A Shift Toward IBM's DB2?

Lately, a number of companies have decided to opt for IBM Corp.'s DB2 Universal Database away from Oracle Corp.'s Oracle8i. Are these moves a trend in the making?

Beginning late last year, IBM has been partnering with a number of independent software vendors (ISVs). Most recently, Big Blue teamed up with i2 Technologies Inc. (www.i2.com). I2 chose DB2 as its preferred database to use as a basis for developing new applications. Similarly, PeopleSoft Inc. (www.peoplesoft.com), Ariba Inc. (www.ariba.com), SAP AG (www.sap.com), and Siebel Systems Inc. (www.siebel.com) have moved toward DB2 and inked agreements with IBM, as well.

Few analysts, however, are calling the moves a trend. These companies are making the change to DB2 over Oracle8i because Oracle is developing products that are in direct competition with the application services those smaller companies offer.

"IBM is not in the business of providing applications for enterprises. We do not compete with Ariba, or Siebel, or SAP. We are middleware providers, the stuff you glue things together with. Since we don't compete, application vendors are finding DB2 attractive," says Jeff Jones, senior program manager, data management group, at IBM.

"There have been some high profile cases where companies have moved from an Oracle to an IBM database, notably SAP and i2," says Peter Urban, senior analyst of database technologies at AMR Research Inc. (www.amrresearch.com). "However, it is not as it seems. SAP has applications called R/3 and mySAP.com that competes with Oracle's ERP suite. One can view SAP's move from the Oracle to IBM database as a jab at a fierce ERP competitor."

IBM is also making it easier for companies to make the switch to DB2. "IBM has added a procedural language to make conversion from other databases easier, this should help its efforts to win transfers," Urban says. But despite IBM's plan, Oracle isn't losing sleep or money in process.

"Oracle's last quarter database sales increased 12 percent over the same quarter as a year ago," Urban says. Oracle needs to focus on its applications sales, "applications are where the growth is," he says.

Regardless of how many more companies make the move to DB2 from Oracle, IBM admits Oracle will not be cast aside.

"No one abandons Oracle completely," Jones says. "Many ISVs are now leading with DB2 and converting development to DB2 so that their applications exploit features on DB2 and will be more tightly integrated with DB2 before other platforms."

Ultimately, Urban does not see this as a particularly strong trend, if it is one at all. "I haven't seen a ton of people move from Oracle to IBM that are our clients. The problem is that conversion is difficult and costly."