Databases: Now It's War

Welcome Guest. | Log In| Register | Membership Benefits

September 22, 1997

Databases: Now It's War

More products, more competition, and a slowing market mean a struggle for database vendors. But it's good news for users.
By John Foley
BM and Sybase introduced major upgrades to their database-management systems last week-just as Oracle and Microsoft showed surprising vulnerability in the database market. That, along with upcoming products from Informix and Computer Associates, point to increased competition in databases, just as the market shows signs of softening.
Janet Perna caption What does that mean for users? More options, say analysts.
Charles Phillips, a software analyst with Morgan Stanley & Co. in New York, says database vendors are looking for ways to differentiate their products, resulting in more choices for users. He also expects the cost of database licenses to continue its gradual decline. New applications and more users should drive sales growth of 15% to 20% across the database industry this year, Phillips predicts.
Certainly, the competition is heating up. IBM is jumping with both feet into the client-server database market with DB2 Universal Database. The release, which begins shipping this week, combines the cross-platform support of DB2 Common Server (it runs on Unix, Windows NT, and OS/2) and the parallel-processing capabilities of DB2 Parallel Edition. "We think we have a better shot now" at client-server deployments, says Janet Perna, general manager of data management with IBM Software Solutions.
Indeed, Perna refers to IBM only half-jokingly as "the Anti-O racle." But IBM is backing that contention with serious action: a migration plan aimed at Oracle's customer base. A similar offer last spring to Informix and Sybase customers resulted in 60 companies contacting IBM, Perna claims. "We're in various stages of bringing them on," she adds.
Some examples: Fingerhut Cos. in Minnetonka, Minn., is moving a data warehouse application from Oracle to DB2; Sapient Health Network, a provider of medical information in Portland, Ore., dumped an Informix Illustra database in favor of DB2; and athletic-wear maker Russell Corp. in Alexander City, Ala., switched from Microsoft SQL Server to DB2.
Los Alamos National Laboratory in New Mexico is replacing a Sybase database that runs on Sun Microsystems servers with DB2 Universal Database on IBM's RS/6000-based SP parallel server. "We looked at the different [database] offerings and decided DB2 Universal Database was the best fit for us," says Joe Zowin, a database administrator with the lab. "Coming from IBM, and running on the SP, it had a lot to recommend it."
IBM is also going after New York financial firms, a Sybase stronghold. Perna says IBM's database sales force on Wall Street has grown to more than 50 people, up from 10 at the beginning of the year. "IBM is now much stronger than it was when Sybase entered the database market," she adds.
IBM is eyeing other markets as well. Perna says business intelligence applications and electronic commerce represent the biggest opportunities.
According to market research firm Dataquest Inc., IBM was second only to Oracle in the $5.7 billion database market last year. IBM's 26% share, however, was largely gained through database sales on mainframes and AS/400s. Dataquest analyst Carolyn DiCenzo says IBM trailed Oracle, Informix, and Sybase on Unix, and trailed Microsoft, Oracle, and Sybase on Windows NT. "DB2 Universal Database will make IBM a much stronger contender," says DiCenzo.
Still, not everyone is looking to switch. ARM Financial Group Inc. in Louisville, Ky., runs its business on Sybase and plans to stick with the software developer after testing its Adaptive Server Enterprise 11.5. "You really have to have a strong reason to dump something that works," says Peter Herbener, director of applied research.
Sybase is positioning Adaptive Server Enterprise 11.5, the successor to Sybase SQL Server 11, as an ideal platform for deploying distributed, component-based applications. Within two months, Sybase plans to begin beta testing an upgrade that includes full support for Java objects within the database. In fact, Sybase chairman and CEO Mitchell Kertzman says the company plans to submit its Java database implementation as an industry standard.
Kertzman says the new products should erase any notion that databases are becoming indistinguishable commodities. "The generally accepted wisdom has been that it would be harder to differentiate between databases," he notes. "I would argue that it's been a long time since relational databases are as different as the y are now."
On the same day that IBM and Sybase announced the pending availability of their new systems, Oracle revealed that its database business grew a mere 6% in its most recent quarter-well below the 41% growth of the same period a year earlier. Analysts took the news as a sign of weakness in Oracle's core business; three brokerage firms responded by downgrading Oracle's stock.
Unsustainable Growth
In response, Oracle officials say it would have been difficult to duplicate the "barn-burner" growth of the same quarter a year ago. They also point to a general slowdown in database sales across the industry.
Oracle will make a series of announcements this week at its Oracle OpenWorld conference in Los Angeles. On tap are a data mart suite for sales and marketing departments, two-node failover software for Windows NT 4.0/Enterprise, and the beta release of Personal Oracle Lite, version 3.0, a small-memory database for mobile users. Oracle also plans to announce new change-management a nd capacity-planning tools for Oracle7 and Oracle8.
Sybase's Kertzman agrees with Oracle on one point: He says there's a general slowdown in database sales across the industry. Kertzman attributes the phenomenon to millennium projects sapping resources from other IT projects. "The best estimate I can get from CIOs is that year 2000 projects may be taking 20% of IT budgets," he says. "That may represent all the growth there is."
Microsoft, meanwhile, confirmed suspicions that an enterprise edition of its high-end database, SQL Server 6.5, has fallen behind schedule. The Enterprise database was supposed to be part of Microsoft's Windows NT 4.0 Enterprise edition announcement last week (see story " Microsoft Set To Deliver On Enterprise Strategy "), but company officials say SQL Server 6.5/ Enterprise is still in beta test. Both products were due by the end of this month. A subsequent release, SQL Server 7.0, may also be slipping.
Observers say these developments are proof th at the dynamics of the database market are changing. "Microsoft is less of a competitive threat in this area than people would have thought six months ago, while IBM is a greater threat," says Morgan Stanley's Phillips. "Microsoft is finding database technology more difficult than it thought."
Microsoft may not be the only one. Informix, which reported losses of $260 million in the first half of this year, hopes to keep its head above water with some new packaging deals. Last week, Virage Inc. in San Mateo, Calif., announced a media management system that runs on Informix Universal Server. Informix and Hewlett-Packard are expected to announce this week that HP will ship Informix's Universal Server with its Domain XE Web server.
Next month, Computer Associates is slated to deliver Jasmine, an object-oriented database for emerging multimedia applications. CA demonstrated Jasmine, originally due last year, at last week's IT Forum conference in New York. "The competitive landscape that most people look at is through the rear window," says Yogesh Gupta, CA's senior VP of product strategy. "That's not the growth market of the future. CA's going to legitimize the need for a new solution for [multimedia] applications."
Each of the database companies seems to think its new products will help it outflank the competition in a battle that Gartner Group Inc. analyst Betsy Burton says is increasing in intensity, adding, "It's going to be a hot and serious war."

Back to News in Review
Send Us Your Feedback
Top of the Page