The Database Report – October 2007

Here we are, nine months into 2007 already. And the database market is as active as ever with
new software releases, more acquisitions, more patches, ongoing lawsuits and continuing growth. So let’s take our regular quarterly look at the past three months of activity in, among, and
between the regular participants in the market for database management system software.


IBM and Microsoft Jump on the Acquisition Bandwagon…

One of the more intriguing aspects of the database market is following the various and sundry acquisitions that the major DBMS vendors make. We all know that Oracle has been on a multi-year
acquisition binge, but its closest two competitors, Microsoft and IBM, have acquired data management companies this quarter, as well.

Let’s start with Microsoft. Late last quarter Microsoft announced the acquisition of Stratature, a provider of master data management (MDM) solutions based in Alpharetta, GA.

The financial terms of the deal were not disclosed as Stratature was a small, privately held company. Evidently, Stratature’s primary area of strength is in enterprise hierarchy management, a
subset of MDM. Microsoft will use the MDM capabilities of Stratature to strengthen its business intelligence solutions. Furthermore, Microsoft has indicated that its MDM platform will be delivered
through Microsoft’s Office platform group.

Microsoft is taking Stratature’s products off the market post-acquisition, but has indicated that it will continue to support existing customers. Microsoft plans to eventually disclose a road map
for the incorporation of the Stratature technology into Microsoft offerings.

Next up we have IBM, who made two interesting data-related acquisitions this quarter. Both of the acquisitions are in the management tools area. First up was DataMirror, which IBM announced its
intention to acquire in mid-July, and completed the acquisition in early September. IBM paid approximately $161 million dollars for the company.

DataMirror is a provider of technology that identifies and captures data that has been added, updated or deleted and allows the changed data to be delivered in real time to processes, applications
and databases, ensuring that continuous, accurate and trusted information is available for decision-making. Essentially, DataMirror is an ETL (extract, transform, load) software provider.

The second of IBM’s acquisitions was Princeton Softech, which was announced in early August and completed September 13th. As Princeton Softech was a privately held company, the financial
details of the acquisition were not made available.
Princeton Softech has approximately 240 employees. By acquiring Princeton Softech, IBM adds database archiving, test data management, data privacy, and data classification and discovery software to
its portfolio. There is some overlap between the Princeton Softech portfolio and IBM’s existing offerings.


…And Oracle Does Not Jump Off

Okay, so what about the 2000 pound acquiring gorilla in this market, Oracle? Well, their appetite for acquisition has yet to be sated. Indeed, Oracle acquired two companies this quarter: Bharosa
and Bridgestream.

The Bharosa deal was announced on July 18th. Bharosa was founded in 2003, and its products are focused on fraud detection and identity theft prevention. The Authenticator product works with web
browsers to protect sensitive data, and the Tracker product combats fraud. Oracle will continue to offer both as stand-alone products, although they also will be integrated with Oracle’s
Identity Management solution. 

I think the interesting thing about this acquisition is that Bharosa was founded right around the same time that Oracle started its long acquisition binge that started with PeopleSoft back in June
2003. A cynical person might think that these guys started up their company with the idea of quickly selling it to Oracle to turn a buck… maybe not, but hey, that ain’t a bad idea, is
it?

The second of Oracle’s acquisitions this quarter was Bridgestream, which specializes in employee role-mapping software. Their product, SmartRoles, enables companies to map employee
responsibilities to allow them to control access to sensitive applications and data. Again, as with the Bharosa offerings, it looks like Oracle’s plan will be to integrate the Bridgestream
technology into its Identity Management offering.


An SAP Mea Culpa?

Perhaps the most intriguing story this quarter is a continuation of a tale that started last quarter when Oracle sued SAP claiming that the German juggernaut stole Oracle’s trade secrets. If
you want to read the complaint (pleasant dreams) you can find it here: http://www.oracle.com/sapsuit/complaint.pdf.

Well, guess what? It seems that SAP admits to some snooping by one of its units, sort of, but it is not really all that bad. Okay, what does that mean? Well, in early July, SAP acknowledged that
one of its business units, TomorrowNow, had made “inappropriate downloads” of Oracle computer code for fixes and support documents.

TomorrowNow is a Texas-based customer support unit of SAP, the stated objective of which is to enable their clients to maximize the value and extend the life of their enterprise software systems.
In other words, they provide ongoing support for applications including Oracle’s PeopleSoft and JD Edwards software.

Remember that SAP bought TomorrowNow in 2005, right around the same time that Oracle completed its acquisition of PeopleSoft. TomorrowNow was formed by former PeopleSoft engineers, promising to
provide less expensive support. And, in order to support the software, TomorrowNow has to be able to access documentation, right? And SAP claims that TomorrowNow did indeed have authorization to
download materials from Oracle’s website on behalf of its customers.

But let’s go back to the case, where all is not so cut and dried. SAP CEO, Henning Kagermann admitted that “Some TomorrowNow activity went beyond what is appropriate and contravened our
high standards and business procedures.” Yet, SAP also claims that TomorrowNow never shared any of the information it gathered with SAP or SAP America. On the other side, of course, Oracle
continues to allege that SAP and its SAP America operations benefited from the information downloaded by TomorrowNow.  Additionally, Oracle alleges that “the highest day of SAP
downloading occurred a week after Oracle filed its complaint.” Subsequently, however, SAP stopped all downloads and has revised its policies to permit downloading only at its customer
locations, with a TomorrowNow employee facilitating the downloads.

Furthermore, SAP is attempting to reduce the need for Oracle to launch extensive document searches and depositions relating to the case. It all boils down to how much discovery the court will
allow. SAP alleges that Oracle “overstates the complexity of the case” and proposes that the initial discovery phase can be conducted in several months. Oracle, though, is proposing 18
months at a minimum, citing the need to go beyond TomorrowNow’s operations and engage in international discovery.

In a late August positioning statement, SAP said: “The facts in this case are outlined clearly in SAP’s case management statement and in SAP’s response to Oracle’s
complaint. Oracle’s statement of ‘facts’ is dramatic but inaccurate. It is in the best interest of all concerned, including our customers, for this case to be resolved promptly.
We believe that it can be, despite Oracle’s position.” Sounds like SAP is not used to dealing with Larry Ellison, doesn’t it?

This should be fun to watch because I doubt it will be resolved any time soon. Larry Ellison has his biggest competitor in the applications space on the ropes; and if his past behavior is
indicative of his future behavior, I doubt he’ll let them off with a settlement. My bet is that this goes to trial and takes a long time to resolve.


Speaking of Larry Ellison

Ellison made his first trip to Israel in August and was quoted as saying, “Open source is not something to be feared. Open source is something to be explained. Open source wins not because
it’s open and not because it’s free. Open source wins only when it’s better.” And never shy about ripping a competitor, Ellison exclaimed that “Linux, I believe, is
competing very effectively with Windows.”

His position makes a lot of sense. Of course, it would not make any sense if Ellison were to be totally negative about open source, seeing as how they previously acquired Innobase (makers of a
database storage engine distributed under the GNU GPL open-source license).

Another interesting quote from Mr. Ellison is this: “Whenever open source gets to be better than what we do, like in the case of Apache and Linux, we will simply adopt it, distribute it and
support it.”

But I predict he’ll never believe that any open source DBMS is better than Oracle’s DBMS. And he’ll probably be correct for the foreseeable future… maybe even forever (but
that’s a long, long time).


Lots of New DBMS Releases

This quarter also saw a bevy of announcements and releases of new versions of the major DBMS solutions. Late last quarter (Q2), IBM released a beta version of DB2 Viper 2. Then Microsoft offered up
the Community Technology Preview (CTP) of SQL Server 2008. And, oh yeah, Oracle unleashed Database 11g on the world.
IBM DB2 Viper 2

Coming less than a year after the release of Viper, IBM claims that Viper 2 will simplify the development and administration of XML, provide integration of workload management functionality into
the database engine, and further automate backup maintenance.

Additional Viper 2 highlights include:

  • A redesigned redistribute database partition group utility: the new redistribute utility uses the minimum logging model and page-level data movement, thereby decreasing the
    database log file consumption and improving the speed of moving data.

  • Enhanced row compression: one of the more popular features of DB2 9, Viper 2 introduces Automatic Dictionary Creation (ADC) to ease compression implementation.

  • Database roles: role-based security and authorization simplifies securing access to DB2 data.

“The enhanced security and workload management features of Viper 2 will extend the technological lead that DB2 has on the competition,” said Bernie Spang, IBM’s director of data
servers. You can request to participate in the Viper 2 open beta by visiting the IBM website at http://www-306.ibm.com/software/data/db2/9/openbeta.html.


Microsoft SQL Server 2008

During the last week of July, Microsoft released the July Community Technical Preview (CTP) for SQL Server 2008. New CTPs are planned to be released every 2 months.
This July, CTP release provides several performance improvements and feature enhancements. The CTP enhancements include:

  • Enhanced data mirroring: a more reliable platform including support for automatic bad page repair, log stream compression, and additional performance improvements.

  • Extended Events (XEvents): Improves the amount and quality of event information available to DBAs and developers.

  • Reporting Services enhancements: major infrastructure changes including an enhanced processing engine and rendering extensions to enable new functionality. Scalability
    improvements remove the dependency on IIS, and a new report designer and configuration tool are also provided.

  • Visualization technology: to deliver better business insight and analytics, as well as integration with other Microsoft business intelligence products.

  • New Date/Time data types: these new data types enable applications to have separate date and time types, larger year ranges for the date value, larger fractional seconds for
    precision in the time value, a time-zone offset aware datetime type that contains date, time and time zone, as well as a user defined option.

The SQL Server 2008 CTP and additional information about SQL Server 2008 can be downloaded from Microsoft’s website at https://connect.microsoft.com/SQLServer/content/content.aspx?ContentID=5395.

SQL Server 2008 is still scheduled to become generally available in the second quarter of 2008. 


Oracle Database 11g

In probably the biggest news story in the DBMS world this quarter, Oracle unleashed the latest version of its flagship database server, Oracle Database 11g. This is the first major new
release of Oracle’s DBMS in more than four years, so it is big news to the database community.

Oracle touts this release as being the most innovative and highest quality software product Oracle has ever announced. That remains to be seen, but they also back up the claim with an impressive
list of over 400 new features. Additionally, Oracle claims to have submitted 11g to 15 million test hours after 36,000 person-months of development effort.

Oracle Database 11g, which was introduced by Oracle on July 11, offers some nice new functionality, including:

  • Real Application Testing: self-management and automation features to help organizations meet service level agreements.

  • Oracle Data Guard: enhancements enabling customers to use their standby database to improve performance in their production environments as well as provide protection from system
    failures and site-wide disasters.

  • Information Lifecycle Management and Storage Management: new data partitioning and compression capabilities, automated data partitioning operations, and extended partitioning to
    include interval, reference and virtual column partitioning.

  • Total Recall of Data Changes: enables DBAs to query data in designated tables “as of” earlier times in the past.

  • Improved Availability: Oracle Flashback Transaction simplifies the ability to back out a transaction made in error, as well as any dependent transactions; Parallel Backup and
    Restore helps improve backup and restore performance of very large databases; and hot patching improves system availability by allowing database patches to be applied without the need to shut
    databases down.

  • Oracle Fast Files: improved storage of large objects (LOBs) such as images, large text objects, or advanced data types within the database.

  • And many more, including faster XML, transparent encryption, embedded OLAP cubes, connection pooling and query result caches.

Indeed, there are way too many features to completely cover them in a database news column such as this.

An interesting component of this announcement though is that only Linux support for Oracle Database 11g shipped this quarter.

Finally, keep in mind that there are 3 different editions of Oracle Database 11g: Standard Edition One, Standard Edition, and Enterprise
Edition
(the freely downloadable Express edition has not yet been upgraded from 10g to 11g). The following website can walk you through which one makes the most sense for your needs: http://www.oracle.com/database/product_editions.html.


DBMS Financial News

Oracle’s fourth quarter results were quite impressive, too. The company posted net income of $1.6 billion, which equates to 31 cents per share. This is up from $1.3 billion or 24 cents per
share over the same quarter last year, representing an increase of 27 percent year over year.

Total revenues were $5.85 billion, up from $4.85 billion in the same quarter last year. New license revenue was up 17 percent to $2.48 billion. The database and middleware segment was up 18
percent, besting new license revenue for applications, which was up 13 percent.

What is Oracle’s take on these numbers? Well, they compare themselves to SAP. “Over the last twelve months, Oracle’s application new software license revenues grew at a rate of 32
percent while SAP’s growth slowed to 10 percent in their most recent fiscal year,” said Oracle President Charles Phillips.

Not to be outdone, IBM also reported strong growth. In July, IBM announce second quarter 2007 diluted earnings of $1.55 per share, an increase of 19 percent compared with diluted earnings of $1.30
per share in the second quarter of 2006. Second-quarter income from continuing operations was $2.3 billion, compared with $2.0 billion in the second quarter of 2006, an increase of 12 percent.

Revenues from the software segment were $4.8 billion, an increase of 13 percent compared with the second quarter of 2006. Revenues from IBM’s middleware products (which include DB2, Informix, and
IMS among other software) came in at $3.7 billion, up 16 percent versus the second quarter of 2006.

“This quarter’s strong revenue growth – our best since 2001 – underscores IBM’s global capabilities, as well as the higher value that clients place on our expanding
software product line and wide range of services offerings that are helping them transform their businesses,” said Samuel J. Palmisano, IBM chairman, president and chief executive officer.

Furthermore, IBM’s board of directors declared a regular quarterly cash dividend of $.40 per common share, payable September 10, 2007, to stockholders of record August 10, 2007. That is quite
impressive because it means that IBM has paid 367 consecutive quarterly dividends, starting in 1916. How many other companies can say that?

What about Microsoft? This past July, Microsoft announced revenue of $13.37 billion for the quarter ended June 30, 2007, a 13 percent increase over the same period of the prior year. Diluted
earnings per share for the quarter were $0.31.

The quarter also ended Microsoft’s fiscal year with revenue of $51.12 billion, a 15 percent increase over the prior year. Diluted earnings per share for the year were $1.42.

According to the company, revenue growth was primarily driven by solid customer acceptance of new products, as well as increasing sales of existing products such as SQL Server, Windows Server,
Visual Studio, and Xbox 360 consoles.

“Surpassing $50 billion in annual sales is a testament to the innovation and value that our product groups delivered into the marketplace, as well as the outstanding execution by our field
sales, marketing teams and partners to bring that value to life with our customers,” said Kevin Turner, chief operating officer at Microsoft.

So the Big Three DBMS vendors keep chugging successfully along… at least in terms of revenue growth.


Other News This Quarter

Well, we’ve talked about a lot of new already, but we’ve only focused on the Big Three, for the most part. So what else happened in the third quarter of 2007?

Teradata announced Teradata Warehouse Miner 5.1.  This new software offering enables data mining applications to be embedded and run within Teradata’s enterprise data warehouse. The
company touts that it uses an “open analytic approach” to provide access to best-of-breed data mining technologies available from Teradata’s set of global partners.

In early July, Filemaker delivered the Filemaker 9 product line, which includes FileMaker Pro 9, FileMaker Pro 9 Advanced, FileMaker Server 9 and FileMaker Server 9 Advanced. The new version offers
a number of new and interesting features including a new Quick Start screen, conditional formatting that highlights data based on parameters set by the user, and the ability to e-mail a link other
FileMaker users can click to instantly access the sender’s database. But the biggest new capability is that FileMaker Pro users and workgroups can talk to external SQL data sources in enterprise
databases like MySQL, Oracle SQL and Microsoft SQL Server.

EnterpriseDB, the commercial company based on the open source PostgreSQL DBMS, announced expanded capabilities for operating its EnterpriseDB Advanced Server as a data warehouse system. It hopes to
move into the data warehouse space with GridSQL, an add-on multi-server, parallel query capability that can improve performance for large analytical workloads that are typically run against data
warehouses. A beta release of GridSQL was delivered this quarter with general availability scheduled for the fourth quarter of 2007.

And what about PostreSQL itself. In September, full text search and other new features became available for free download in beta. The final release is scheduled for the fourth quarter of 2007.
More information, as well as PostgreSQL itself, is available online at www.postgreSQL.org.

And finally, Sybase roiled the waters in August at their annual TechWave conference. At least in terms of PR. Well, maybe roiled is too strong of a term. eWeek Magazine reported Sybase’s CEO,
John Chen, as saying, “The OLTP database, the die is pretty much cast. Everybody has tried to come grab our share, and they were never successful.” Which is true, Sybase still has a
nice niche that is not appreciably declining. Sybase still controls about 3 to 5 percent of the DBMS market. Of course, that market share is tiny compared to any of the Big Three. Evidently, Sybase
plans to differentiate itself in the database market by focusing on technology. It will be interesting to track exactly what that means, but Chen talked up Sybase’s clustering capabilities.


Summary

And so ends another edition of the Database Report. It was an active quarter, and the final quarter of the year promises to be just as interesting. So be sure to check in with us here again next
quarter to track the ongoing activity in the DBMS market and close out the year.

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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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