Oracle continues to dominate the database software market, but challenges lie ahead from open source, analysts say.
Research firms IDC and Gartner both predicted continued growth in worldwide sales of relational database management systems, or RDBMS, software, which enables data to be stored, manipulated and retrieved. They also said that companies' need for data warehousing will remain a main source of increases in that market.
Gartner and IDC made their assessments in reports released this week on global sales of RDBMS software in 2005.
The biggest threat to Oracle's dominance of the market could be open source competitors like MySQL, analysts said. Acceptance of open source software could change the way pricing and licensing is determined for RDBMS products, upsetting the status quo.
"These open source (database management system) products continue to improve in terms of functionality and scalability, and DBMS tool vendors are beginning to provide support for these offerings," Colleen Graham, a Gartner principal analyst, said in a statement.
But Oracle maintains the open source challenge is not a problem.
"IDC did not call out the open source vendor numbers specifically, and Gartner rated all of them together as coming in at less than 1 percent of the market. So it's not a significant amount overall. I don't think they even rate a mention," said Willie Hardie, vice president of database product marketing for Oracle.
A Gartner analyst disagreed, pointing out that even though open source software sellers like MySQL and Ingres did only made up less than 1 percent of the database systems software market in 2005, they showed a strong 47 percent growth.
"We think it is a big deal. Granted, in the DBS market right now, they are very small player. Remember about 10 years ago, Linux in the market was very small player? Not so much, anymore," Gartner's Graham said.
Gartner reported that Linux, driven mainly by Oracle, was the fastest-growing operating system platform for RDBMS. It rose 84 percent, out-performing Unix.
Driving the open source adoption is its popularity among younger developers, IDC said. Gartner accounted for it as a maturation of the open source model, rather than a generational issue. Both see it as spurring change in the market.
"Open source in general starts small, but then it ends up having a big impact. Oracle knows this. They happened to acquire an open source vendor themselves, because thy want to get on that train," Graham said, referring to the business software maker's acquisition of Sleepycat Software.
"We expect them (open source database software sellers) to gain market share, and probably pretty quickly," she added.
Database management sales in 2005
The RDBMS software market grew 9.4 percent last year to a $14.6bn (£8bn) global market, according to IDC.
While developing markets are contributing to this growth, the lower pricing in those regions does not yet make them lucrative enough to affect the overall market, the research firm said in its report. The majority of growth is seen in established markets like the US and the Europe, Middle East and Africa region.
Oracle remains the market leader with $6.5bn and 44.6 percent global market share in 2005, IDC said. IBM retains its second place at 21.4 percent. Microsoft is close behind with a 16.8 percent share, which IDC believes will keep rising as a result of the SQL Server 2005 release.
Gartner put total 2005 sales at $13.8bn, an 8.3 percent rise in revenue from the previous year. It also gave Oracle a strong lead at 48.9 percent market share worldwide, with IBM and Microsoft trailing at second and third.
Oracle has attributed much of its 2005 success to the high demand for data availability and warehousing, and to the adoption by businesses of its 10g database software, which can run clusters, groups of multiple servers. Oracle refers to this option as Real Application Cluster, or RAC, technology.
"With clusters, you can take the Oracle database application data, the warehousing application and run that on a cluster of servers that share the same database. You can make use of all the servers and processing parts of the servers in the cluster. You are eliminating the server as a single point of failure," Hardie said.
While clusters are an innovative option, Graham said that the switch also happens to benefit Oracle's business plan.
"Every time they (Oracle) sell RAC, they get more than they would for a regular Oracle system. So for businesses, there is cost savings on the hardware, but Oracle is also getting a little bump," Graham said.
But prices may change. IDC predicted that Oracle and IBM will try to combat Microsoft's growing success in the market by competitively pricing their packages for developers and small businesses. IDC sees Microsoft's success possibly eating into Oracle's top dog position, as Microsoft saw the "strongest year-over-year" growth by percentage, based on its analysis.
"As the software landscape continues to transform, we anticipate that software licensing will continue to transform along with it," Oracle said in a statement, noting that new developments such as grid computing and multicore chips require shifts in licensing.
