Database battle hots up as DB2 takes on Oracle8 and SQL Server

Cost of ownership and value for money are in the spotlight for database users. Janice McGinn looks at what rivals IBM, Oracle and Microsoft have to offer in the fight for corporate minds and pockets.

As competition in the database market continues to hot up, users are demanding more functionality and better value for money from products.

Oracle felt the full force of these new expectations last week, when its user group attacked when the company for 'unfair' licensing of its database products and complained it offered poor value for money.

Oracle has been slow to recognise the increasing importance of cost ownership to users. As a result, it is facing some stiff competition from Microsoft, which launched its budget database SQL Server 7 last year. IBM's old workhorse DB2 is also presenting a renewed challenge.

Analyst GartnerGroup said in March that SQL Server would cost 36% of Oracle's offering when bought under Microsoft's Enterprise Agreement scheme.

Microsoft believes such apparent endorsements will pave the way for its planned invasion of the database high ground held by Oracle and IBM.

But Gartner warns that SQL Server will prove considerably more expensive in the long term than any of its competitors.

'Once businesses are locked in, they will be exposed to increased licensing fees from price increases and changes Microsoft makes to user terms. Businesses negotiating Enterprise Agreements should attempt to lock-in product use rights and negotiate price and maintenance caps,' says Gartner in its report, Microsoft Enterprise Agreement: Impact on DBMS Pricing.

Carl Olofson, a database director at analyst IDC, says SQL Server contains hidden dangers, and its newness could deter some users. Existing SQL users face a difficult task converting data when upgrading, he says.

Olofson describes the changes in functionality between SQL Server 7 and 6.5 as a quantum leap. For the first time, a database shipping with integrated online analytical processing (Olap) is likely to appeal to smaller and medium-sized customers with tight IT budgets, he says.

'The changes in product and product strategy are designed to make SQL Server 7 more practical for small system users, more robust for middle-sized system users, and more acceptable to larger business users,' says Olofson.

But SQL Server is also dogged by age-old questions concerning the scalability of Windows NT, the only operating system under which SQL Server can run.

If you don't fancy buying into either Oracle or Microsoft, there is always DB2, the grandad of databases. DB2 has enjoyed a resurgence in recent years, and sales are up.

IBM led the database market in licence revenues for 1998, due mainly to strong mainframe DB2 database sales and fast-growing Unix and Windows NT versions, according to Dataquest.

IBM claims that NT can support DB2 in high-end environments. Big Blue recently ran a one terabyte, 32-node TPC-D benchmark on multiple clustered servers using DB2 on NT.

IBM says no other database has operated across more than a six-node cluster or has the capacity to handle more than 300Gb of user data in an audited, industry standard benchmark on NT and Intel-based servers.

Major changes are in store for DB2 to increase its mass-market appeal.

IBM will simplify DB2's pricing which varies from per seat on AS/400, to a combination of engine size and user licenses on S/390.

'Over time, we and others will move to server-oriented pricing,' says Jeff Jones, IBM data management marketing senior program manager.

In the meantime, customers can expect good price deals on DB2.

Ovum analyst Mary Hope says that IBM is worried about losing business to SQL Server, and recently sold some DB2 licences at prices similar to the Microsoft database.

'IBM wants market share, and Microsoft is rewriting the book. There's been more negotiation since the launch of SQL,' she says.

Janet Perna, IBM general manager of data management, says Big Blue's strategy is to sell DB2 more aggressively.

'We've traditionally sold DB2 into the IT department while Oracle sells into the same businesses,' she says.

'Oracle's database goes to departmental users as part of an applications sell. We want to get to different customer and decision-makers.'

The DB2 roadmap is aimed at the growing ecommerce market. Future developments will focus on growth in performance and scalability, although Big Blue is unable to provide figures or a timescale. This is a change of focus for DB2, as IBM spent the last five years focused on adding functionality to the database, according to Phil Payne, mainframe research analyst with Isham Research.

'The individual transaction rates of web applications will be far higher than current systems. Many transactions will be asynchronous and overlapping. That puts the onus on performance,' says Payne.

Big Blue plans to push ahead with ebusiness, enterprise resource planning (ERP) applications and integrated Java support.

IBM plans to mark the end of this five-year development cycle at its International DB2 User Group conference this week. Announcements are expected on the availability of DB2 Version 6 for S/390; new features for Unix, Windows, OS/2 and mobile systems; and new partnerships, including an exclusive agreement with Siebel Systems on its customer relationship management systems.

Jones says that IBM's approach to databases, the Internet and ecommerce differs radically to Oracle, its main rival. Oracle's latest Internet initiative comes in the form of a web-ready database called Oracle8i.

'Oracle says it will supply everything via 8i, which means that customers face a lot of data migration.' says Jones. 'Similarly with the Java Virtual Machine (JVM). Oracle has built its own to maximise performance, but that creates problems and conflicts with the official JVM platform.'

Jones admits that SQL Server will challenge DB2 in the coming months, particularly because of SQL's integrated Olap services.

'Microsoft is really good at ease of use, installation, automation and maintenance. It's taking these attributes from the desktop to business and it continues to raise the bar. Built-in analysis capabilities like the new Olap features are extremely good,' says Jones.

But IBM will say SQL Server's scalability makes it vulnerable.

'Microsoft's research labs have said DB2 under Windows NT is a wonderful example of what NT can do. Microsoft isn't there yet with SQL Server, and it can't play in the business space until it is,' says Jones.

'Our customers want mundane stuff like growth, scalability, predictability and reliability. They're delighted to have features like Java support and support for different data types, but they expect us to deal with the deeper, harder problems.'

IBM is also broadening DB2's appeal by banging the Linux drum. Big Blue has registered 34,000 downloads of DB2 for Linux since December. 'Academia and ISPs are the two biggest user populations using Linux, but the commercial demand is fast growing with organisations considering departmental and workgroup applications,' says Jones.

Gordon McKenzie, director of information strategy with the Scottish Police Service and a recent DB2 convert, says Linux appeals to organisations with limited IT budgets.

Such organisations could face limited support because of Linux's freeware status, he warns.

'A couple of our police forces are looking at Linux for the web, and obviously a free operating system is attractive. But the potential problems include support and maintenance and suitability for mission-critical applications,' he says.

McKenzie agrees with analysts who say that DB2 offers better long-term cost of ownership than it rivals. The Scottish Police Service will migrate its 4,000 users on different systems to DB2, running under either NT or Sun's Solaris.

DB2 worked out cheaper than Oracle, even though the police lacked a DB2 background.

'The cost of adopting DB2 included retraining and skills acquisition, but the financial difference between Oracle and DB2 was significant in a five-year cost-of-ownership equation,' says McKenzie.

'The cost of DB2 and SQL Server were comparable. In fact, DB2 was slightly cheaper, but the functionality was very different.'

But it's not all plain sailing for DB2. Oracle database sales are strong, despite criticism of its licensing and pricing policies by UK users.

Oracle's 8i database supports an integrated JVM, web development tools and is pitched at mobile devices. 'The Internet changes everything and we need new databases to exploit that,' says Gary Pugh, Oracle database marketing manager.

Oracle remains the number one player if you exclude mainframe and AS/400 database licences. According to IDC, Oracle's share of the relational database market in 1998 was 40.4%, compared to Microsoft's 5.1%, Microsoft saw its annual database growth rate decline by more than half.

But IDC predicts that SQL Server will be popular and will experience strong sales in the first half of this year, particularly among NT users, allowing Microsoft to capture the NT database market lead, at least temporarily.

So the heat is on for DB2. Microsoft has a cut-price database - which some analysts say will be expensive in the long-term - and Oracle is pushing the Internet hype with Oracle8i. But IBM is no sleeping giant: it is cutting deals to retain database market share and pushing ahead with a new price model.

Hope says customers will mix their database purchases to suit particular needs. However, she says differences between the leading products are subtle, and traditional demarcations are eroding rapidly.

'It's no longer DB2 at the top, Oracle in the middle and SQL Server at the bottom,' she says.

'They compete across the board, but I believe there is steady expansion in DB2's customer base. DB2 is on a roll at the moment. I'm hard pressed to think of serious functional differences between Oracle8i and DB2, but DB2 is very competitive in terms of price.'

How IBM, Oracle and Microsoft database prices compare

 DATABASE LICENCE
 IBM           IBM DB2 Version 5. SIngle user                 £539
 Oracle        Oracle WorkGroup. SIngle user                  £230
 Microsoft     MS SQL Server Version 7. Five user           £1,225
 
 
 DATABASE SOFTWARE
 IBM           IBM DB2 Connect Ent Edit. Single user        £1,582
 Oracle        Oracle WorkGroup                               £230
 Microsoft     MS SQL Server Ent 7. Unlimited user         £23,005