Overview of 1999 DBMS Market Size,
Vendor Shares and Forecast

Abstract: This Market Analysis is an overview of the key statistical findings about the 1999 DBMS market. It presents new license revenue estimates for the most significant DBMS segments and platforms as well as leading vendor shares. RDBMS forecasts by platform and RDBMS revenue growth drivers are also discussed.

Key Business Issues
What is the DBMS market size?

Which vendors have the largest shares and the greatest momentum?

Which RDBMS operating system platforms have the greatest growth potential?

Strategic Market Statements
Driven by the demand for new Internet OLTP and data warehousing applications, the DBMS market grew 18 percent to almost $8 billion in 1999, with the Relational DBMS segment topping $6 billion ($2.6 billion was on Unix platforms and $1.7 billion on Windows NT), the embedded DBMS market reaching $450 million, and the mobile DBMS segment growing to $65 million.

Oracle edged out IBM as the DBMS market leader again in 1999 with a 31-percent share and Oracle's lead was significant in the Relational DBMS market, especially the Unix segment.

Oracle still leads in the RDBMS NT segment, but lost share; Microsoft and IBM showed the strongest momentum in the RDBMS market while Progress remains the market leader in the embedded DBMS market, and Sybase leads again in the mobile DBMS market.

For the RDBMS segment, Windows NT/Windows 2000 is expected to experience almost twice the growth rate of Unix from 1999 to 2004.

The embedded DBMS market is a segment that Dataquest devised in 1997 to better track DBMS products that are sold primarily to other independent software vendors (ISVs) or to OEMs. To qualify as an embedded database, more than 70 percent of revenue must be from indirect channels such as VARs, ISVs and OEMs. (For that reason, Microsoft DBMSs are not counted here.) Embedded DBMS products are not primarily sold directly to enterprise IT departments, but rather they are usually embedded in other software, such as in an accounting package, or in hardware, such as a network router. The IT buyer may not even realize a database is part of the product — the DBMS brand is typically hidden.

In 1999, the $450 million embedded DBMS market grew at only 11 percent year-to-year. The 20 percent-plus growth of leaders Progress, Sybase iAnywhere Solutions division, Pervasive and others was partially offset by contraction or slow growth of certain smaller legacy players. Progress, which led again in 1999 with a 21 percent share (see Figure 5), is continuing to execute on its strategy of helping its base of independent software vendors (ISVs) and value-added resellers (VARs) exploit the application service provider (ASP) opportunity and to move its Progress applications to the Web. Pervasive, the No. 3 player with an 11 percent share, continues to convert its large Btrieve base to its relational product. Sybase, No. 2 with a 16 percent share, is riding the mobile applications wave from the laptop to the personal digital assistant (PDA) and to even smaller footprints. Among the companies with legacy DBMS products, Ardent, with its Vmark and Unidata product lines, was acquired by Informix in 2000 — not for the DBMS lines but rather for its data warehousing assets.

Dataquest Perspective
Internet applications will continue to propel the DBMS and RDBMS markets to double-digit growth, barring a macroeconomic downturn, of course. Even if the more speculative dot-com, business-to-consumer (B2C) and business-to-business (B2B) experiments are swept by the wayside, the remaining entrants and the incumbent "bricks-and-mortar" companies will continue to pursue Internet-related business innovations such as e-merchandising, e-CRM and e-SCM to increase revenue and decrease costs.

Interest in rich media content management both by media companies and retailers engaged in B2C will also drive demand for DBMS software. As all companies seek to improve their human capital and knowledge management processes, Dataquest expects growing interest in implementing enterprise portals, which usually require brand new or expanded capacity DBMSs for management of both structured and unstructured content. Both large business and small-to-midsize enterprises (SMEs) will continue to expand their use of outsourcing and ASPs, driving the demand of ASPs/ISPs/NSPs for data center products including scalable and highly available DBMSs.

Besides using DBMSs for operations on and off the Web, companies continue to be interested in using DBMSs to improve their decision-making for enhanced operational efficiency and strategic advantage. Because storage technology is improving so rapidly and because progress in business intelligence software has made "managing by the numbers" so much easier, data warehousing and data marts, both on and off the Web, will continue to be the second most significant driver of demand for DBMS software.

Vendor Recommendations

• RDBMS vendors need to plan for the growing importance of the Windows NT/Windows 2000 platform. Vendors exclusively choosing a "Beat NT" or "Ignore NT" strategy — rather than a "Join NT" strategy — face a high risk of losing share.
• ISVs supplying enterprise-class management software and enterprise-class packaged applications can look toward continuing dominance by the Big Three RDBMS vendors. Partnering with all three for marketing and technology integration is advisable.
• ISVs and VARs supplying SME packaged applications, systems software or custom mobile applications can expect the leading embedded DBMS vendors to thrive and remain viable long-term partners for zero-administration or small-footprint DBMS components, tools and middleware.