Despite Y2K Worries, Database Sales Grow

The worldwide database software market increased by 18 percent last year despite concerns that sales would be hurt by Y2K-related spending freezes, according to a report released today by Gartner Group's Dataquest unit.

Worldwide database sales reached almost $US8 billion last year, buoyed by the growth of Internet-based computing and business intelligence applications, said Norma Schroder, a Dataquest analyst who wrote the report.

The report predicts that the market will grow to $US12.7 billion by 2004, and Schroder said Windows NT database revenue should almost equal Unix sales at that point. "NT (software) is cheaper, and it's somewhat closing the feature gap with the Unix platforms," she said.

For now, Oracle and IBM are still "virtually neck-and-neck" for the top position in the overall database market, Schroder said. Taking all forms of databases into account, Oracle had a 31.1 percent share of the market last year, with IBM close behind at 29.9 percent, according to the Dataquest report. Microsoft was a distant third at 13.1 percent.

In the relational database sector, though, Oracle had a much wider lead of about 10 percentage points, the same gap Dataquest gave it in 1998. Schroder said Oracle had a strong year last year, with new database license growth of 19 percent despite its large installed base.

IBM also reported robust sales growth thanks in part to the strength of its mainframe databases, Schroder said. And Microsoft "came roaring back" in the Windows NT database business, driven by a new version of its SQL Server 7.0 database, she added.

Oracle, IBM and Microsoft are likely to remain the dominant database vendors, but Schroder said there's still plenty of room for other vendors that can cater to niche application areas or industry-specific markets.

For example, she said, a new niche is emerging for start-ups that are catering to the application hosting market with low-cost, high-performance databases tailored for Web uses.