Microsoft SQL Server strategy against products from Oracle at the lower end of the scale, he says. "Microsoft has a natural advantage [there,] since -- in the absence of a close-in technological evaluation -- they can win on the basis of price and they can leverage their control of the platform," he says.
Yet at the enterprise level, IS managers need an industrial-strength Windows NT database product. And vendors are just beginning to deliver the goods.
With its refurbished DB2, for example, IBM is extensible to support object and relational data, including large objects of up to 2 GB. The product scales across the enterprise from laptops to mainframes, can be managed graphically, and can be used with applications ranging from decision support to data mining to online transaction processing. In February, IBM demonstrated an optimized DB2 for Intel platforms that scaled to six-way massively parallel processing on NT.
IBM is not the only vendor shooting for the high end, however. The Oracle8 database is designed to provide reliable data management that fills in the gaps left by NT, says David Appelbaum, senior technical director for Oracle.
For sites performing mission-critical tasks on the NT platform, Oracle8 offers two clustering options. Oracle8 integrates with Microsoft Cluster Server (MSCS). It also offers a feature called Parallel Server, which currently supports four nodes but is expected to scale to 16 nodes by the end of the year. Oracle8 also supports 64-bit computing, caching of up to 8 GB of RAM, and support for object storage, says Appelbaum. Each of these technical enhancements is designed to serve the decision support needs of enterprise NT sites, he adds.
Focus on Database Applications
Oracle is not the only vendor focused on corporations' ultimate database applications. For Sybase, the entire game plan for its enterprise Windows NT strategy revolves around identifying corporate strengths and matching those to the applications needed by enterprise-level NT customers. "We want to focus on areas where we can win," says senior product manager Chuck Lownie.
To this end, Sybase has identified three high-growth application areas where it focuses its efforts: occasionally connected computing, data warehousing and Web computing.
Lownie sees this as relevant because Sybase is not investing in niche technologies except as they support the overall applications focus. "We're not saying, 'We have Java, buy us,'" he says, although Sybase supports Java. "Instead, we say, 'We have the best occasionally connected solution,' because we can offer a small footprint, built-in replication and a multitiered database strategy."
Database vendors bristle at the suggestion that they may be promoting the newest technology trends for the sake of appearing current. Each vendor denies marketing Java, for example, except as it is necessary to support the new and expanding applications goals of Windows NT customers. Technologies such as Java are "acting as enzymes in [database] sales, not drivers," says IBM's Jones.
Most of the important application areas, such as data warehousing, are so comprehensive that they cannot be considered niche areas, adds Leland of Microsoft. Data warehousing is predominantly used by larger companies and higher-end medium-sized companies because it is expensive to acquire and complex to implement and use, he says.
"This is one of the things we hope to change" with SQL Server 7.0, Leland states. "We will be putting the Microsoft stamp -- ease of use and lower complexity -- on these applications."
The Microsoft Influence
As with many of the markets it enters, Microsoft is definitely reshaping expectations for database technology. Although observers say that SQL Server 7.0 is not revolutionary from a technical point of view, Microsoft's ability to deliver technology to the desktop that was not long ago restricted to mainframes is notable.
"In many ways, SQL Server 7.0 is a fairly traditional relational database," confirms IDC's Olofson. "But it represents a significant move forward for Microsoft, because it brings their middle-level database technology up to par with their competitors and perhaps even beyond in some aspects."
And in the critical database technology-enabled applications area, Microsoft may have an important influence on the market. Teresa Wingfield, research director for Giga Information Group (Santa Clara, Calif.), studies the data warehousing marketplace. She is expecting Microsoft database technology, such as its Data Transformation Services tool, to be priced close to free, creating an avalanche in the prices of other database products.
Although SQL Server 7.0 may not play in the same league as high-end enterprise Windows NT products, Microsoft's business strategies have a long reach, Wingfield says. "What Microsoft is doing will affect the people that are trying to take salvation in the enterprise market, because it will reset people's expectations for what they should pay for these technologies," she says. "As much as it's fashionable these days to bash Microsoft, they do have the industry clout to push standards, reduce prices and reduce complexity."
As the database market for enterprise Windows NT continues to mature, expect more technology enhancements and definitely more price-based competition -- all of which will lead to more battles among the big database vendors. And as you follow the news about database issues, be careful what you believe: When it comes to trends in the NT database market, no news is merely a lull in the ongoing action.