Robert, looks like more top line growth.
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Database Industry's Slump Exaggerated
Shawn Willett
Oracle's disappointing financial results do not necessarily mean the database industry is in the midst of a slump, analysts and industry executives said.
Rather, the industry could just be repositioning itself to new markets and new top players.
For one, many say Oracle's problems are unique. "Although the database market is not a 50 percent annual growth market, the market doesn't explain their results across the board, including applications. None of us has seen the big problems in Asia and telecommunications that Oracle claims," said Mitchell Kertzman, chairman of Sybase, in Emeryville, Calif.
During the past two quarters, Oracle's database sales have grown 6 percent and 3 percent, respectively. Along with Oracle, Sybase and Informix have not shown much growth during the past year. This has led many, including top industry executives, to conclude that database sales are slowing.
But both Microsoft and IBM are saying they have large sales growth in their databases. Microsoft said it earned 100 percent sales growth of its SQL Server year over year.
"It will be interesting to see if IBM shows some growth," said Merv Adrian, analyst at Giga Information Group, in Cambridge, Mass. "That would mean a realignment of the top players. IBM could be a No. 2."
Comparisons are difficult since neither Microsoft nor IBM breaks out its database sales in financial reports.
Also, Oracle and the other players have recorded strong growth in their Windows NT database sales. Since Unix databases generally are more expensive, some analysts said they think the market is just seeing the results of price pressure.
That would mean the major Unix RDBMS players would need to realign their business models to have lower margins.
According to a report issued by Morgan Stanley Dean Witter, Oracle management said it believes database sales could grow 20 percent to 25 percent during the next two to three quarters.
The report said the company believes a stock buy-back from Oracle is likely because of the current low stock price. In late-afternoon trading, Oracle's stock had fallen even further, down 1 to 22 7/16. |
