Case Study: Databases - Signals of Change

In the last blog, I outlined a short history of the database industry for the three companies we're are going to use in this case study. Oracle (as the lead company), Microsoft SQLserver (as the second tier company) and MySQL as the disruptive company.

So where are the signals of changes in the database marketplace. Innovation theory and the impact of disruption theory suggest that when the leading companies overshoot on the performance demanded by customers that customers will start to value other things in the product. The primary phases being functionality, reliability, convenience and price.

Where are we at in the database lifecycle? I believe we are in the price phase.

Oracle has remained the leading database company through functionality, reliability phases.

In 1995 it was attacked by Microsoft SQLserver from below with the release of SQLserver 6.5 ,when customers started to value convenience.
SQLserver 6.5 was easily supported by DataBase Administrators (DBA) via a Graphical User Interface (GUI). This allowed companies to employ less skilled staff to look after databases compared to Oracle and its command line interface. The GUI tool allowed SQLserver DBAs to administrator more easily a larger number of databases.
I remember having to support both Oracle and SQLserver as a junior DBA and SQLserver was easier to support. Oracle provided more in-depth tools to support, however everything had to be done via a command line and you had to remember syntax and complex relationships to retrieve the correct information.

Oracle released in own version of Enterprise Manager (the GUI admin tool) in response to SQLserver, however Microsoft also attacked Oracle from a convenience value point by using its famous bundling strategy. Companies could choose Microsoft when they started and grow into the higher end products as they grew. So the company could start with Microsoft Access database, which was functionally limited and migrate to SQLserver when they required more functionality, better reliability and ease of use.

At the same time SQLserver was attacking Oracle from a convenience value point, some customers had already moved on to value price. The open source/freeware movement started to gather steam in the lead up to 2000. After the tech bubble burst in early 2000, plenty of struggling IT companies looked at slashing costs via the use of open source software. They would employ IT staff at a discount (due to the market slump) and rather than pay license fees and support fees get their own staff to support the product. The staff relying on search engines and online support forums to support the product, rather than dedicated support consultants (Oracle).
MySQL is a free database, which started with basic functionality and as subsequently added new features in its pursuit of the database leaders. It also has been able to pursue a bundling strategy as a partner product in the open source/freeware LAMP (Linux, Apache, MySQL, Php/Python/Perl) web application suite.

I believe we are in the price phase as the database leader, Oracle, has responded to the threat of MySQL taking the market share by releasing a free version of its database software Oracle Express in 2005. Whilst also buying one company Innodb which provided a more robust database file structure to MySQL.

Side Note: MySQL has actually broadened the total database marketplace. As customers who would have not used a database in the past have now been exposed to the benefits of using a database.

The threat to Microsoft from MySQL comes from the LAMP, as it attacked Oracle offering convenience at a lower price, so MySQL as part of the LAMP bundle as attacked Microsoft offering a lower price.

I will post some charts in the next blog. Please feel free to comment.

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