But unlike previous competitive cycles, this time around the entrenched suppliers are eyeing the threat posed by a growing number of open-source alternatives, particularly on the low end.
Market leader Oracle fired its latest salvo on Monday when it released Oracle 10g release 2, an upgrade to its "grid" database that adds better security and management.
IBM's response is code-named Viper, the next major edition of its DB2 database, due in the second half of next year.
The company intends to begin an "open beta" program in August or September for Viper, which is now being tested with a small number of customers, according to an IBM representative.
Meanwhile, Microsoft will make its delayed SQL Server 2005 database generally available on Nov. 7.
Combined, Oracle, IBM and Microsoft last year garnered more than three-quarters of the dollars spent on corporate databases, according to market researcher IDC.
But despite the big three's commanding presence, several upstart database companies are making a go at the relational database industry, counting on open-source products and business models to lure away customers.
Open-source database company MySQL reports that its revenue doubled last year, to about $25 million. Meanwhile, since the beginning of this year three companies--Pervasive Software, EnterpriseDB and GreenPlum--have launched commercial database businesses around the PostgreSQL open-source database.
Locked up?
The entrenched players are not suffering massive revenue loss to these open-source start-ups. Oracle, in fact, highlighted database and database add-on sales in its strong fourth-quarter earnings report last month.
But the effects of open-source pricing and products are already being felt, according to Noel Yuhanna, an analyst at Forrester Research.
"The pressure is on and is starting to build up," Yuhanna said. Established database vendors "will be lowering prices in large deals, probably offering more discounts just from the pressure of open source."
Typically, open-source companies charge corporate customers for support or installation services, rather than for a traditional up-front software license. This pricing model lets open-source incomers undercut entrenched providers, according to executives at open-source database companies.
"We think the market is so mature, and frankly the products so overpriced and complex, it really is a market," said Andy Astor, CEO of EnterpriseDB, which launched in May.
On the product side, Oracle, IBM and Microsoft are trying to stay well ahead of open-source alternatives.
Commercial open-source databases are typically used for smaller-scale applications rather than complex, transaction-intensive applications. Open-source providers, in general, are focused on building and supporting commonly used features, such as stored procedures, already in proprietary databases.
To combat open-source databases, established database vendors in the past year have dropped prices for their low-end editions. And they are adding advanced features, including support for XML and better integration with third-party applications and development tools.
One of the major planned features for Viper is the ability to store and index XML documents natively, rather than having to reformat, or "shred," XML documents into a relational database. Viper will have a feature called range partitioning, which is designed to let programmers write more specific, and faster, database queries.
IBM also announced on Tuesday the availability of ZendCore for IBM, developer software designed to make it easier to write PHP Web applications that tap into IBM's DB2 Universal Database or Cloudscape Java database.
Oracle, too, has a similar partnership with PHP toolmaker Zend Technologies to better support the PHP scripting language with Oracle databases. On Tuesday, it released Oracle Developer Tools for Visual Studio .Net 2003, an add-on to Microsoft's flagship development tool to improve integration with Oracle databases.
The challenge for the leading database companies is that many of advanced features of proprietary databases go unused, said Forrester's Yuhanna. In a survey, Forrester found that 85 percent of corporate customers use only 30 percent of enterprise features.
As a result, the leading database vendors should hone in on lowering the cost of owning databases, Yuhanna said. Features that automate many tasks and allow a database administrator to manage many servers help set established databases apart from open-source providers.
"Open-source databases are far and away more focused on delivering goods to market, but the big three have exhausted the list of features and are now looking at more automated, simpler and easier to manage databases," he said.
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