Oracle Leads the Database Pack

Oracle maintained a healthy lead over rivals IBM and Microsoft in the market for relational database management system (RDBMS) software, but Microsoft posted faster sales growth in 2006, according to a report from market research firm IDC. The report, which IDC said is based on preliminary data, found that the RDBMS software market grew 14.3 percent last year to $16.5 billion--not bad for what many industry pundits once considered to be a mature, slow-growing market. Oracle's RDBMS software license sales grew 14.7 percent in 2006 to more than $7.3 billion, giving it a 44.4 percent share of the total market. Oracle executives were quick to crow about the report: "Oracle remains well out in front as the No. 1 choice in the database market," said Willie Hardie, Oracle database marketing vice president, in a release. IBM retained second place with 21 percent of the market, as its DB2 database license sales increased 11.9 percent to $3.5 billion in 2006. Microsoft, nipping at IBM's heels, again grew the most. The software giant, which now commands 18.6 percent of the market, saw license sales of its database products increase 25 percent to nearly $3.1 billion and gained strength with its SQL Server 2005 offering in the enterprise segment. By growing slower than the market average, IBM's market share actually dipped last year, while Oracle and Microsoft captured bigger slices of the database market pie IDC analyst and report author Carl Olofson attributed Oracle's solid sales to strong acceptance of its 10g R2 database release, certain software features in R2, and new penetration into the SMB segment. Oracle has been making a big push into enterprise applications in recent years, especially with its acquisitions of PeopleSoft and Siebel Systems; Hardie said application sales are a big driver for the Oracle 10g database software. He also said Oracle has accelerated sales of its database products to small and midsize businesses. IDC noted that increased license fees tied to processor-related upgrades also boosted Oracle's revenue. Sybase and NCR Teradata came in fourth and fifth, with 3.2 and 2.8 percent of the total database market, respectively. Small vendors, including open source provider MySQL AB, accounted for almost 10 percent of the market in 2006. Olofson attributes the $2 billion license revenue growth from 2005 to 2006 to large vendors exploiting new markets in the Asia-Pacific region in addition to selling their hardware and add-on features to smaller businesses. Olofson says that while Oracle, IBM, and Microsoft command more than 80 percent of the market, Sybase, NCR Teradata, MySQL, and others should continue to develop "indirect strategies to sell in a market dominated by these three." IDC does not include nonrelational database sales in its market numbers, which diminishes IBM's numbers given that it does a healthy business in selling legacy database software for its mainframes. Gartner, which has not released its accounting of the 2006 database market yet, includes those sales, giving IBM bigger sales numbers and a market share much closer to Oracle. The IDC report said IBM reported "substantial net increases in new DB2 sites and users across the board." Related articles: Partner Day at Oracle OpenWorld Out of the Database and Into Business Processes