Database Market Share: The Rich get Richer

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Database Market Share: The Rich get Richer

IDC has released Worldwide RDBMS 2006 Vendor Shares: Preliminary Results for the Top 5 Vendors. I’ve provided my thoughts below:

The key takeaways:

  • The database market is still expanding at double digit gains, 14.3% from 2005-2006. Despite a lot of people’s feelings that this is a mature market there continues to be a healthy environment.
  • The top three vendors remain the same from last year (and from the last several years). They are: Oracle 44.4%, IBM 21.2% and Microsoft 18.6%.
  • The top three vendors control almost three-quarters of the market.
  • Oracle is still beating the industry growth average despite everyone trying to displace them.
  • BM’s growth rate is lagging behind the average and is most likely selling into companies who are using their hardware
  • Microsoft, with a growth rate of 25%, is the only database vendor that is handily beating the average growth rate. My belief is that it is increasing its market share by expanding the overall database market rather than primarily taking accounts away from other vendors. (see Microsoft Excel: The King of BI)

Microsoft made the most gains continuing their long-term strategy of moving up market, i.e. from small scale implementations to being able to support truly enterprise class solutions. Microsoft was not even considered a viable contender when they initially provided their database software via an agreement with Sybase but they have proven to be adept at gradually expanding their capacities. (Gradually is the operative word, though, with such a long time span between SQL Server 2000 and SQL Server 2005.)

Full disclosure: I worked in Digital Equipment Corporation’s (DEC) database group in the early 1990s and left just before that group was acquired by Oracle (although the deal was know for a while before I left.) A significant portion of the group went to Oracle and many are still there today helping expanding its functionality. Others were recruited by Microsoft and have made significant contributions to SQL Server’s expansion.

Sybase and Teradata round out the top 5 by market share. Although Teradata gets a lot of publicity (they are being spun-off by NCR this year), they have just 3% market share. They are in the high-end of the database market and have some very high profile customers. Sybase is almost invisible in relation to other competitors but they are in fourth place ahead of Teradata with 3.5% market share. There are still a lot of companies that implemented Sybase years ago and have no reason to switch to another database, i.e. if it works do not fix it. In addition, Sybase has made a commitment to mobile computing, which has opened markets to them.

Predictions:

  • The top three vendors will keep holding the top positions for years to come, however, look for Microsoft to continually increase its share primarily by expanding the market. They are expanding the use of databases into the SMB (small to medium size business) market. Their successful bundling approach, started with Microsoft Office so many years ago, has a lot of acceptance in the SMB market. Plus, maybe Oracle and DB2 have grown so sophisticated over the years, that they are harder to learn by SMB DBAs. They may offer more functionality but the cost is a larger learning curve and more complexity.
  • An assumption is that companies will not switch from the database vendors they have implemented unless the software is no longer supported.  If you have standardized on one of the major database vendors it probably does not provide any business ROI to switch. You might make some grumblings to your vendor of choice to keep pricing honest but what do you really gain to justify the conversion costs and getting your staff trained in a new database?
  • Open source databases will gain more usage and further expand the overall database marketplace (just as Microsoft is), however, the rate of adoption may not be significant for a while.


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