IDC Sees Oracle's Relational Database Lead Slipping

Oracle IBM Microsoft

Last year, Oracle saw its lead dwindle 4.4 percent, as measured by revenue derived from new license sales and maintenance, compared with 29.8 percent growth by IBM and 28.5 percent growth by Microsoft, according to IDC.

The impressive IBM number, however, includes that company's $1 billion acquisition of Informix last year, said Carl Olofson, research director at IDC. "Remember, 17 percent of that is probably as a consequence of Informix," he said.

Earlier this year, Gartner figures showed Oracle slipping as well, but Gartner numbers included only new license sales.

Oracle disputes these figures, just as it contested Gartner's report. Oracle's main business is in databases, for which it provides audited sales figures. Microsoft and IBM, which both offer a wide array of software, do not provide database audited sales figures, said Rene Bonvanie, vice president of Oracle9i marketing.

"It's pretty clear that IBM is buying market share, and it's also clear that Informix revenue is declining; it has an eroding customer base and Informix customers are more likely to move to Oracle than to IBM," Bonvanie said.

The total relational and object-relational database market was worth $12.7 billion in 2001 and is expected to soar to $20 billion by 2006, according to IDC.

Oracle leads the relational database market and has for some time, but has seen that position under fire from both Microsoft SQL Server and IBM DB2, observers said. Unlike Gartner numbers published earlier this year, IDC factors maintenance prices into its revenue figure.

"This is a total software number, a combination of license and maintenance costs. To be clear, maintenance is what's covered in standard maintenance contracts, where the price is tied to license fees usually over a period of time and entitles the customer to bug fixes and version upgrades for the life of the license, as well as some level of basic technical support," IDC's Olofson noted.

Oracle, for example, charges 22 percent of its license price for maintenance. Microsoft maintenance fees range widely depending on type of licensing deal, but are probably in the low double digits, and less than 20 percent, said Microsoft SQL Server Product Manager Sheryl Tullis. IBM maintenance ranges from 18 percent to 20 percent of software license cost, a spokeswoman said.

IBM has seen its $1 billion Informix deal pay off, at least in the short term. "We continue to grow faster than the market and the competition. We're closing the gap," said the IBM spokeswoman.

Database rivals say Informix could hurt IBM longer term, however. "They continue to be challenged by different code bases and platforms," said Microsoft's Tullis. Oracle has said repeatedly that IBM will be hampered as it tries to support and maintain in excess of 10 databases after the Informix acquisition.