Technology industry research firm IDC, which released the report, said that Oracle's market share from 2001 to 2002 dropped five percent to 39.4 percent overall. IBM and Microsoft appeared to be gaining ground on Oracle, growing by nine percent and 15 percent, respectively, during 2002. That leaves IBM with 33.6 percent of 2002 share and Microsoft with 11.1 percent, according to IDC.
IDC said the top five relational database software companies, ranked according to revenue, are Oracle, IBM, Microsoft, Sybase, and NCR Teradata. Collectively, they represent nearly 90 percent of database software sales worldwide.
Carl Olofson, the author of the preliminary report, said that the companies' differing business models help explain some of the shift in market share.
Oracle is particularly reliant on sales of complex, and generally more lucrative, database software that can serve up data for a large number of people or handle demanding processing jobs. Sybase, which saw its share slide 6.3 percent during 2002, also depends on larger contracts, according to Olofson.
IBM, for its part, benefited from its services organisation, which sells its DB2 database and WebSphere Java application server as part of custom-written applications, such as customer relationship management projects, Olofson said. IBM also enjoys regular database license revenue from its mainframe and AS/400 server lines.
Meanwhile, Microsoft continues to gain market share with small to medium-size businesses, Olofson said. Microsoft's SQL Server is generally easy to use and has a low cost of entry, which appeals to small and medium-size companies that often have tight budgets and limited staff, he said.
Looking ahead, IDC's Olofson sees continued competition among the top three players in particular. Oracle and IBM appear ready to tackle the midsize business market more aggressively, while Microsoft will be pushing for higher-end installations with a forthcoming 64-bit version of its database.
"Clearly, the bulk of revenue in the RDBMS (relational database management system) market is becoming increasingly concentrated in the top vendors," Olofson said in the report. "Those vendors are actively working out ways to compete in each others' well-established market segments."
While IDC maintains that Oracle leads the database software market, a controversial study from market researcher Gartner, released last summer, showed that the company lost its crown to IBM in 2001. Oracle later challenged the results of the study. Gartner has not yet released market share information for 2002.
