Shaken and Stirred

SQL Server might not be the top database in terms of new license revenue, but neither is Oracle. According to Gartner Dataquest, a shake-up in the database market has yielded a new database champ: IBM. IBM's acquisition of Informix boosted Big Blue into the No. 1 spot for 2001 with a 34.6 percent share of the worldwide database management system (DBMS) market. This represents a 4.3 percent growth in IBM's share from 2000. Oracle, besieged with bug reports on its not-so-unbreakable Oracle 9i, drops to the No. 2 position with a 32 percent market share, a decrease of 4.9 percent. SQL Server remains in third position with a market share of 16.3 percent. And Sybase follows at a distant 2.6 percent. (You can read Gartner's database market report at http://www4.gartner.com/DisplayDocument?doc_cd=106576.)

SQL Server's 16.3 percent of the database market might seem slim in comparison to IBM and Oracle's figures, but SQL Server represents the brightest spot in the database industry. SQL Server recorded the largest increase in revenue from new licenses, gaining 17.8 percent. This growth rate is more than triple IBM's—and Microsoft didn't have the automatic market share increase that IBM realized by buying another big database company.

Industry watchers expect SQL Server to stay on this roll for a couple of reasons. First, a high percentage of IBM and Oracle's revenue comes from long-established markets: IBM in the mainframe arena and Oracle in the UNIX market. However, both of these markets are either flat or declining. Growth opportunities for IBM and Oracle lie in either trying to boost revenue from existing customers through price increases or trying to muscle into the growing Windows and Linux markets.

The Linux market generates precious little revenue, with the main database competition being the free mySQL database. And both companies already have products in this space. In contrast, the Windows database market is exploding with an overall market growth of 11 percent—much higher than the 1.4 percent growth in the overall database market. On Windows, the market positions of the big three DBMSs are reversed. SQL Server is No. 1 with a 39.9 percent share and a 25.3 percent growth margin over the previous year. Oracle is No. 2 with 34 percent market share (a 1 percent decline), and IBM comes in at No. 3 with a 20.7 percent market share (a healthy 15 percent growth).

Microsoft has been the leading database innovator since SQL Server 7.0, which featured integrated OLAP Services. And in SQL Server 2000 Analysis Services, Microsoft continued to push the bounds of what a database can do by adding data-mining capabilities. In addition, SQL Server is by far the most cost-effective database solution available. Notwithstanding SQL Server 2000's price increases, SQL Server's initial purchase price is much less than competitors', and its ease-of-use and self-tuning features make SQL Server less expensive by far to operate over time. Function and price will continue to provide a powerful one-two punch to keep SQL Server atop the standings as the fastest growing database in the fastest growing market segment.