The database market grew by 10.3 percent in 2004, fueled largely by hunger for business
intelligence and analytics, according to numbers released by the Gartner Group on Monday.
With 34.1 percent of the overall market, IBM holds a slim margin over its closest
competitor, Oracle Corp., which maintains 33.7 percent of the overall market. Microsoft
Corp. follows up with 20 percent of the market. NCR Teradata Corp. controls 2.9 percent,
Sybase Inc. claims 2.3 percent and others hold 6.6 percent. ADVERTISEMENT
The market growth figure doubles that of RDBMS (relational DBMS) market growth in 2003,
which was 5 percent, according to Gartner Inc.'s Colleen Graham, who authored the report.
"[The growth] came a lot from BI, data warehousing and data analysis," she said. "You can
tell that if you look at [NCR]; they had really strong growth, and they're a
data-warehousing database. That's where we're seeing a lot of this come from."
The market grew from just under $7.1 billion in 2003 to nearly $7.8 billion in terms of new
license sales. The continuing weakness of the U.S. dollar artificially inflated market
growth to some degree, Graham said, accounting for some 3 to 4 percent of overall growth.
"[Overall market growth] was probably somewhere between 6 and 7 percent," she said, after
considering that sales outside of the United States, when converted to U.S. dollars,
contributed more to vendor revenue because of currency conversion, as opposed to increased
demand.
Microsoft and Teradata led in terms of overall growth, with 18 percent and 17 percent,
respectively. However, there was no clear winner in market share overall. Because the
difference between RDBMS revenue for IBM and Oracle was less than $30 million, it is
statistically too close to declare a winner, according to the report, titled "No Clear
Winner in Overall RDBMS Market Share Race."
Read details here about Oracle's PIM Data Hub.
Winner or no winner, vendors were quick to point out the rosy parts of the picture.
Willie Hardie, Oracle's senior director of Database Product Marketing, found evidence that
the market is buying into the database company's grid vision and its pushing of RAC (Real
Application Clusters) clustering on commodity servers running on the Linux platform.
"Forget about databases specifically and look at server sales," said Hardie, in Redwood
Shores, Calif. "The growth market in servers is in small servers, with clustering of small
servers. That matches closely to Oracle's grid model: don't buy big servers; cluster
together boxes running Linux or Windows. No doubt there's a trend in the industry moving in
that direction, somewhat reflected in Oracle's growth in 2004."
The market for RDBMS on Linux, meanwhile, is red-hot. While still a relatively small part of
the overall RDBMS market, the Linux segment grew 118 percent in 2004, more than doubling
from $300 million in 2003 to more than $650 million in 2004.
Gartner found that Oracle has a growing lead over IBM in this subsection of the market, with
growth of 155 percent. Oracle now controls 80.5 percent of the Linux RDBMS market, up from
69 percent a year ago. IBM, meanwhile, slipped in 2004, coming to rest at 16.5 percent of
the market from year-ago figures of 28.4 percent of the market.
The Gartner report pointed out that Linux RDBMS revenue includes sales of Oracle 9i RAC,
which adds about a 50 percent premium on top of regular RDBMS license fees for that company.
Bob Picciano, vice president of database servers for IBM, said Oracle's growing Linux lead
is artificially puffed up by those add-on RAC fees. "What Oracle is doing is, they're
migrating their own Unix base to the Linux platform," said Picciano, in Somers, N.Y. "In the
process, they're increasing the cost of software to those clients, by introducing the cost
of RAC."
"Few users are acquiring Oracle for the Linux platform without the RAC option," the Gartner
report states. "Almost 20 percent to 30 percent of Oracle RAC deployments are estimated to
be on the Linux platform."
Hardie said the demand for Linux shows no signs of abating, coming from virtually all the
vertical industries and including implementations of data warehousing on clustered RAC-that
clearly not being a solution for the needs of a niche, he said.
IBM is set to fight back with DB2 features that compete with RAC. In particular, the
company's release of "Stinger," the next version of DB2, is optimized for Version 2.6 of the
Linux kernel, a move that's geared toward helping database clusters scale higher and perform
faster.
It is also intended to better exploit the speed of 64-bit databases and servers that rely on
multiple processors.
IBM's promise is that such multiprocessor servers can be joined in Linux clusters, as with
DB2 ICE (Integrated Cluster Environment), an integrated package that combines DB2 and
eServer Linux Cluster 1350 (xSeries, 325, BladeCenter) to provide a solution that, according
to IBM, can cluster from two to 1,000 servers and pick up nodes at the rate of four per
hour.
Picciano also pointed to Stinger's HADR (High Availability and Disaster Recovery) as being
the key to IBM's ability to deliver high availability at a fraction of the cost of Oracle
RAC.
"With RAC, the client needs to license all the processors on both boxes, and they need to
license the RAC feature," he said. "With HADR, you pay for processors on the primary [box]
and for one processor on the standby box. So the cost savings is much greater."
Picciano said that HADR has helped IBM do battle in sales situations where IBM and Microsoft
are in the room. "We're winning 89.4 percent of the time we're engaging against Oracle and
Microsoft" according to Q1 2005 numbers, he said, thanks not only to HADR but also to a
retrained sales team and the decision to price servers at the chip level rather than the
core level.
Microsoft, predictably, scoffed at the growth of the Linux database market. "Look at it:
It's a small market," said Tom Rizzo, director of product management for SQL Server. "You'd
expect some growth there, from such a small base."
Rizzo pointed to the healthy growth in the Windows database market as evidence that Windows
is "eating away at the Linux camp" rather than the other way around. The RDBMS market on the
Windows server platform grew 10 percent in 2004. Microsoft's market share grew 18 percent in
this segment.
Click here to read more about the increasing market share of open-source database
PostgreSQL.
That gave Microsoft 50.9 percent of the Windows RDBMS market, up from 47.4 percent in 2003.
IBM posted a 4 percent decline in this market segment, which followed a nearly 12 percent
decline in 2003-a slippage Gartner attributed to weak adoption of DB2 8.
Graham said she was surprised to see Microsoft do so well, given that the release of SQL
Server 2005, code-named Yukon, has been delayed so often and so long.
"We do our forecast and say 'OK, each of these vendors, which is coming out with a new
product? Where's each one been in the product lifecycle?'" she said. "To see Microsoft have
growth this strong, even before they release Yukon, that struck me as interesting. People
aren't waiting."
Much of Microsoft's success likely goes back to the overall interest in BI, Graham said-a
premise that Rizzo seconded. "BI is a tremendous growth driver for us, especially Reporting
Services, which we've seen a ton of customers buying and deploying," he said.
"That's why we invested so heavily in BI technologies across SQL Server. We put a down
payment many years ago, and now it's paying off in terms of revenue growth," Rizzo added,
pointing to the company's release of OLAP (online analytical processing) services in 1998,
which was the first of a string of BI technologies integrated into the database itself.
"People looked at us like we were kind of crazy," Rizzo said. "[They asked,] 'Why is
Microsoft integrating BI into the database? Most people buy it separately.' We're saying .
integrate it seamlessly into the database. All the people who thought we had four heads and
eight eyes, you look at the strategies of our competitors, they're starting to go down the
same path we started down years ago."
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