Oracle Takes Hits From All Sides

Database lead lost to IBM, report says; Calif. talks start on rescinding pact.

Oracle Corp. this week will release Oracle9i Database Release 2 amid news that the company is losing ground in the market to IBM and as the company faces renewed questions about its business practices.

Last week, Oracle fell from the top spot in overall database market share, replaced by rival IBM, according to 2001 market research from Gartner Dataquest, of San Jose, Calif. The Redwood Shores, Calif., software maker also began discussions with state of California officials about rescinding a six-year, $95 million enterprise licensing agreement for its 8i database software in the wake of a political controversy over the deal.

"Oracle has to respond and do some things differently to win customers back or change perceptions," said a senior database administrator at a Fortune 500 office supplies maker, who asked not to be named.

With 9i Release 2, Oracle is bolstering many efforts begun in 9i that it believes will spur migration. The release, among other things, adds native support of XML within the database engine, more business intelligence capabilities and further self-management features. It will be introduced on Sun Microsystems Inc.s Solaris this week for download through the online Oracle Technology Network, or OTN, Oracle officials said. Other platforms, including Unix and Windows versions, will follow in coming weeks, they said.

Oracle market share

Gregg Houghton, database manager at Inland Paperboard and Packaging Inc., in Indianapolis, said his company is considering migrating from 8i to 9i by the end of the year to match expansions in its operations.

"[The release] is on mark with what were trying to do," Houghton said, noting features such as the ability to use a standby database for reporting purposes.

Up until now, however, migrations to 9i have been slow. Oracle officials recently said about 15 percent of the companys customers have adopted 9i, and the company is betting that 60 to 70 percent will migrate by the end of the year.

But even when customers want new features, migration often isnt a viable option. The senior DBA at the Fortune 500 office supplies maker said shes hamstrung in upgrading because her company is using an earlier version of PeopleSoft Inc.s enterprise resource planning software that doesnt support 9i and isnt planning to upgrade the PeopleSoft version any time soon.

Along with slow migration, Oracle is facing a drop in new sales of its database software (see chart).

Oracle last week disputed Gartners numbers, but Gartner said the numbers are based on an independent assessment, including user and vendor interviews, and not just vendor-supplied data.