Real, Live Competition Rules

If there were a test to prove healthy competition, it could be escalating rhetoric in a particular market-say, databases.

If there were a test to prove healthy competition, it could be escalating rhetoric in a particular market—say, databases. IBM has turned up the volume during the past few months, claiming it is steadily catching up to all-powerful Oracle.

IBM says DB2 sales surged 56 percent in the third quarter over the year-ago quarter, representing its 18th consecutive quarter of growth. It points to third-party research showing DB2 growing faster than Oracle and its adoption as the preferred database for key ISVs such as SAP and Siebel.

Oracle, whose most recent quarter yielded a respectable net profit of $549 million on a $300 million decline in revenue, responds with its own claims, such as maintaining a healthy 70 percent database share on all SAP applications.

Dont count on the heated exchanges to end soon because the numbers can be tilted the way either side wants. For instance, both claim their database is two to three times cheaper than the others. Asked if IBM was "breathing down its neck," Oracle Senior Vice President Jeremy Burton said, "Emphatically no. Its a lot of chest beating."

IBM Data Management Solutions General Manager Janet Perna takes the high road: "We had a fabulous year in 2001. We have to be picking up share."

An IBM spokeswoman puts it bluntly: "Oracle is making enormous false claims about our revenue. Theyre reacting to our momentum."

How ungentlemanly is it getting? Well, IBM has a unique "Press on Oracle" link on its Web site, making sure visitors dont miss unflattering stories about its rival.

Oracle has one fact in its favor, and that is IBMs long-standing policy not to disclose database license revenues. Gartner pegs new IBM database licenses at $2.28 billion in 2000 (adding in Informix), which the spokeswoman says "is close." Thats compared with $2.96 billion for Oracle in 2000.

But Oracle reports everything, warts and all, including 9 percent and 7.3 percent declines in software licenses for the past two quarters.

Lets not forget Microsoft, which dominates the NT market with SQL Server. However, the Unix database remains the biggest market, and at least through 2000, Oracle owned 66.2 percent vs. IBM, next closest at 14.4 percent, according to the Gartner data. Of course, 2001 could be another story.

For its part, IBM thinks data management is a two-horse race, while Burton says Microsoft and IBM are slugging it out for runner-up. "When we go in an account, theres only one company we are competing with, and thats Oracle," Perna insists.

Competition is a beautiful thing.

Oracles still biggest, but whos baddest? Write to me at [email protected]