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Database sales show some life

Relational-database market grew in 2004, IDC says. Top three providers keep their spots, but one's share grows more than the others.

The results are in, and it appears that corporate customers are spending more money on back-end business software.

Preliminary results from IDC's annual survey of relational-database market share indicate that spending went up 11.6 percent to $14.9 billion in 2004. Those numbers, however, were inflated by the low value of the U.S. dollar compared with other currencies.

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"There is no question that the overall trend is favorable," IDC analyst Carl Olofson said in a statement. "However, if one takes into account the weakening of the U.S. dollar over the past year, the picture changes to less-dramatic growth rates."

Relational databases serve as an anchor to the majority of business applications, storing information and performing transactions. The market is dominated by Oracle, IBM and Microsoft, which collectively garner more than two-thirds of the money spent on relational-database licenses and services, according to market researchers.

The relative market positions of the big three database providers remains unchanged compared with 2003, IDC said, with Oracle grabbing the top spot again.

According to IDC's preliminary numbers, Oracle pulled in 41.3 percent of relational-database spending, up slightly from the year before. IBM came in at 30.6 percent, down a fraction compared with 2003 IDC numbers. And Microsoft's share grew to 13.4 percent, which represents a growth rate of almost 11 percent.

Sybase, which grew slower than the rest of the market, and NCR, which builds a specialized database for data analysis systems, both had 3.1 percent market share.

Last year was the second year in a row that spending on database licenses and services went up. The overall market size declined by about 2 percent from 2001 to 2002, according to IDC.

Olofson said that in the coming year, competition for medium-size businesses--an area where Microsoft already has many customers--will be most fierce. Also, IDC said that all database vendors will need to react to "potential threats" from open-source database companies.