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July 5, 1990

PALMY DAYS ARE OVER FOR THIRD PARTY RELATIONAL DATABASE FIRMS: NOW IT’S SUPPORT OR DIE

By CBR Staff Writer

Database vendors are suffering from the growing pressure of a more demanding marketplace, according to Computer Systems News, at a time when they are most strapped for cash. The era when users were awed by relational databases is over, and as they exploit their software to the full, they are demanding greater support and service from the likes of Oracle Corp and Sybase Inc. However, the vendors are also subject to pressures from DEC and IBM as they push their own offerings and bundle database engines under Unix. The general expectation is that market consolidation will continue, and the number of players will fall. But few observers believe that will happen overnight, and in the interim, companies will focus on service, applications and tools. Support is begining to assume the same importance as technology and benchmarks, and this is illustrated by Sybase’s acquisition of SQL Solutions to provide consultancy and other services being demanded by users. Vendors are begining to broaden their range of products and support by forming partnerships, and equity exchanges are regarded as more stable than co-development agreements. There are question marks over alliances with hardware vendors since many users feel that database software is just a marketing activity for them. Nonetheless, the trend towards service is having an impact, and Oracle now derives less than half its revenue from database engines. The situation is compounded by the development of a standard for SQL interoperability, which means that compliant databases will eventually look the same. Consequently, the opportunities for product differentiation will be reduced, and consolidation seems increasingly likely.

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