Oracle Contests Database Rankings

The report, released Tuesday by Gartner (NYSE: IT) Dataquest, dethroned Oracle (Nasdaq: ORCL) and awarded the database crown to IBM (NYSE: IBM) , which allegedly captured 34.6 percent of the market in 2001 compared with Oracle's 32 percent.

The study showed that Oracle lost 2.1 percent of total database market share in 2001. That figure is no small matter in the technology sector, where competitors often use market share statistics for promotional purposes.

Oracle Takes Off Gloves

Oracle released a statement Wednesday morning that challenged IBM and Microsoft (Nasdaq: MSFT) to provide "audited numbers" to analyst firms.

"Oracle is challenging assumptions that [it] is losing market share to competitors, given that a review of independent research and the activities of Oracle's installed base does not support this," Oracle chief financial officer Jeff Henley said.

Henley noted that revenue and growth data provided to industry analysts by vendors is not independently validated.

Gartner Responds

Colleen Graham, an analyst in Gartner Dataquest's software industry research group, told the E-Commerce Times that she supports the report.

Graham disputed Henley's claim that data provided to Gartner by vendors was not independently verified. She also asserted that identical methodology was used to examine Oracle, IBM and third-place Microsoft.

"Oracle has used the number one rating in years past as a marketing tool," she said. "They never contested the methodology before they dropped to number two."

The Informix Factor

IBM's acquisition of Informix is the only reason it took the number one spot, according to Graham. Historically, IBM and Oracle have been neck-and-neck in the database market, separated by a paltry US$30 million.

If Oracle had acquired Informix, Graham said, it would have remained atop the rankings and actually solidified its position.

"Oracle knew that this report was going to be a problem," she noted. "They have had very poor revenue numbers [for] the past few quarters, and that's certainly no secret."

IBM into the Fray

IBM spokesperson Lori Bosio told the E-Commerce Times that while Oracle's database business has declined, IBM's database revenue has grown for 20 consecutive quarters.

"Two years ago, Oracle said, 'IBM is not even a player in this space,' and we've been gaining on them aggressively since that time," Bosio said.

While Bosio agreed with Graham that the Informix acquisition has been a catalyst for IBM's growth in the database market, she said other factors are also noteworthy.

Specifically, she pointed to IBM's customer service commitment, partnering strategy, overall leadership and total cost of ownership, as well as DB2's momentum, as driving forces behind the company's newfound database dominance.

"Gartner has not changed their methodology," said Bosio, "and Oracle stood by their methodology when they were number one."

The Gartner study did note that although IBM's and Microsoft's databases gained market share compared with Oracle in all categories, Oracle's 9i software still dominated the $3 billion UNIX market in 2001.

Microsoft could not immediately be reached for comment.