Oracle Gets Ready to Rumble

Apparently not one to take slights easily, Oracle Corp.
is now throwing counterpunches, saying its recent troubles in California and
in its slipping ranking in the database market are both a result of

Yesterday, Gartner Dataquest released its annual survey of the database software
, which showed IBM overtaking Oracle for the top
spot, with a 34.6 percent market share to Oracle’s 31.1 percent. While both
IBM and Microsoft showed gains, Oracle’s market share
slipped across the board.

Instead of downplaying the significance of the survey, Oracle has gotten up
swinging. First, it issued a pre-emptive strike with a survey of its own,
showing it maintained a sizeable lead amongst Fortune 100 companies. An
Oracle spokesperson said the study, which was commissioned by Oracle, was
done to “clear up misconceptions.” It differed from the Gartner study by
using operational use as a measuring stick, not revenue.

Now, Oracle is continuing the fight, challenging the numbers provided by IBM
and Microsoft and the study’s methodology, as well as claiming it still
leads the “modern database market.”

“In this time when financial reporting is under scrutiny, it is sadly ironic
that the revenue and growth data provided to the industry analysts by the
vendors themselves is not independently validated, outside of Oracle’s,”
Chief Financial Officer Jeff Henley said in a statement. “Until our major
competitors, IBM and Microsoft, provide audited database financial numbers,
the data that makes up these analyst reports is suspect.”

In their filings with the Securities and Exchange Commission (SEC), IBM and
Microsoft do not break out their software sales data to include line items
for database sales.

Officials from IBM and Microsoft painted Oracle’s reaction as a sign of desperation.

“This is an example of Oracle reacting to IBM’s momentum,” said IBM spokeswoman Lori Bosio. “Our DB2 database is growing faster than Oracle’s and the industry average.”

“We’re excited by our growth numbers,” said Sheryl Tullis, a product manager with Microsoft’s SQL server. “It really validates with what we’ve been seeing with new customers coming over from Oracle.”

Gartner Dataquest analyst Colleen Graham, who worked on the study, called
into question the timing of Oracle’s complaints. “Last year, they had no
problems with our methodology,” she said. “Suddenly, this year, when they’re
not number one, they’re calling our methodology into question.”

Bosio and Tullis both said their companies followed SEC guidelines for reporting revenue. Tullis added, “Oracle might not like it, but the SEC does and so do our shareholders.”

Graham said Gartner analysts do not rely simply on SEC filings
to divine market numbers, but conduct interviews with hundreds of companies
to gather a snapshot of the market. “We really do have a good idea of who’s
buying what,” she said.

Oracle also questioned the emphasis placed on overall market share, since it
includes legacy systems. Instead, Oracle points to its wide lead in the
relational database management system (RDMS) segment, where it had a 39.8
percent market share. IBM was second with 34.1 percent.

Graham readily conceded Oracle does have a point, since the database market
is huge and diverse, with many software products that don’t compete against
each other. Oracle has maintained its lead in the RDMS segment, despite some
slipping that Graham attributes to the weak economy and Oracle’s now-defunct
dot-com customers.

Similarly, Oracle has gone toe-to-toe with its detractors in the Golden

California legislators and state investigators have pummeled Oracle for its
$95 million contract with the state — a contract the state auditor says
provided software few state agencies need. Oracle answered the bell
yesterday, releasing an exhaustive list of the state agencies and
municipalities using Oracle software – everything from the Department of
Fish and Game to the Ontario-Montclair School District – and defending the
contract as a boon to the state.

“Oracle continues to believe that the contract delivers great value to the
state and local governments in California,” Henley said in a statement. Even
so, Oracle has offered to scrap the contract.

Like in the database-market rankings dispute, Oracle released its own report
to buttress its case. According to the study by former California state
auditor Kurt Sjoberg, the contract might save the state as much as $163
million over ten years.

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