Oracle Will Use MySQL to Take Share From Microsoft

Includes: IBM, MSFT, ORCL
by: Trefis

Oracle (NASDAQ:ORCL) competes with Microsoft’s (NASDAQ:MSFT) SQL Server, IBM’s (NYSE:IBM) DB2 and Sybase (acquired by SAP) in the database software market. SQL Server and MySQL cater mainly to the small and medium businesses (SMBs), a market where Oracle has traditionally struggled to gain a presence.

In a previous article, we explained how MySQL adds only slight incremental value to Oracle. Below we highlight how Oracle will leverage MySQL to try to take share from Microsoft and what it could mean for the stocks of both Oracle and Microsoft.

Large Microsoft Presence Amongst Small and Medium Businesses

We estimate that Microsoft will have about 22% market share in 2010 within the global database market. Microsoft has a large presence in the SMB space where it competes with MySQL. In comparison, Oracle-branded databases are targeted mainly at large enterprises and Oracle has little presence in SMB space.

MySQL is used in about 20% of database installations worldwide even though MySQL’s share of global database revenues is less than 1%. MySQL lacks a few data related security features and real-time data back-up functions that are available in Microsoft’s SQL Server and valued by some SMB customers.

Oracle is expected to increase its investment in MySQL and improve MySQL security related features. We believe MySQL is an opportunity for Oracle to have greater influence in the SMB space and gain market share at the expense of Microsoft.

You can modify our forecasts for Oracle’s database market share and Microsoft’s database market share below to see how the stocks of Oracle and Microsoft could be impacted if Oracle’s MySQL were to gain share at the expense of Microsoft.

Disclosure: No positions