The Database Report – January 2002

The DBMS market in the fourth quarter of 2001 was marked more by rhetoric than reality. There were no new DBMS versions released by the major vendors, but there was a lot of marketing hype. That
hype included product feature announcements, death proclamations, spinning of financial results, and more. Let’s review the major DBMS news of the last quarter, starting with the company making
the most waves – and that would be Oracle.

Ellison Un-brake-able About Oracle Being Unbreakable

Unbreakable. That’s the big marketing push for Oracle this quarter. Larry Ellison, Oracle’s erstwhile CEO, hit the road proclaiming to everyone who would listen that Oracle is unbreakable.

Ellison gave keynote presentations at COMDEX, Oracle Open World, and Internet World where he lambasted IBM’s DB2 and lavished accolades on Oracle9i. The thrust of the attack centers on Oracle’s
shared-disk approach to clustering versus IBM’s shard-nothing approach to clustering for non-mainframe DB2 platforms. Ellison claims that Oracle’s approach is preferable for ERP workloads and is
more reliable. Of course, these assertions are debatable, but Oracle and Ellison are to be lauded for taking the attack right to IBM.

Reality, though, is a tough thing to debate. In a shared-nothing environment each system has its own private memory and one or more disks. The clustered processors
communicate by passing messages through a network that interconnects the computers. In addition, requests from clients are automatically routed to the system that owns the resource. Only one of the
clustered systems can “own” and access a particular resource at a time. If a failure occurs, resource ownership can be dynamically transferred to another system in the cluster. In a
shared-disk environment all of the connected systems share the same disk devices. So each processor still has its own private memory, but all the processors can directly
address all the disks. If a server fails, another server in the cluster can take over processing – the data is available because the disks are shared.

Both approaches allow for failover. If implemented effectively both clustering approaches work well. Indeed, IBM uses shared-nothing for DB2 clustering on Unix, Linux, and Windows platforms, but
shared-disk clustering in the mainframe environment.

Microsoft uses shared-nothing clustering and Ellison took a potshot at them, too. At Internet World Ellison surmised that it was Microsoft’s lack of reliability that IBM decided to copy. Of
course, this is a witty thing to say and it amused his audience. But it is somewhat disingenuous. Ellison also battered Microsoft’s Exchange Server claiming that Oracle’s application server was a
better-secured platform for users.

To further back up its “unbreakable” claim, Oracle touts its 14 international security certifications versus none for IBM and only one for Microsoft. It will be interesting to see if all of this
hoopla entices hackers to see if they can’t break into that unbreakable Oracle database – or if IBM and Microsoft respond by trying to acquire additional certifications.

In other competitive news, early in the quarter (October), Oracle released additional migration tools to encourage developers to migrate applications from IBM to Oracle 9i. The Oracle Migration
Workbench for IBM DB2 on AS/400 follows previous migration tools that automate migration from Informix to Oracle8i and Oracle9i software.

Obviously, Oracle is applying the heat to IBM. This is a wise move since IBM is Oracle’s biggest competition. And IBM is a bigger foe than any Oracle has faced previously. In the 1980’s Oracle
successfully beat Ingres; in the 1990’s Oracle took on Sybase and Informix and won in the marketplace quite convincingly. Now the competitors are Microsoft and IBM. Oracle is less focused on
Microsoft because SQL Server runs only on Windows platforms. IBM is another story. With DB2, IBM runs on all major platforms – mainframe, Linux, Windows, AIX, Solaris, and other Unix variants. And
IBM is a well-financed conglomerate for which software is its third largest business – IBM earns more in hardware and consulting revenue each quarter than it does on software. But IBM’s software
business is huge and IBM has been marketing the DB2 brand incessantly for more than a year now. Oracle has never had to face such a monolithic competitor as IBM Corporation.

And it appears that IBM is making some headway in the database wars. In Oracle’s first quarter earnings report, database sales fell by 7%. However, IBM reports 19% and 36% growth in the past two
quarters respectively. In terms of market share, Oracle is still king – according to Dataquest, Oracle enjoys a 33.8% market share. But if IBM continues to increase its market share and Oracle’s
market share continues to decrease, a new king may be crowned in the near future. And with IBM’s purchase of Informix, IBM inches that much closer to reigning over the DBMS marketplace.

But, for now, Oracle is still on top and touting its “unbreakability.”

Oracle’s Second Quarter

On December 13, 2001, Oracle reported in fiscal second quarter earnings. Earnings per share for the three months ended November 30, 2001, were 10 cents, down from 11 cents in the same quarter of
last year. Revenue was $2.36 billion, down from $2.66 billion in the same quarter a year ago.

But these earnings were in line with analysts’ lowered expectations. Of course, expectations were lowered after Larry Ellison warned in early November that business was slower than expected. In
fact, Mr. Ellison described the second quarter as “our toughest quarter in a decade.”

Oracle’s database revenue was $1.7 billion, down 10% from a year ago. And the all-important new license revenue for the database business fell 11% year over year. To be fair, though, it is very
likely that purchasing delays due to the slow economy and the 9/11 terrorist attacks impacted Oracle’s sales. But the perception that IBM is taking sales from Oracle lingers – and, of course, IBM
is encouraging that perception.

More News on the Oracle Front

Larry Ellison also was involved in somewhat stranger news this quarter. On October 8, 2001, Ellison placed an editorial in the Wall Street Journal advocating national identification cards for the
US in the wake of the 9/11 attacks. Ellison promoted the need for the government to implement a centralized database system and offered to provide Oracle software free-of-charge.

Perhaps Ellison is to be commended for at least suggesting a solution during a time of national emergency. But national identification cards are a very controversial topic. Privacy advocates are
sure to fight any such effort, regardless of its debatable merit. Additionally, it is not very wise to look like you are profiteering in the wake of a disaster. Of course, the first version of the
software Ellison offered would be free, but Oracle would profit very handsomely from future upgrades, consulting, and other services over the years. I wonder if Mr. Ellison would have volunteered
Oracle’s help if the government decided to use DB2 or SQL Server to implement a centralized database system for national ID cards?

In more tangible news, Oracle announced highlights of Oracle9i release 2 at Open World in December. It looks like Oracle intends to build workflow and event-management capabilities into upcoming
releases of the database. Usually these features are built into higher-level applications and application server software. But it appears that Oracle’s strategy is to move this functionality into
the database. If successful, Oracle will have an advantage over SQL Server and DB2 as Microsoft and IBM rush to offer similar functionality. This has been the pattern for the DBMS market for some
time now – the DBMS adds functionality and complexity by consuming and incorporating related technologies into its infrastructure. Witness the inclusion of previously separate technologies such as
OLAP, ETL, and data mining in today’s major DBMS products. Oracle also is working to expand the capabilities of its Real Application Clusters software with additional management functionality.

And the brain drain continues at Oracle. Jay Nussbaum, executive vice president of Oracle Service Industries, left the company after 10 years of service to become a senior executive at one of
Oracle’s partners. Nussbaum joins a long list of high-level executive to leave Oracle in the past year or so. Previous defections included former-president Ray Lane (second quarter 2000),
former-EVP Gary Bloom (fourth quarter 2000), and former-VPs Peter Donnelly and Michael Howard (first quarter 2001). Prior to his resignation, Nussbaum oversaw sales, marketing and consulting in the
government, education, health care, communications, utilities and financial industries. He was one of only a few executives who reported directly to Larry Ellison. Nussbaum’s duties reportedly are
being split up among several other Oracle executives including George Roberts, Kevin Fitzgerald, Keith Block, and Steve Perkins.

And at IBM…

IBM continues to produce healthy revenues even in the face of an economic downturn. Results for the fiscal third quarter ended September 30, 2001 were 90 cents per share. This represents a 17%
decline year-over-year for the company. IBM’s net income for the quarter was $1.6 billion (down 19%) on revenues of $20.4 billion (down just 6%) to $20.4 billion. Lou Gerstner, IBM CEO, attributed
the strong showing to the company’s services, software, and mainframe groups.

In mid-December news leaked about IBM’s plans to create an XML DBMS code-named Xperanto. The goal appears to be the creation of a native XML DBMS that is a subset of DB2. IBM intends to position
Xperanto as complementary to DB2. Xperanto will be used to tie together all the systems in an organization. It enables information integration, in the words of IBM. IBM’s goal is to enable the
combination of structured and unstructured data. This integrated information makes it easier for organizations to access content.

The infiltration of XML into the DBMS market is an interesting phenomenon that bears additional scrutiny. All of the major relational DBMS vendors – Oracle, IBM, and Microsoft – offer XML support
in their respective DBMS products – Oracle9i, DB2, and SQL Server. But it appears that there is a move afoot to create additional, native XML database servers such as Xperanto. An example of an XML
DBMS is Tamino from Software AG.

Time will tell whether a market exists for independent XML DBMS software. To me, it seems to be a step backward. Why not just enable the existing DBMS products to use XML as necessary? We’ll keep
watching this trend in future editions of The Database Report.

But, all in all, IBM appears to be on track. IBM continues to support Informix customers and continues to tout DB2 as the database server of choice for its long-term customers. IBM’s marketing
message is clear and their products are stable. Time will tell, though, if IBM decides to respond to Oracle’s “unbreakable” campaign.

Up in Redmond…

Most of the news from Microsoft these days does not focus on SQL Server. The Microsoft Xbox game console appears to be a hit this holiday season, Microsoft is focused on making Windows XP a
success, and the legal battles regarding Microsoft’s monopoly of the operating system business are slowly but surely evaporating. And Microsoft is touting new initiatives like the Tablet PC and
.NET quite vigorously.

But if you looked hard enough, there was Microsoft-related DBMS news this past quarter. On the bad side of the news was a new worm that targeted SQL Server. The worm was designed to target
Microsoft SQL Server platforms that have no password on the system administrator account. After finding a vulnerable system, the worm installs two Trojan horse programs that allow the worm’s
creator to control the server. But the worm was quickly rendered harmless because it relied on programs downloaded from a central location to operate – and those programs were quickly removed from
that central server.

Additionally, InfoWorld reported in November that Microsoft expects to issue the first beta version of Yukon (the next version of SQL Server) in the second quarter of 2002. And the final version
should be generally available in the first half of 2003.

Finally, in early December 2001, Microsoft announced plans for a tool that will tighten the relationship between .NET and SQL Server 2000. Microsoft plans to allow SQL Server to expose its stored
procedures and its tables into customer’s Web services. The tool should be available when Visual Studio .NET ships – which is either out by the time you read this or imminent.

Down in Emeryville…

Sybase was none-too-happy that Larry Ellison proclaimed them to be “dead” at Oracle Open World. The actual quote from Ellison is “Sybase has been dead a very long time. May they rest in peace.”
Well, judging from their response Sybase does not intend to rest any time soon – in peace or otherwise.

Right after Ellison’s proclamation of death, Sybase unleashed a storm of PR outlining its offerings. The thrust of Sybase’s message was that Oracle is only now announcing technology that Sybase
has had for awhile. Of course, it is true that Sybase is a viable competitor to Oracle. It is not really true though that Sybase is innovating as compared to Oracle, though. Sybase has suffered
some bad times over the course of the past few years – they have lost market share and are not the company they once were. But they are not “dead.” And it is likely that Sybase users will
continue to be supported by Sybase for a long time.

In late October, Sybase announced its third quarter results – a net loss of $7.1 million that translates to 7 cents per share. In the third quarter of 2000 Sybase had a net income of $16.5 million,
or 18 cents per share. Excluding charges related to acquisitions, restructuring and other activities, the company posted pro forma earnings of $20 million, or 20 cents per share, vs. $26.7 million,
or 29 cents per share, a year ago. Sybase’s total revenue was $226.3 million, down from $239.1 million in the same quarter of last year. These results were better than analyst’s expectations of
$221.4 million and 18 cents per share pro forma.

And Sybase is not focusing only on Oracle. Sybase announced a partnership with Sun Microsystems for data warehousing targeted at warehousing leader IBM (DB2) and NCR (Teradata). The effort relies
on Solaris and Sun hardware, Hitachi storage and Sybase’s IQ Multiplex software. It is a full 64-bit architecture capable of high performance for a large number of concurrent users by addressing
huge amounts of memory and data.

So don’t write Sybase off just yet – even if they are struggling a bit.

Summary

The DBMS market keeps humming along and the major players keep on adding more functionality to their products. And more complexity. The Database Report will be here each quarter to help you pick
your way through the information and make sense of it all. See you next quarter!

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About Craig Mullins

Craig S. Mullins is a data management strategist and principal consultant for Mullins Consulting, Inc. He has three decades of experience in the field of database management, including working with DB2 for z/OS since Version 1. Craig is also an IBM Information Champion and is the author of two books: DB2 Developer’s Guide and Database Administration:The Complete Guide to Practices and Procedures. You can contact Craig via his website.

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