Database vendors eye open-source effect

As Oracle, IBM and Microsoft ready the next competitive round, open-source alternatives start to make their mark.

In what's become almost a yearly ritual, the big three database suppliers--Oracle, IBM and Microsoft--are prepping major product releases meant to steal away one another's customers.

But unlike previous competitive cycles, this time around the entrenched suppliers are eyeing the threat posed by a growing number of open-source alternatives, particularly on the low end.

Market leader Oracle fired its latest salvo on Monday when it released Oracle 10g release 2, an upgrade to its "grid" database that adds better security and management.


What's new:
Oracle, IBM and Microsoft are releasing major upgrades of their databases with advanced features, as a handful of open-source companies try to enter the low end of the market.

Bottom line:
The entrenched database vendors are focusing on automation, simplicity and management features to stave off competition from upstart open-source companies.

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IBM's response is code-named Viper, the next major edition of its DB2 database, due in the second half of next year.

The company intends to begin an "open beta" program in August or September for Viper, which is now being tested with a small number of customers, according to an IBM representative.

Meanwhile, Microsoft will make its delayed SQL Server 2005 database generally available on Nov. 7.

Combined, Oracle, IBM and Microsoft last year garnered more than three-quarters of the dollars spent on corporate databases, according to market researcher IDC.

But despite the big three's commanding presence, several upstart database companies are making a go at the relational database industry, counting on open-source products and business models to lure away customers.

Open-source database company MySQL reports that its revenue doubled last year, to about $25 million. Meanwhile, since the beginning of this year three companies--

Locked up?
The entrenched players are not suffering massive revenue loss to these open-source start-ups. Oracle, in fact, highlighted database and database add-on sales in its strong fourth-quarter earnings report last month.

But the effects of open-source pricing and products are already being felt, according to Noel Yuhanna, an analyst at Forrester Research.

"The pressure is on and is starting to build up," Yuhanna said. Established database vendors "will be lowering prices in large deals, probably offering more discounts just from the pressure of open source."

Typically, open-source companies charge corporate customers for

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