In the war for database supremacy, it seems like IBM and Oracle have been locked in a titanic struggle since the dawn of time. Oracle has generally gotten the better of IBM in terms of market share, so it was with some surprise that earlier this week IBM put out an announcement about the fact that more than 100 SAP customers in the last six months have replaced their Oracle database with IBM's DB2 offering.
Now claims like this need to be taken with a grain of salt, especially ones that are timed to coincide with a rival's softer quarterly financial results. After all, we don't know how many SAP sites running DB2 might have switched to Oracle. But what is clear is that an alliance between IBM and SAP against a common enemy is starting to have some effect.
SAP, of course, is trying everything it can to oust Oracle databases from its customers' sites for fear they may one day adopt Oracle applications. IBM is trying to gain market share and preempt any ambitions that Oracle might have in terms of leveraging its database and applications to usurp IBM hardware now that Oracle is buying Sun.
As part of their combined effort, SAP and IBM have collectively offered some pretty aggressive pricing on DB2 to Oracle customers, many of which are looking at significant upgrade costs as they ponder moving to the latest Oracle 11g release. On top of that, SAP and IBM have tightly integrated the management framework of their respective offerings, making it much easier to manage DB2 from with an SAP environment than any customer could experience using Oracle.
For example, thanks to a new DB2 licensing deal worked out by Coca-Cola and SAP, Coca-Coca Bottling last year switched to DB2. In addition to lower licensing costs and better integration, the IT folks at Coca-Coca Bottling say they also saw a 40 percent reduction in storage costs because of the compression algorithms in DB2. Furthermore, they said the actual process of making the shift from Oracle to DB2 only took a couple of months.
In a down economy, incumbents always have more to lose than gain so it's little wonder that IBM is making some gains on Oracle in the high-performance database sector. But if more application vendors start to follow the same path as SAP, chances are that Oracle is going to be under a lot more pressure. On the flip side of that analysis is the continued rapid growth in Oracle's applications business, which may mean that application vendors are running out of time to make a difference. In SAP's case, for instance, there are more than a few customers who are unhappy with the company's maintenance fees, which a company like Oracle is sure to exploit.
In the meantime, plenty of IT shops are also abandoning both DB2 and Oracle in favor of open source databases or Microsoft. But there will always be application sectors that require much higher-performance databases. And at the moment, the fight between Oracle and IBM, not to mention Sybase, for the first time in years is too close to call.