IDC: Database software market heading to $20B

Despite the setbacks caused by last year’s tight economic environment, worldwide sales of relational and object-relational database management systems (RDBMS) are poised to surge once again, growing to a US$20 billion market by 2006, according to a report released Wednesday by IDC.

Although widespread IT spending cutbacks in 2001 left RDBMS vendors focusing on the middle market rather than high-end clients, the market will begin to mature as service providers start to ramp up their buying in 2004, IDC said. (IDC is a division of International Data Group Inc., the parent company of the IDG News Service.)

The market landscape has changed due to last year’s tough economic climate, however, as some smaller vendors had to close down while industry stalwarts such as Progress Software Corp. were able to stay in the game, according to IDC. Additionally, vendors with solid tracks in the middle market fared better than those dependent on large contracts, given spending cutbacks and contract cancellations.

According to the Framingham researcher, Microsoft Corp. thrived last year while Oracle Corp.’s standing slipped somewhat, although it continues to be the market leader.

Microsoft’s success was based on the fact that the company’s RDBMS software is fairly low-priced, has strong reseller channels, and sells to the middle market, according to Carl Olofson, Application Development and Deployment research director at IDC. Oracle, on the other hand, lost ground because a lot of its revenue is derived from high-end products sold to large accounts, Olofson said.

Meanwhile, IBM Corp.’s growth was aided by the company’s acquisition of Informix Corp.’s RDBMS products.

The upswing in the RDBMS market will come as more online service providers seek to offer IT services over the Internet, Olofson said.

“Those vendors will need highly scalable and robust database software to be successful,” he added.

While the online services market was not mature enough previously to produce a spike in RDBMS sales, given a lack of standards and communications, Olofson described the present online services market as “green field” for database software vendors.

IDC is online at