The Database Report – January 2009

Here we are at the end of one year and the beginning of another. And 2008 was another banner year for data and database management! Although those of us in the trenches dealing with data and
database systems on a daily basis had a lot to occupy us this past year, we all probably have our fingers crossed hoping that 2009 will be as profitable… especially in light of the current
economy.

Before we embrace the New Year, let’s take some time to review the goings on in the DBMS marketplace during the fourth quarter of 2008. It was not a very active quarter for database news, but
there were some interesting activities to report.


DBMS Vendors – By The Numbers!

One of the ongoing barometers of the health of the DBMS marketplace is measured by watching the quarterly financial results reported by the Big Three DBMS vendors: Oracle, IBM and Microsoft.
Let’s begin with Oracle.

First quarter earnings per share were up 32% to 29 cents; net income was also up 32% to $1.5 billion, compared to the same quarter last year. Total revenues were up 18% to $5.4 billion and total
software revenues were up 21% to $4.3 billion. Even software license updates and product support revenues were up, coming in 24% better at $3.0 billion. Oracle’s operating margins hit their
highest level ever, which impacted its shares sending them up 6% after earnings were announced.

Most important to the DBMS crowd is that Oracle’s strong 2009 fiscal first quarter was built primarily on growth in its database software line which grew 27% to $906 million. For Oracle
watchers, a potential problem may be brewing though. Sales of its business applications software experienced a 12% drop. As regular readers of The Database Report know, Oracle has been on
a buying spree for years now, collecting new business applications. If sales of these apps start to decline, it could spell trouble for Oracle.

Hot on the heels of Oracle’s earnings, IBM announced its third quarter 2008 numbers. Earnings per share were $2.05, representing an increase of 22% compared with the third quarter of 2007.
IBM also reported a 20% increase in net income at $2.8 billion. IBM’s total revenues for the quarter came in at $25.3 billion, up 5%. The company further indicated that it expected full-year
2008 earnings per share to be at least $8.75, which would be a year-to-year growth of 22%.

The company’s earnings beat Wall Street’s forecast by 4 cents per share. “Our results demonstrate that the combination of a steady base of recurring revenue and profits,
investments for growth in emerging markets, a range of products and services that deliver value to clients, and a strong and flexible financial foundation give IBM a competitive edge in good times
and tough times,” said Samuel J. Palmisano, IBM chairman, president and chief executive officer.

For the software side of IBM’s business, revenues were $5.2 billion, up by 12%; and income (pre-tax) was up by 19%. Revenues from IBM’s total middleware products, which primarily
include WebSphere, Information Management, Tivoli, Lotus and Rational products, were $4.1 billion, up 12% versus the third quarter of 2007. Revenues for Information Management software, which is
primarily its DBMS software but also contains other data-related software offerings, increased 26%.

IBM’s mainframe revenue was up 25%.

And up in there Redmond, Microsoft is doing well, too. The company announced revenue of $15.06 billion for its fiscal quarter 2009. This represents a 9% increase over the same period last year.
Operating income, net income and diluted earnings per share for the quarter were $6.00 billion, $4.37 billion and 48 cents, respectively.

 “In a challenging economic environment, the first-quarter results exhibit the strength and diversity of our business model,” said Chris Liddell, chief financial officer of
Microsoft.

SQL Server revenue is lumped into the Server and Tools division, which experienced a 17% revenue growth over the same quarter last year and a 20% gain in income over the same quarter last year. Of
course, this is not all attributable to SQL Server because Microsoft sells and markets many different server solutions.

Overall, though, the DBMS vendors are continuing to do well financially… at least for now. With the current financial meltdown we are all experiencing, it would not be surprising if even the
Big Three DBMS vendors cooled down next quarter. Indeed, analysts are expecting Oracle to report weaker than previously expected license revenue and a potential earnings miss for their fiscal
second quarter. So you will have to check in with The Database Report next quarter to keep an eye on this.


Acquisitions During the Fourth Quarter of 2008

As we have all come to expect, Oracle made the most acquisition-related news during this quarter – just like it does most quarters.

Leading off the quarter, right out of the box in early October, Oracle announced its intention to acquire Advanced Visual Technology Ltd. (AVT), a provider of 3D visual macro space planning
software for retailers.

Financial details of the transaction were not disclosed.

The Advanced Visual Technology software enables retailers to collaborate with their stores and suppliers to design and plan retail floor space in real time. Oracle expects to combine this newly
acquired software with its Oracle Retail comprehensive application suite.

 “Adding AVT to our portfolio of retail applications further builds on our strategy of providing broad and deep industry solutions that help transform the economics of retail
businesses,” said Duncan Angove, Senior Vice President and General Manager, Oracle Retail.

Then, a few days later, and still early in October, Oracle stuck again. This time the company announced that it planned to acquire Primavera, a product portfolio management firm. Primavera’s
PPM software helps companies propose, prioritize and select project investments, and plan, manage and control the most complex projects and project portfolios.

Together with Oracle’s applications and infrastructure software, Oracle expects to provide a comprehensive enterprise project portfolio management solution that uses real-time data to help
companies allocate resources, reduce costs, meet delivery dates and make better decisions.

Financial details of the transaction were not disclosed.

“Enterprise PPM is moving to the forefront of business strategy for industries managing complex and capital intensive projects, and has emerged as a global driver for value creation and
business success,” said Oracle President Charles Phillips. “With 20% of the world’s GDP spent annually on projects, the addition of Primavera is expected to extend Oracle’s
leadership position in the enterprise application space.”

This is a significant acquisition for Oracle. Primavera has a large customer base in the PPM space; its software is used by 375 of the top 400 engineering companies and all five branches of the
U.S. military.

IBM also made some acquisition-related news this past quarter by announcing its intention to acquire Transitive, a leader in cross-platform virtualization and a pioneer in developing technologies
that allow applications written for one type of microprocessor and operating system to run on multiple platforms – with little or no modification.

This is not really a pure data management acquisition, but it was an interesting one none the less.


A Couple of Big Database Conferences

Oracle Open World 2008 was held the last week of September at the Moscone Center in San Francisco, California. This is not only one of the biggest database focused conferences, but one of the
biggest information technology conferences altogether. Attended by about 40,000, this year’s Oracle Open World did not disappoint as a place to learn about all things Oracle. Even though
overall attendance declined from 45,000 last year, the excitement level never wanted.

Oracle Open World is known for its many interesting keynote addresses, including this year a Sunday Keynote with Washington’s best-loved political couple Mary Matalin and James Carville. But as
usual, Larry Ellison’s keynote address on Wednesday was one of the biggest draws, and Oracle’s flamboyant CEO did not disappoint. He spoke about performance, a topic near and dear to
database technician’s hearts, and drew parallels between racing his yacht and helping customers handle data bandwidth issues.

Ellison also announced the Oracle Database Machine, which he touted as the world’s fastest database machine. The end result of a three-year development program and boasting eight (8) Oracle
Database servers on 64 Intel processor cores running Oracle Enterprise Linux and Oracle Real Application Clusters, it may indeed be just that. “For the first time, customers can get smart
performance storage designed for Oracle data warehouses, that is ten times faster,” said Ellison.

It will be interesting to see how Teradata and Netezza react to this announcement as they are the companies that appear to be in Oracle’s sights with the Oracle Database Machine announcement.

Ellison also made some waves at Oracle Open World with his comments on cloud computing. The Wall Street Journal reported Ellison as responding to an audience question about cloud computing saying,
“The interesting thing about cloud computing is that we’ve redefined cloud computing to include everything that we already do. I can’t think of anything that isn’t cloud
computing with all of these announcements. The computer industry is the only industry that is more fashion-driven than women’s fashion. Maybe I’m an idiot, but I have no idea what
anyone is talking about. What is it? It’s complete gibberish. It’s insane. When is this idiocy going to stop?”

And you have to admit, there’s some truth to what Ellison is stating, isn’t there?

Also this quarter, IBM held its annual Information on Demand conference the last week of October at the Mandalay Bay in Las Vegas, Nevada. Even though this conference is much smaller than the
Oracle event, IBM customer and technicians flocked to Las Vegas to learn the latest and greatest on IBM’s data management offerings. And with over 700 sessions and reportedly more than 7,000
attendees, the Information on Demand conference is probably the second largest and most important data-focused event each year, after the Oracle Open World.

As regular readers of The Database Report know, IBM has been acquiring data management companies at a rapid pace the past couple of years (Cognos, FilesX, Solid, Princeton Softech,
Diligent and Data Mirror, to name a few). And the Information on Demand conference is the place to see what IBM is doing with these and its other data management offerings, such as its many DBMS
offerings including DB2, IMS and Informix.

Several announcements were made at this event, but the biggest one was IBM’s launch of their Information Agenda initiative. The offering assists customers with new software and services. This
offering includes seven industry-specific and financial management solutions to help customers develop performance management capabilities in the areas of finance, pharmaceuticals, internal
controls, sales and operations planning, municipal scorecarding and business reporting. These solutions are built on technology derived from IBM’s acquisition of Cognos. IBM is also offering
comprehensive consulting services focused on analytics software; these services will help customers design, implement and operate a Competency Center in their own organization.

Also held during the fourth quarter of 2008 was the European International DB2 User Group (IDUG) in Warsaw, Poland. Much smaller than IOD, this meeting is a user run conference that focuses on DB2.
The European event, held in the middle of October, was attended more than 500 members of the DB2 user community. Delegates participated in more than 100 technical sessions dedicated to a variety of
topics on DB2.


Microsoft to “Climb” Kilimanjaro for BI in SQL Server

In October, Microsoft delivered its road map for SQL Server Kilimanjaro, which will contain new capabilities for business intelligence. Additionally, the folks up in Redmond unveiled plans for
integrating the recently acquired DATAllegro technology with SQL Server. Microsoft’s hope is to better compete for data warehouse implementations with SQL Server by integrating DATAllegro.

The news about Kilimanjaro came out during Microsoft’s BI conference in Seattle, Washington (yet another data related conference during Q4). But the “news” was somewhat confusing.
Kilimanjaro is not the next release of SQL Server 2008. It is a set of business intelligence features that Microsoft will integrate into SQL Server. And it actually spans two projects: Gemini,
which will consist of a set of tools for reporting and analytics; and Madison, which will integrate the DATAllegro technology for large data warehouse support.

“Microsoft’s goal is to transform the way companies think of BI through familiar and intuitive business-friendly tools that help them unlock the power of BI across their
organizations,” Stephen Elop, president of the Microsoft Business Division told the more than 2,500 conference attendees. “If you know how to use Word and Excel, then you’ll be
able to use our BI – that’s our commitment to customers.”

Later, in November, Microsoft previewed SQL Server Kilimanjaro at the annual Professional Association for SQL Server (PASS) Conference (yes, yet another Q4 data related conference).

It is interesting to note that the announcement of the Kilimanjaro project comes just two months after the general availability of SQL Server 2008 . Microsoft has committed to unleashing new, major
SQL Server releases on a 24 to 36 month schedule. But Microsoft has targeted the availability of SQL Server Kilimanjaro to within the next 12 months via a community technology preview (CTP).


What About Sybase?

In mid-December Sybase announced that it would offer free licenses of its Eclipse-based database development tool, WorkSpace, with the upcoming release of Adaptive Server Enterprise (ASE) 15.0.3.
This is good news for Sybase customers as they will be able to use WorkSpace Database Development for ASE and SQL Anywhere for free through 2009.

The latest release of WorkSpace includes enhanced support for third-party Java Virtual Machines within the database. Sybase Adaptive Server Enterprise (ASE) 15.0.3 is scheduled for availability
within the next 30 days.


And So the Curtain Falls on Yet Another Year

As we come to the end of another edition of The Database Report, we also come to the end of another year. The DBMS marketplace continues to be chock-a-block with activity, and we will be
here to cover everything that happens in 2009. So be sure to check in with us again next quarter, and every quarter, to catch up on the news and issues impacting database users and the DBMS
market.

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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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