IBM has passed Oracle as the leader in overall database management system (DBMS) market share in new license sales, according to research from Gartner Dataquest. IBM held 34.6 percent of the market in 2001, compared to Oracle's 32.0 percent.

Big Blue's acquisition of Informix in 2001 was the determining factor, Gartner says, giving the company a 3 percent boost in market share.

"The addition of Informix products gave IBM the critical push it needed to take the market leadership position," said Colleen Graham, industry analyst for Gartner Dataquest's Software Industry Research group. "Without Informix, the contest would have been essentially tied between IBM and Oracle, which were separated by a mere US$30 million in new license revenue."

The report adds to Oracle's troubles, including controversy over a proposed contract for database software with the California state government.

Oracle issued a statement refuting Gartner's findings. Gartner researchers examined the overall database market, including databases on outdated legacy systems, rather than just "modern" relational databases, according to Oracle CFO Jeff Henley. He says a closer examination reveals only about 37 percent of IBM's database business is for UNIX and Windows NT systems. That focus creates misperceptions about Oracle's place in the market, Henley says.

Oracle issued a challenge IBM and Microsoft to give analysts their "audited" numbers, and for analysts to focus on the "modern database system market, comprising UNIX, Linux, and Windows NT."

Relational DBMS (RDBMS) software makes up 80 percent of the overall database industry, Gartner reports. The relational database is an important e-business component because it provides a SQL interface users and application programs can use to access data. Programs and users can issue SQL statements to query a relational database for information and to gather data for reports.

Oracle continues to lead the RDBMS market, especially the UNIX RDBMS segment. In the last year, Microsoft moved into the first position in the Windows RDBMS segment with 39.9 percent of the market, followed by Oracle with 34 percent.

Slow growth makes for tight competition

Overall growth for 2001 was relatively flat, Gartner says. New license sales amounted to $8.8 billion, up only 1.4 percent from 2000. The market continues to be dominated by the "big three" relational database products: IBM DB2, Oracle 9i Database, and Microsoft SQL Server.

Although most vendors experienced negative or single-digit growth, one notable exception was Microsoft, which ranked third overall with 16.3 percent of the DBMS market, but saw the greatest growth of all vendors, at 17.8 percent.

Gartner says the overall IT market slowdown made competition among DBMS vendors particularly fierce, and customers are sensitive to price-value proposition.