Oracle Remains Top Database Seller in 2004

Oracle defended its title as the top database software maker in 2004, a year that saw the market grow 11.6 percent to $14.9 billion as businesses filled out unmet database management needs.

The order for the top five database providers stayed the same from 2003 with the vendors growing their businesses in varying degrees, according to preliminary estimates from Framingham, Mass., research firm IDC.

Oracle held 41.3 percent of the worldwide market in 2004, followed by
followed by IBM and Microsoft with 30.6 percent and 13.4 percent,
respectively. Sybase and NCR Teradata filled out the top 5 with 3.1 percent of the market each.

IDC analyst Carl Olofson said in an interview that Microsoft grew 22 percent from 2003 to 2004 based on strong SQL Server
sales in the small and medium-sized business market.

Oracle grew 14.5 percent on strong sales of its Database 10g, as well as new
packaging and pricing to meet the needs of the small and medium businesses
and departmental users. IBM grew a modest 8 percent.

“For Oracle and Microsoft, you’re seeing customers responding to pent up
demand,” Olofson said. “There had been a lot of belt tightening and
customers had been putting off projects such as expansion of database

Olofson said that while the numbers are encouraging and seem to reflect a
“robust recovery,” the figures aren’t as high when currency exchange rates
and downward pricing pressures are taken into consideration.

“The growth that you see is probably, in constant currency terms, not as
robust as it appears in U.S. dollars,” Olofson said. “There’s a lot of
business now that’s being done overseas, in Western Europe and Asia-Pacific
and the U.S. dollar lost value against currencies in both regions.”

If that issue rings a bell from trends analyzed by IDC last year, which was
considered a recovery year after the belt tightening of 2001 and 2002, it’s
because Olofson said the lack of clarity continues with regard to how
overseas business affects U.S. estimates.

The analyst recalled that last year, growth was sluggish, working out to be
flat or slightly negative. This year, growth appears robust but takes on a
more modest look when one factors in the currency exchange.

IDC expects 2005 to be marked by continuing competition among Oracle and IBM
in the middle market while Microsoft prepares for the release of SQL Server
2005, due this

While the three vendors will all continue to compete fiercely, they will
also be forced to reckon with open source database offerings from MySQL AB,
the PostgreSQL community or Computer Associates’s Ingres software. This is
particularly true for Microsoft, whose SQL Server plays best in smaller
parts of the market, such as SMBs and departments.

“Microsoft has a natural advantage because they roll SQL Server out in
concert with the operating environment and there’s all kinds of support for
developing applications in Visual Studio, so companies like MySQL have to
have competing approaches that make it as easy to deploy their databases as
SQL Server.”

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