Linux sales help Oracle database catch IBM: study

Oracle Corp. recovered ground in the worldwide relational database market last year to draw roughly level with IBM Corp., thanks in part to Oracle’s strong performance in the fast-growing Linux segment, according to new figures from Gartner Inc.

Microsoft Corp. also had a good year, increasing new license sales by 18 per cent to be the fastest growing database vendor, although it remained in third place behind longtime leaders Oracle and IBM.

Overall, sales of new relational database software licenses grew 10.3 per cent in 2004, to US$7.8 billion, Gartner said. That compared to growth of about five per cent in 2003 and a decline of six per cent in 2002.

IBM overtook Oracle in new license sales in 2001, according to Gartner, thanks partly to IBM’s acquisition of Informix. But IBM’s database sales grew just 5.8 per cent last year, to $2.66 billion, compared with growth of 14.6 per cent for Oracle, which had sales of $2.64 billion. The difference between the two was statistically insignificant, making it too close to declare a leader, Gartner said.

Much of IBM’s growth came from the zSeries, or mainframe, version of its DB2 database, although sales of DB2 on Unix also performed well, growing nine per cent, Gartner said. Sales of Informix, which IBM continues to develop but does little to market, declined 17.6 per cent to $111 million, according to Gartner.

Oracle has been heavily marketing Linux as a way for its customers to reduce costs, and the strategy appeared to pay off: Much of Oracle’s growth came from sales of its database on Linux, Gartner said. The Linux database segment remains relatively small overall, accounting for just $654.8 million of new license sales, but it more than doubled from 2003.

Database sales on Windows were also strong, growing 10 per cent from the previous year to account for $3.1 billion in new licenses. Microsoft grew its lead in this segment, accounting for just over half of all license revenue. The gains came despite the delays in Microsoft’s SQL Server 2005 database, code named Yukon.

Microsoft ended the year with 20 per cent of the database market, or $1.56 billion in new license sales, up from 18.7 per cent in 2003.

Gartner’s figures do not include maintenance fees, a significant source of database vendor revenues. New license sales are considered a good health indicator, however, as they show how much new business a vendor is attracting.

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