Fluid Future

By Charles Garry  |  Posted 2005-08-03 Print this article Print

I dont believe that this prediction is inevitable, however. The future is a fluid concept (which makes it great for those of us that predict it), so I could be wrong if IBM were to begin acting as if it cared about its database business as a growth engine. I suggest IBM play to its strengths. It is much larger and significantly more revenue-diverse than Oracle.
IBM should begin to use this to its advantage the way Microsoft does so well. Shake things up by attacking Oracle where it is most vulnerable, licensing and pricing.
This is a land grab for market share, so IBM needs to do what is necessary to get DB2 LUW installed. I suggest they do so by eliminating license fees for DB2 LUW for servers up to four processors. Im talking about enterprise edition here, folks. This eliminates the confusion I spoke of in a previous column about database licensing complexity. This enables the market to easily download and freely install an unquestioned, top-of-the-line RDBMS. The four-processor limit still covers at least 80 percent of the database workloads running today. Im not talking about IBM open-sourcing the code; this is simply a licensing and pricing decision. Where does IBM make its money? Support services. Unlike MySQL, the vast majority of global 2000 companies would instantly become interested in deploying DB2 LUW for future applications or when significant application upgrades are needed. From my discussion with these types of companies, none of them are interested in going it alone without a support contract. Margins on support contracts are very strong, and since IBM is not saddled with the install base of an Oracle, they could grow revenues significantly. Once installed, IBM has an opportunity to keep selling into its install base with options such as data partitioning. There is also the revenue opportunity from customers who may need to run DB2 LUW eventually on servers larger than four processors (not cores). More installs means more people picking up DB2 skills, which only adds to the momentum. How would Oracle respond? Well, with more than 70 percent of its revenue tied to its database software sales, they better get real good at selling ERP applications. Microsoft could still hang, but such a move would also deal a blow to open-source database growth, or at the very least slow down its momentum and shift all the buzz to DB2 LUW. In any case, that would be my suggestion, but who listens to an agnostic, anyway? Charles Garry is an independent industry analyst based in Simsbury, Conn. He is a former vice president with META Groups Technology Research Services. He can be reached at cegarry@yahoo.com. Check out eWEEK.coms for the latest database news, reviews and analysis.


Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel