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Given recent maneuvers by proprietary database vendors, it is apparent that open source is having an impact on the database software market.
Two recent reports from major IT analysis firms IDC and Gartner (NYSE: IT) -- which actually adjusted its market measurement in part because of open source -- highlight the significance of that impact.
Both firms see open source databases such as MySQL challenging Oracle (Nasdaq: ORCL) and IBM (NYSE: IBM), not only on the free software licensing and price advantage, but also on functionality.
Fundamental Shift
Oracle and IBM are responding aggressively with their own versions of free and open source databases, and Microsoft (Nasdaq: MSFT) continues to cash in on its SQL Server 2005. However, IDC and Gartner forecast fundamental changes in the database market thanks to MySQL, PostgreSQL, Sleepycat's Berkeley DB and other open source databases that were in the space first.
"Alternatives such as the open source relational database management systems (RDBMS) vendor MySQL are also attracting a good deal 
of attention and loyalty from a new generation of database developers," said IDC Research Vice President George Weiss in a report on the 2005 RDBMS market. "IDC believes these open source vendors could ultimately spur a fundamental change in the way that RDBMS products are priced and licensed."
More Than Open Source
Although he sees his own business growing rapidly with the "service oriented architecture (SOA)/Web 2.0 market" while the "old client/server-like" database market declines, MySQL Chief Executive Officer Marten Mickos told LinuxInsider that open source is only part of the reason for changes.
"In the open source world, we are always flattered when changes are attributed to open source," he said. "But the enormous price pressure and the desire among customers to get away from licensing fees is self-inflicted and not a result of open source. Open source just happens to be the perfect answer to the cry."
There is a fundamental shift in the database software market that indeed should be attributed to open source, Mickos continued, explaining that the open source players such as MySQL had expanded use of relational databases to a much broader audience that previously thought it could not afford the technology.
Measurement Adjusted
Changes in the market, including the use of open source databases free of licensing fees, were also the basis for a change in measurement approach from IT analysis giant Gartner, Principal Analyst Colleen Graham told LinuxInsider.
"I would say that we changed our methodology to more accurately represent the entire market and account for the emergence of things like open source software, but also things like new buyer consumption models, such as hosted and subscription offerings," she said.
Gartner said while its software research had traditionally measured database market share in terms of new license revenue, it would now be basing its analysis on total software revenue, including revenue form new licenses, updates, subscriptions and hosting, technical support and maintenance.
Gartner's adjustment makes perfect sense, since database software license revenue is a dying business, according to Mickos.
"The value of software is measured in its ability to serve you over several years, and that's why annually recurring payments should be included in the study," he said.
It is also useful that software analysts are now paying attention to the install base, which is not necessarily revenue, but is typically a sign of market share changes about to occur, Mickos added.
Freedom and Function
Five years ago, open source databases were largely a free or inexpensive and flexible alternative to the advanced, more expensive enterprise databases, Oracle and IBM DB2. Today, Oracle and IBM have reached out to a wider audience with their own versions of free and open source databases.
Nevertheless, the open source databases have improved in functionality, and now boast support from database tools vendors, according to Gartner's Graham.
Improvements in functionality and scalability -- such as MySQL's version 5.0 last year that began providing support for stored procedures, triggers, views and distributed transactions -- are being complemented by developer and database administrator (DBA) tools for migration and remote management, she said.
"In terms of tool vendors' support, last fall Embarcadero began offering MySQL support in DBArtisan, a DBA tool for managing multiple databases from different vendors," Graham said. "Also, backup and archiving vendors like CA (NYSE: CA) have put together offerings that support MySQL."
Microsoft Moving Too
IDC reported about 9.5 percent growth in the US$14.6 billion RDBMS market last year, with Microsoft, Oracle, IBM and open source databases all enjoying "steady growth."
Gartner reported 8.3 percent growth for the same period with a 2005 RDBMS market valued at $13.8 billion.
Both firms highlighted the strong demand and growth for Microsoft's SQL 2005 database, which may not have grown as much as its collection of open source competitors, but certainly raked in more dollars than they did.
"Open source software vendors saw a combined growth rate of 47 percent compared to Microsoft's 17 percent growth," Graham said. "However, the OSS DBMS vendors grew at that rate on a base of less than $100 million, whereas Microsoft's growth was on a base of $1.7 billion. So frankly, any comparison between the two needs to contain that caveat."
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