Database Market Shrinking

IBM continues to gain on Oracle; Microsoft bucks the trend by growing its share of the SQL Server market

Don’t look now, but new research from Gartner suggests that perennial database market champ Oracle Corp. has been dethroned by arch-rival IBM Corp. Gartner’s research underscored the fact that 2002 was a dire year for nearly all RDBMS vendors—with the exception of Microsoft Corp.

The Gartner study flies in the face of research from International Data Corp. (IDC), which in its own tally of the RDBMS market in 2002, found that Oracle retained its market-share crown (

At least Gartner and IDC can agree on the basics: the RDBMS market was depressed in 2002. Gartner finds a 6.9 percent decline; IDC says the drop was 0.7 percent. Both companies report Microsoft Corp. experienced double-digit growth during the same period.

According to Gartner, new license software revenues for RDBMSes amounted to $6.6 billion in 2002, a drop from $7.1 billion in 2001.

If Gartner is to be believed, Oracle was hit the hardest in 2002, its revenues plunging by 20 percent and its once-dominant share of the overall RDBMS market eroding to 33.9 percent—good enough for second place to Big Blue. Oracle still was tops in the combined RDBMS market for Windows, Unix, and Linux systems, grabbing 43 percent of share in 2002. But the database giant—which has been tops on Windows for several years running—finally ceded its No. 1 position to Microsoft’s SQL Server product.

IDC, on the other hand, found that Oracle controlled 39.4 percent of the RDBMS market in 2002—down from 42.5 percent in 2001. In IDC’s estimation, that was enough to crown Oracle overall RDBMS market share champ for another year.

Gartner found that IBM's revenue dropped by nearly 1 percent in 2002 to $2.4 billion, which was still good for the overall market share lead at just over 36 percent. Gartner said that revenue growth from licensing of IBM's DB2 database on zSeries offset a double-digit decline in new licenses for DB2 on iSeries. This helped to keep IBM's new licensing revenue flat in 2002.

Here the Gartner numbers hew more closely to IDC’s own figures, which found that IBM grew its 2002 RDBMS share to 33.6 percent of the overall market—up from 31.1 percent in 2001. In contrast to Gartner, IDC cited strong growth in new DB2 licensing for both zSeries and iSeries, however.

Elsewhere, Gartner found that Microsoft enjoyed growing revenue and market share during 2002. The software giant’s SQL Server database had revenue growth of nearly 17 percent to almost $1.2 billion from $1 billion in 2001. Microsoft's market share rose from 14.3 percent of the overall market in 2001 to 18 percent in 2002.

IDC says that Microsoft controls 11.1 percent of the overall RDBMS market.

Finally, Gartner indicates that NCR Corp., which markets the Teradata RDBMS, also grew revenues during 2002—albeit at a smaller scale than any of the largest market leaders. NCR grew Teradata revenues 7 percent to $181 million in 2002. The company's overall market share is 2.7 percent.

According to Gartner, IBM, Oracle, Microsoft, and NCR accounted for almost 91 percent of the RDBMS market in 2002.

Robert Shimp, VP of Oracle database marketing, disputes Gartner’s data, citing the conflicting report from IDC, along with the lack of standardization among vendors for reporting revenue and tabulating market share. “There’s a great deal of confusion about how to report revenue figures and market share, and how you slice and dice all of this stuff,” Shimp comments. “Oracle’s numbers come from our SEC filings, but everybody else's—Microsoft’s, IBM’s—they are all unaudited figures that are open to interpretation. It’s highly dependent on how you divide up licensing fees, support fees, and other revenue.”

Shimp also disputes the notion that IBM has been closing the gap with his company. “I don’t believe that they are catching up to us in this marketplace. We have a huge technology lead,” he asserts. “You’ll find that Oracle continues to be the preferred database in large enterprises. People are continuing to use our database first. We don’t lose to IBM and Microsoft in accounts where we compete.”

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About the Author

Stephen Swoyer is a Nashville, TN-based freelance journalist who writes about technology.