Database dichotomy

By Martin LaMonica
Staff Writer, CNET News.com
May 14, 2003, 4:00AM PT

For years, bragging rights in the $12 billion database market have belonged to the company selling the most muscular software capable of running the most demanding systems. Now, brawn alone isn't enough--buyers want software that is smart and cheap, too.

Software from Oracle and IBM--the top two sellers of database system by revenue--has long anchored the coveted high-end systems that are the backbone of big business, such as high-volume credit card transaction and airline reservation systems. And last month, Microsoft--the No. 3 seller of database software--joined that market by releasing its SQL Server database in a high-performance 64-bit version along with a stronger Windows operating system. Microsoft hopes the new software will silence critics of SQL Server, who have said that it wasn't capable of handling the largest tasks.

But just as the leading database makers conquer the technological challenges of complicated jobs, they are getting a deflating new message from customers who have taken such performance for granted: Buyers also want database software that's more reliable, easier to manage and cheaper to maintain.

"We are seeing more and more competition based on cost and manageability because the market is looking for databases that are easier to implement and have a lower cost of ownership," said Ted Friedman, an analyst tracking the database software market for the Gartner research group. "Those are very important battlegrounds."

Making matters even more difficult for database companies, brand loyalty means little in this tight market. That means manufacturers must concentrate on management tools, total cost of ownership and integration with other applications to distance themselves from competitors.

Information Resources, a data analytics company, provides a clear case in point. Chief Information Officer Marshall Gibbs has no preference when it comes to choosing database brands, saying his business will go to "whoever is giving the best bang for the buck in terms of features, performance and price."

Helping to fuel the trend are Intel-based servers that can offer a price advantage over comparable Unix-based hardware. Databases running on Intel-based servers in the past had been shut out of the most demanding applications because Intel servers lagged Unix systems from IBM, Sun Microsystems and Hewlett-Packard in scalability.

Recent advances in the performance of Intel's Itanium and AMD's Opteron processors mean that the majority of business needs can be met with two- and four-processor servers, which are quickly becoming commodities. The lower hardware prices have compelled businesses to look more at PC-based systems as alternatives to "big iron" mainframe systems. That, in turn, has led companies to shop for more efficient databases.

It's the little things
To ride the shifting tide, database makers are working overtime to develop features that they hope will appeal to buyers and distinguish their product from the competition. Yet that could prove an elusive goal. All of the major manufacturers, for example, are emphasizing new features that automatically manage storage and detect problems before they lead to costly outages.

"Top performance is an unsustainable differentiator between the top three database players," Meta Group analyst Mark Shainman said about market leaders Oracle, IBM and Microsoft. "They can basically all do the same thing."

Budget-squeezed businesses are looking for enhancements that allow a single database administrator to manage more databases. The cost of managing databases can be higher than the actual license fees over time.

As a result, the big three database sellers are concentrating on self-managing tools that take some of the burden off of database administration. IBM has been incorporating self-managing features that came out of its research in autonomic computing for use in its DB2 database, allowing a database to spot problems and reconfigure itself. Oracle, Sybase and Microsoft have similar efforts.

Nevertheless, while factors such as ease of management are obviously important, the highest priority among buyers is overall cost of ownership--the total tally for license fees, hardware acquisition, setup, management and maintenance.

In particular, the desire to get the greatest bang for the buck on Intel or AMD hardware is creating fierce competition among database providers on the two most prominent Intel-compliant operating systems: Windows and Linux. All makers run on Windows, while IBM, Oracle, Sybase and other companies have versions of their databases that run on Linux.

The Linux question
In fact, many buyers see Linux as playing an increasingly large role in their future system plans. A poll of Oracle database customers taken in March by the International Oracle User Group found that 43 percent of respondents plan to use Linux for "mission critical" applications in their data center within one year, while 54 percent plan to do so within two years.

Given that Microsoft sells its database only for Windows, the software giant could find itself losing out on some deals. That's been a recurring concern for Microsoft as Linux and open-source software grows in popularity among businesses, especially on servers.

But Microsoft can claim some advantages over competitors, mainly because of dominance in desktop PC software.

Information Resources, for example, bought Microsoft's 64-bit version of SQL Server to process information from thousands of sources and create "data marts"--dedicated data stores where desktop users can query and analyze historical information. The company went with SQL Server because it could handle multiple gigabytes of data in memory and share information with Windows-based desktop applications, such as Excel and PowerPoint.

"Irrespective of how powerful a database server is, at the end of the day it has to be powerful and generally available to everybody," CIO Gibbs said. "And with Microsoft Office's prevalence on the desktop, that's becoming more and more a target of where this business intelligence lands."

Microsoft also benefits by being closely associated with increasingly powerful PC hardware. Because SQL Server has a major presence in medium-size businesses and departments in larger companies, a Microsoft customer is more likely to upgrade hardware and get a more powerful version of SQL Server at the same time, rather than to call in another database provider, Meta's Shainman said.

For this reason, Oracle and IBM are also targeting their databases at PC-based servers. Oracle said it is seeing a surge in customer interest for its Real Application Clusters technology on Linux, which lets businesses string together several Intel servers to handle complex jobs that would usually require a single, more powerful server.

"Oracle's strategy is very smart," Shainman said. "They realize they have to win the hearts and minds of people so that they associate Oracle as the default database on Linux, which is crucial to counter the Microsoft-Intel wave."

IBM, too, is a major supporter of Linux and has ported its entire server software line to the open-source operating system.

The wild card in the database market is the open-source alternative, MySQL, from a Swedish company of the same name. While MySQL handles relatively simple database applications, other open-source projects, such as the ObjectWeb consortium, are pushing advanced database features into the realm of free software. The combination of MySQL and ObjectWeb's clustering software might be good enough for buyers who otherwise would have bought from the big three database makers.

Analysts said it is too soon to call a clear winner, especially when the differences between products are slight. In addition, they say, the battle over industrial-strength databases is not over: Ever-growing data storage and computing needs of businesses continue to push database makers to develop faster and more scalable software.

In the short term, however, buyers are shopping for databases that are cheaper, more capable and easier to use.

"Historically, we invested a considerable amount of money into big iron," said Ian Homan, head of technology at the London Stock Exchange, which is using Microsoft's SQL Server. "Now we can (invest) that money into business applications."