Database MarketAmy Miller, Elaina Reinhard, and Shannon WengerBA 471 Dr. Rene ReitsmaMay 23, 20061AbstractA database is an organized collection of data in a computer. The computer uses the database to access information in a systematic way. As technology becomes evermore present and important in everyday business, databases are evolving into highly competitive products. Major players in the database market need to examine their market position, assess current competing players and up-and-coming competition.The three major players who have dominated the database market for the past 30 years are: Oracle, IBM, and Microsoft. Together in 2005, Oracle and IBM captured over 71% of the world-wide database market. Microsoft has found a niche supplying a smaller, less powerful database. To remain competitive, Oracle and IBM must reconsider their prices.There are four major properties that a database must have to be a player in the market: scalability, speed, backup and recovery, and security. Database administrators help organizationsmake decisions regarding these properties, and guide database users toward success.Microsoft’s database product Access is a less expensive option than Oracle or IBM, but the sacrifices are substantial. Small scale organizations can benefit from using Access, but they will be giving up speed, security, and scalability.Open source systems are becoming more prevalent in the database industry. PostgreSQL and MySQL appeal because they are free. Companies are able to save money and still remain competitive with Oracle and IBM users. Conclusively, traditional database systems haven’t changed in years. Open source systems are putting pressure on Oracle, IBM, and Microsoft to provide their products at a more affordable price. 2Database MarketTo paint a broad picture, a database is an organized collection of data in a computer. A database functions to collect data and records it in a systematic way that assists the computer address questions. According to Wikipedia, the term ‘data base’ was first used in 1963, and the first database management system was developed in the mid 1960’s. Different database models were introduced in the 1970’s and the first commercial products appeared in the 1980’s. Databases continued to evolve through the 1990’s, handling more complex data. As 2010 approaches, the database market needs to be examined; major players and incoming competition alike should assess their standings, and remain at the cutting edge if they want to secure success in the market (U.S. Department of Labor, 2005).Major PlayersCurrently, we do not see any significant growth or innovation within the database market.As a result, the market has reached a state of equilibrium. This is understandable because database technology has been in existence for approximately 30 years. Over these 30 years, database technology has been dominated by three major players Oracle, IBM, and Microsoft. Oracle, IBM, and Microsoft have changing amounts of market shares. According to a study conducted in 2005 by an independent research firm, IDC, Oracle captured 41.3% of the world-wide market. IBM ranked second at 30.6% and Microsoft had a much smaller portion, only 13.4% (Baumbauer, 2005). Results are displayed in Table 1. 3Oracle is among the world’s largest enterprise software companies. In 2004 annual revenues totaled 9.5 billion (Oracle, 2004). Its major database product is called Oracle Database 10g. This product consists of a very large portion of Oracle’s product portfolio. Being an industry leader, Oracle’s product is well known for its’ performance and ability to meet the industry strength requirements of any sized business. Pricing for Oracle database 10g is at a premium. Based on accommodating 32 CPU’s, a company can expect to pay approximately 1.28million dollars (Microsoft, 2004). Oracle’s most direct competition comes from IBM, whose major database product is called DB2. Pricing for this product is comparable to Oracle’s, plus or minus additional management tools and features. Based on an article published in 2002, a DB2 system supporting32 CPU’s would cost approximately $1.04 million (Darrow, 2002). Being relatively new to the database market, Microsoft has recently introduced their database product, the Microsoft SQL Server. This database is not as powerful as Oracle’s 10g or IBM’s DB2, but it meets the industry needs of many smaller and midsize companies. The SQL 4Oracle 41.3%IBM30.6%Microsoft 13.4%Figure 1Server’s biggest competitive advantage is price. Pricing for this system accommodating 32 CPU’s runs about $640,000, which is half of Oracle’s 10g (Microsoft, 2004). Industry StrengthsThere are four major properties that a database must have to be a major player in the industry: scalability, speed, backup and recovery abilities, and security. Scalability is a database’s ability to handle large amounts of transactions. When you think of scalability, think of databases that Amazon or eBay would need. These are organizations handle millions of transactions each day and consequently, need highly scalable databases. Before considering howto establish scalability, one must first decide if the database is in fact scalable, and if it is scalable, does the database need to be scaled. Generally, if there are more than 8-10 users requiring simultaneous access, the server should be improved. (Kerwin, 2006)There are 2 ways to achieve scalability, which are to scale up or scale out. Scaling up is an easier option. Generally an organization scales up its budget, investing money into the server,and the problem disappears. The money adds processors to handle the volume load of a single, high performance server. There are times when the level of volume can’t be satisfied by one server, and in that case an organization would choose to scale out. The alternative to scaling up, scaling out is when the user volume is spread out among many low cost servers. Speed is the second property that makes a database strong. Speed is the ability to handle and high amount of transactions per unit of time. There are different aspects of speed, and they all influence a databases handling ability. The product or system itself is an important facet of speed. Speed is contingent on the quality of the server itself, and will vary between databases like Access and Oracle. Speed also depends on database design
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