Oracle, IBM fight on all fronts

The database wars of the 1980s and 1990s were painful and bruising affairs that saw a once abundant vendor market pared down to just a handful of contenders.

While Oracle and IBM firmly established themselves at the top of the pile, products such as Informix and Sybase took a heavy beating. Many others barely survived the battle before disappearing into obscurity.

The balance of power has not shifted substantially over the ensuing years. There is, however, a new contender in the form of Microsoft and although most of its competitors tend to disparage the foothold it has gained in the market, it is a company that deserves caution from its competitors, as the software developer should not be underestimated.

DB2`s pricing clearly places it in the medium-sized business market.

Simon Jeggo, DMS Pillar manager, IBM

Along with this subtle shift in power comes a more significant change in the language of the database vendors. It is a fact best illustrated by Oracle`s resistance to being labelled a database company, preferring something along the lines of "application provider" or "information solution provider".

The change in language is not just vanity, however, it reflects a significant change in the role of the database in the enterprise world. Databases are no longer just seen as the repositories of data on which increasingly complex queries are performed. Databases today compete on a range of built-in analytical tools and serve up "information" rather than just data.

A Gartner report published in May pointed to the fact that the database market increased by 10% between 1999 and 2000, significantly down on the previous year`s 17% growth. And while the overall growth in the market slowed over the previous year, the two big players in the market, Oracle and IBM, both racked up suitably impressive growth figures. The biggest growth was achieved by Microsoft, which emerged 25% stronger than the previous year, lifting its market share to just under 15%.

In the same report, Oracle took pole position with 33.8% and IBM was close on its heels with 30.1% of the market by licences sold. The big loser was the recent IBM acquisition Informix, which lost a significant 33% market share, a fact many commentators put down to a lack of certainty around the future direction of the product.

When it comes to relational database management systems, the field is more clearly defined with Oracle top of the pile with more than 40% of the market, followed by IBM at 29% (not including the 3% share held by Informix) and Microsoft at 12.7%. Again, Informix suffered significant losses with a 35% decline in share.

A few years ago Microsoft did not think Linux was a threat. Today Linux could well be its biggest competitor.

Deon Roos, product manager, server technologies, Oracle

Despite Microsoft`s lead in the NT-based RDBMS market with 38% market share, the company holds only a slim lead over chief rival in this sector Oracle (37%) while IBM is a distant third with 18%.

Microsoft is a tenacious competitor, a sentiment reflected in comments by Bren Newman, program manager at Microsoft`s SQL Server Development Organisation, who says the company is now in a position to take on all players in the database market. And for a product that started out as a workgroup and departmental server, the company is ambitious: "We could take on 99.9% of the market with our latest offering... with no ifs and buts," says Newman.

The strengths of the Microsoft offering, he points out, are ease of administration, implementation and cost, with the latter very clearly underlined. This is as much a cost war for Microsoft as anything else, and it is a factor that could well have precipitated the latest database scuffle. Microsoft`s aggressive pricing policies have forced the bigger players to re-assess their strategies, a factor compounded by Oracle releasing a free-to-developers version of its product.

When it comes down to features, Microsoft claims to be more than adequately prepared with everything from native XML support, to a soon-to-be-released 64-bit version of SQL Server, to a localised version with support for more than 20 different languages. But it is the ease of administration and interoperability that must be Microsoft`s killer weapon. In a world largely dominated by the Microsoft operating system, interoperability is a given and the fact that most businesses run a range of Microsoft products makes SQL Server a compelling option for many.

We could take on 99.9% of the market with our latest offering.

Bren Newman, program manager, Microsoft`s SQL Server Development Organisation

However, this reliance on the Windows platform could well be the weak spot in the Microsoft strategy as both its senior competitors make it a principle to port their offerings to as wide a range of platforms as possible.

"It is like Linux," says Deon Roos, product manager of server technologies, Oracle SA. "A few years ago Microsoft did not think Linux was a threat. Today Linux could well be its biggest competitor."

This cautionary note is echoed by Simon Jeggo, DMS Pillar manager, IBM South Africa, who says it is important for IBM to support all major operating platforms.

IBM`s primary database is DB2. Traditionally at the high end of the market, the product is by no means limited to this market sector, says Jeggo. He explains that unlike Oracle`s pricing levels that dictate it exists in the high-end of the market, IBM is equally at home among the medium and smaller businesses that constitute a growing portion of the market. "DB2`s pricing clearly places it in this market," says Jeggo, referring to the medium-sized business sector.

It is a sector of the market that Oracle`s Roos sees as crucial to future development for his company. "Oracle would like to focus on small and medium enterprises," he notes, adding that Oracle has already won a significant portion of the high-end market. "As we move down the market there are obvious growth opportunities."

Informix is not dead and we will continue to develop the product.

Simon Jeggo, DMS Pillar manager, IBM

Significantly, it is in this lucrative middle market where the market leaders will have to confront the Microsoft challenge at its fiercest. While neither Roos nor Jeggo see Microsoft as a true competitor in the enterprise sector, both agree that in the medium and small business sector Microsoft could well pose a threat. If Microsoft doesn`t snap up most of this market, it will be because of its reliance on the Windows operating system and its image as a security risk.

These factors, together with doubts over Microsoft`s scalability and availability, make the company a non-starter in the high-end market. The result is that the enterprise sector is a two-horse race: Oracle head-to-head with IBM. Oracle has the upper hand at the moment, but as the price war initiated by Microsoft intensifies, its market share could well begin to dip.

It is a factor that IBM could well be banking on and a battle that Jeggo is confident the company will win. "IBM is well priced and look at what you`re getting," he notes, alluding to the current downturn in IT confidence. It is a card that IBM plays a lot, building on its long history as a regular at the forefront of technology and the confidence that it inspires in customers.

The newest addition to its database family could equally prove to be its weakness or saviour. The fact that the Informix database overlaps significantly with the company`s DB2 offering could prove to be a significant hurdle to overcome.

Jeggo says "Informix is not dead," and that IBM will continue to develop it, although there is a very clear intention to migrate portions of the technology across to DB2. He explains that it is possible three separate streams will develop out of the acquisition with a new Informix and DB2 product emerging from the company.

In the end, the level of uncertainty around the Informix product has already clearly affected its users and Informix looks to be an early casualty of the latest database wars with IBM having to bear the brunt.

Oracle comes to the battle prepared with a full arsenal and a leader intent on humbling Microsoft, a fact that could prove to be in IBM`s favour. Oracle`s strengths lie, not unlike IBM, in its support for as wide a range of operating systems as possible, as well as its strong technology.

If you just want to store your data then contact one of our competitors. If you want an information solution, go with Oracle.

Deon Roos, product manager, server technologies, Oracle

Availability is key in this war, says Roos. It is a capability Roos is obviously proud of as he talks of features such as Dataguard and Flashback Query, but he also agrees that this is about a lot more than just data.

"If you just want to store your data then contact one of our competitors. If you want an information solution, go with Oracle," he says. Clearly this kind of mindset is making some headway, even in the largely Microsoft-dominated middle market where Oracle holds onto a close second to the giant in the NT-based database market.

Oracle`s weak spot is its undeniably higher pricing, a front on which both IBM and Microsoft have a clear lead. As Oracle attempts to establish itself further down the market, this could become an increasingly difficult hurdle to overcome.

The battle is a long way from its conclusion but already there have been many casualties and more can be expected over time. It is anyone`s guess as to who will eventually win the war.

Microsoft is not yet positioned to take the lead, but as everyone is aware, it is a company that tends to get what it wants, which makes it a worthy opponent. Oracle has the more dynamic leader and a set of tools that make it formidable. But is it formidable enough to take on the 'establishment` might of Big Blue? Only time will tell.