Yesterday Forbes Magazine ran the following headline: Oracle Secures Top Spot In Database Market. But the Oracle's (NYSE:ORCL) apparent strength was partly due to a change in research firm Gartner’s methodology.
On Thursday, Gartner published its 2005 RDBMS market share study, the first in which the firm changed its methodology for tracking market share, now using total software revenue instead of new license revenue.
According to the firm, new license is not a true indicator of vendors’ performances due to changes in business models, whereby companies may generate a significant amount of maintenance and support revenue.
“Oracle is the biggest beneficiary of this change in methodology as it generates a significant amount of maintenance upgrade revenues as compared with other vendors,” wrote UBS analyst Heather Bellini in a report.
According to the Gartner study, Oracle (nasdaq: ORCL - news - people ) enjoys about 50% of the total RDBMS market and 55% on distributed systems. Both IBM (nyse: IBM - news - people ) and Oracle posted similar year-over-year growth in their database businesses in 2005, with Oracle growing slightly faster than IBM.
The biggest threat to Oracle’s dominance of the market could be open-source competitors like MySQL, analysts said. Acceptance of open-source software could change the way pricing and licensing is determined for RDBMS products, upsetting the status quo.
A Gartner analyst (pointed) out that even though open-source software sellers like MySQL and Ingres did only made up less than 1 percent of the database systems software market in 2005, they showed a strong 47 percent growth.
ORCL 1-yr chart: