Gartner: IBM steals database crown from Oracle

IBM Corp. has dislodged Oracle Corp. from the top of the market for database management software, helped along by its billion-dollar purchase of Informix Corp., according to new figures that were released Tuesday by Gartner Inc.

In 2001, IBM and Informix captured a combined 34.6 per cent of worldwide new license revenue from database management systems (DBMS), besting Oracle’s 32.0 per cent, Gartner said. In 2000, the totals were 33.7 per cent for IBM-Informix and 34.1 per cent for Oracle.

The market as a whole generated US$8.8 billion, growing just 1.4 per cent from the previous year. By contrast, revenue climbed a brisk 10 per cent between 1999 and 2000, Gartner said.

Most DBMS vendors saw single-digit or negative growth, although Microsoft Corp. was a notable exception. The software giant saw revenue from new DBMS licenses climb 17.8 per cent, putting it in third place behind Oracle with 16.3 per cent of the market, Gartner said. Sybase was fourth with 2.6 per cent.

Oracle sought to downplay the numbers. The DBMS market includes all types of databases, including IBM’s mainframe databases and products such as Microsoft Access, running on both Unix and Windows, noted Rene Bonvanie, vice-president of Oracle 9i marketing.

But Gartner stuck by the validity of its figures. When customers are looking for a place to store data they consider all possible options, so mainframe databases and Microsoft Access were rightly included alongside Oracle, said Gartner analyst Betsy Burton.

In the narrower market for relational database management systems (RDBMS), which excludes mainframes and products like Access, Oracle held its lead with 39.8 per cent of new license revenue, down from 42.5 per cent a year ago, Gartner found. IBM-Informix took 34.1 per cent, up from 32.6 per cent in 2000. The RDBMS market accounted for US$7.1 billion revenue, or around 80 per cent of the total database market.

Narrowing the scope further, in the Unix section of the RDBMS market, worth about US$3 billion, Gartner’s results showed that Oracle retained a commanding lead with 63.3 per cent of revenue, compared with 24.7 per cent for IBM-Informix. Microsoft does not offer a database for Unix.

Asked why the company saw its share of the market slide, Burton said: “Oracle has a reputation as being costly and very, very tough to negotiate with. A lot of people have called into question their pricing and business practices…This is the perception, and in some cases the reality. So in tough economic times people are going to think twice about Oracle.”

Oracle has seen no evidence that customers are leaving for IBM and Microsoft, Bonvanie said, repeating an assertion made repeatedly in the past year by Oracle’s top executives. Instead, Oracle has suffered the most from the collapse of young Internet companies and telecommunication providers, which had driven its growth more than that of its rivals.

“What this research suggests is that Oracle is losing market share, and we have no proof whatsoever that that is happening,” Bonvanie said.

He also criticized IBM’s Informix acquisition, saying Big Blue spent US$1 billion to boost its market share by three percentage points.

IBM was undeterred.

“We’re thrilled to have captured the lead from Oracle,” said Jeff Jones, a director of strategy with IBM’s data management group.

Even without the Informix acquisition, he noted, Gartner’s figures showed IBM gaining ground against Oracle in the overall database market. Without Informix, IBM’s share of DBMS revenue increased from 30.3 per cent to 31.7 percent, while Oracle’s slid from 34.1 per cent to 32 per cent.

“We came roaring up behind them even without the Informix acquisition,” Jones said.

Still, Gartner made it clear that it was the Informix purchase that tipped the scales for IBM.

“Without Informix, the contest would have been essentially tied between IBM and Oracle, which were separated by a mere US$30 million in new license revenue,” the research firm said.

“When they bought Informix we said at the time that they were buying market share, and that’s what they did,” Burton said. With the Informix acquisition, “they now have 10 different database product lines and their challenge is to define a strategy.”

Oracle was also surpassed in the Windows market, where Microsoft took the lead. The Redmond, Wash., software maker took 39.9 per cent of new license revenue in that sector, up from 35.4 per cent in 2000. Oracle saw its share slip, from 38.1 per cent in 2000 to 34 per cent last year. The Windows database market as a whole was worth US$2.55 billion, up 11 per cent from 2000.

Some customers told Gartner that, while Microsoft’s database may not scale to the volumes of data handled by Oracle 9i or IBM’s DB2, they were attracted by the lower price tag and felt the product was “good enough,” Burton said.