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    Home Latest News

      IBM Tops Oracle in Database Sales

      By
      Matthew Hicks
      -
      May 7, 2002
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        Oracle Corp. has lost its reign atop the market for new database sales as IBM overtook it by just under 3 percentage points, according to a 2001 database market report being released Tuesday by Dataquest Inc., a unit of Gartner Inc.

        IBM held 34.6 percent of the overall market for new database license sales in 2001, up from 33.7 percent in 2000. Oracle fell to 32 percent in 2001, from 34.1 percent in 2000. Microsoft remained third in market share, but scored the biggest jump to 16.3 percent in 2001 from 14 percent market share a year ago.

        Overall, the database software market grew 1.4 percent to $8.8 billion in 2001, much slower than the 10 percent gain a year earlier, according to Gartner Dataquest, of San Jose, Calif.

        IBM was bolstered by last years $1 billion acquisition of Informix Corp. “When IBM made the acquisition of Informix, they absolutely bought market share,” said Gartner analyst Betsy Burton.

        The acquisition, though, doesnt account for all of IBMs gains. Informix alone had the fourth highest market share with 3.0 percent in 2001. Without the Informix sales, IBM would have been essentially tied with Oracle with only 0.3 percentage points below.

        Of the big three vendors, Oracle was the only one whose sales fell overall and across specific categories such as relational databases and in the Windows and Unix markets. The Redwood Shores, Calif., companys database software is widely considered more expensive than those of its competitors, and even though Oracle made major changes to pricing in its 9i version, that reputation continues, Burton said. In fact, Gartner and research firm Meta Group Inc. both issued separate reports in March slamming Oracle for its tough licensing tactics with customers.

        “When people run into economic hard times, they do belt tightening, and Oracle has a reputation of being quite costly and difficult to negotiate with,” Burton said.

        Oracle officials themselves say that the economic slowdown has hurt new sales in once high-flying customer categories such as telecommunications and dot-coms. But, said Rene Bonvanie, vice president of Oracle9i marketing, the market share numbers dont reflect what is happening with Oracles current installed base. That base of customers accounts for about 75 percent of the companys database revenues, rather than new sales, and is not defecting to other database vendors, he said.

        Oracle also on Monday, ahead of Dataquests news, touted a survey by the FactPoint Group, of Los Altos, Calif., that showed it remains the dominant database vendor among Fortune 100 companies with 51 percent of those companies using Oracle as their primary vendor. Bonvanie also questioned IBMs wisdom in buying Informix.

        “Were seeing that IBM has certainly bought their way into the market using their Informix purchase to become No. 1 here, ” he said. “[But] its an eroding part of the market.”

        IBM officials dismissed Oracles take, instead pointing out that DB2 has posted revenue growth for 20 consecutive quarters while Oracle has been battling a revenue decline in its database business. Jeff Jones, director of strategy for data management, said that while the addition of Informix helped, DB2 itself has become more attractive to customers because it provides a better value than Oracle.

        “Customers are agreeing that this combination in DB2 [of] great service, great technology and a great price [is] really attractive, and were getting a whole lot more business and I think the numbers show it,” Jones said.

        Beyond the battle between IBM and Oracle, Microsoft posted some of the strongest growth in new licenses. Along with a 17.8 percent gain overall, the Redmond, Wash., software maker also posted the highest growth in the relational database category with a 25.3 percent gain and, not surprisingly, sat atop the Windows market for relational databases, according to Dataquest.

        Oracle remained the relational database and Unix leader with 39.8 percent and 63.3 percent market shares for new sales, respectively. But in both cases it lost share to IBM.

        Matthew Hicks
        As an online reporter for eWEEK.com, Matt Hicks covers the fast-changing developments in Internet technologies. His coverage includes the growing field of Web conferencing software and services. With eight years as a business and technology journalist, Matt has gained insight into the market strategies of IT vendors as well as the needs of enterprise IT managers. He joined Ziff Davis in 1999 as a staff writer for the former Strategies section of eWEEK, where he wrote in-depth features about corporate strategies for e-business and enterprise software. In 2002, he moved to the News department at the magazine as a senior writer specializing in coverage of database software and enterprise networking. Later that year Matt started a yearlong fellowship in Washington, DC, after being awarded an American Political Science Association Congressional Fellowship for Journalist. As a fellow, he spent nine months working on policy issues, including technology policy, in for a Member of the U.S. House of Representatives. He rejoined Ziff Davis in August 2003 as a reporter dedicated to online coverage for eWEEK.com. Along with Web conferencing, he follows search engines, Web browsers, speech technology and the Internet domain-naming system.
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