ARC Databases: Capacity-Based Pricing Stirs Up Market

players, with the other vendors struggling to move beyond niche status. At least that's the view of one leading industry observer.

Mark Shainman, an industry analyst with Stamford, Conn.-based research firm Meta Group, believes the product category is currently dominated by three vendors: IBM, Microsoft and Oracle. In fact, between them, Microsoft's SQL Server and Oracle's 8i have grabbed roughly 65 percent of the DBMS market, Shainman says. IBM, on the other hand, is coming on strong.

The database software results in this year's Annual Report Card,in which IBM finished first and Microsoft second,parallel Shainman's view to some degree. However, Oracle finished far back in fifth place, crippled by very low scores in the partnership areas of the survey.

Shainman believes that the changing pricing formula embraced by the leading vendors is helping provide IBM's DB2 with a major advantage. "With the release of IBM's DB2 V. 7.1 and Microsoft's SQL Server 2000, all three major DBMS vendors have embraced capacity-based pricing models," he explains. "IBM and Microsoft use a CPU-based model, while Oracle uses a power unit [PU] model. Under capacity-based pricing, DB2 and SQL Server are emerging as the low-cost options; under the PU pricing model, Oracle is three to five times the price of DB2." However, DB2 is not without flaws. "In a lot of verticals, ISV support is still an Achilles' heel of DB2. Microsoft and Oracle have better ISV support," Shainman says.

As for future technology trends, Shainman sees greater scalability on the NT platform and high availability in clustering.