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Database Competition Heats Up

2010, Laura's Insights ITIC Blog, News / By

The database market will see lots of activity during the 2010-2011 timeframe as nearly 60% of organizations move to upgrade or expand existing and legacy networks.
That statistic comes from new ITIC survey data, which polled 450 organizations worldwide. Not surprisingly the survey shows that longtime market leaders Oracle, IBM, Microsoft and Sybase will continue to dominate the DBMS market and solidify their positions.
Databases are among the most mature and crucial applications in the entire network infrastructure. Database information is the lifeblood of the business. Databases directly influence and impact every aspect of the organization’s daily operations including: relationships with customers, business partners, suppliers and the organization’s own internal end-users. All of these users must have the ability to locate and access data quickly, efficiently and securely. The corporate database must deliver optimal performance, reliability, security, business intelligence and ease of use. It must also incorporate flexible, advanced management capabilities to enable database administrators (DBAs) to construct and oversee a database management system (DBMS) that best suits the organization from both a technology and business perspective.
What will distinguish the DBMS market this year is that the always intense and vociferous vendor rivalries will heat up even more over the next 12 months.
There are several pragmatic reasons for this. Most notable is the fact that many organizations deferred all but the most pressing network upgrade projects during the severe downturn over the past two-and-a-half years. Many businesses are now in a position where they must upgrade their legacy database infrastructure because it’s obsolete and is adversely impacting or will shortly impact the business. Anytime a company decides on a major upgrade there’s always a chance, that they may switch providers. The DBMS vendors know this and will do their level best to lure customers to their platform, or at the very least get a foot in the door.
Another factor that looms large in the 2010 DBMS market dynamics is Oracle’s purchase of Sun Microsystems. That acquisition finally got the green light from the European Commission last month. Speculation abounds as to the fate of the MySQL, which is a popular and highly regarded Open Source DBMS. For the record, Oracle executives stated publicly within the last two weeks that it will continue to support and develop MySQL and even provide integration with other Oracle offerings. But users are uneasy because MySQL does compete to some extent with some Oracle products. Expect rivals, particularly IBM and Microsoft, to aggressively capitalize on user confusion and fear to entice users to their respective platforms.
The DBMS Vendor Landscape
As nearly everyone knows, the four major DBMS vendors: Oracle, IBM, Microsoft and Sybase account for 90% of the installed base, unit shipments and revenue.
Oracle’s 11g is the undisputed market leader. It offers a full slate of online transactional processing (OLTP) as well as specialized database applications. As such it is being assailed from all sides and with relish by rivals who take every opportunity to criticize its’ products and strategy. Oracle, headed by Larry Ellison one of the most visible and outspoken high technology CEOs, happily reciprocates with its own vitriol.
IBM’s DB2 9.5 for Linux, Windows and UNIX remains firmly entrenched in high end enterprises owing to its rock solid reliability, performance, management, scalability and overall data and application integration capabilities. Users are also loyal to the DB2 platform because of IBM’s strong after-market technical service and support offerings. IBM also secures its position within very large enterprises by giving good deals and discounts on licensing renewals and training and support.
Microsoft’s SQL Server 2008 has shown tremendous improvement in scalability, security, ease of use, programmability and application development functionality and is gaining ground particularly among SMB and SME organizations. Microsoft hopes that the increased functionality of SQL Server 2008 will enable it to erode Oracle’s very entrenched presence among enterprises. A big plus for Microsoft is its legion of committed resellers and consultants who do an excellent job of promoting SQL Server 2008 among SMBs and SMEs.
Cost, Interoperability and Performance Top User DBMS Requirements
DBMS upgrades and new installations will be fought, won and/or lost according to three main factors: they are interoperability, cost and performance/features. The latest ITIC survey data found that nearly 90% rated interoperability with existing or planned infrastructure as the most important factor weighed when choosing a server vendor; 80% chose cost as a main DBMS influencer and 78% cited performance as their main reason for choosing a specific DBMS vendor platform.
But any DBMS vendor that hopes to dislodge or supplant a rival in an existing account will have to work hard to do so. The ITIC survey data also shows that organizations – especially large enterprises – do not readily or often forsake their legacy platforms. According to the survey data, 76% of survey respondents indicated they have not migrated or switched any of their main line of business applications from one database platform to another within the past three years.
This statistic makes a lot of sense. Precisely because DBMS platforms are among the most mature server-based applications in the entire enterprise, it’s much more work to rip out one platform and start fresh. A wholesale switch from one platform to another requires significant capital expenditure monies. Additionally, the business must also invest a lot of time and energy in converting to a new platform, testing new applications, rewriting scripts and re-training DBAs and getting them certified on the new environment. For CIOs, CTOs and IT departments this prospect has roughly the same appeal as having root canal without Novocain.
Nonetheless, one-in-five survey respondents – 20% — did migrate database platforms over the past three years. The most popular reasons for switching DBMS platforms, according to the survey respondents is a move to a custom developed in-house application a customized application developed by a partner. Just over half – 53% — of responding organizations that changed DBMS platforms came from midsized enterprises with 500 to 3,000 end users – a fact that favored Microsoft SQL Server 2008 deployments. Among the 20% of ITIC survey respondents that switched vendors, fully 50% of organizations swapped out Oracle in favor of SQL Server, while 17% migrated from Sybase to SQL Server. Overall, among the 20% of respondents that switched database platforms over the past three years, two-thirds or 67% opted to migrate to SQL Server. In this regard, Microsoft SQL Server converts outpaced rival Oracle by a 2-to-1 margin. Approximately 34% of the 20% of businesses that changed database platforms migrated away from DB2 or SQL Server in favor of Oracle.
IBM DB2 users were among the most satisfied respondents; an overwhelming 96% stayed put.
Analysis: Customer Issues and Chief Challenges
Respondents cite challenges with their database strategies, but are also sanguine about the journey. For instance, one respondent said that the main challenges were “keeping up with changes to the SQL platform and getting our database administrators and appropriate IT managers trained and re-certified on new versions of the technology and then figuring out how it all works with new virtualization and cloud computing technologies. Cost and complexity are also big factors to consider in any upgrade. Networks are getting more complex but our budgets and training are not keeping pace.”
Respondents were particularly focused on the cost issue: “cost, both new licensing and annual maintenance”, “increasing cost of licensing”, “cost is the overriding factor” were just some of the responses.
As for future plans, a 56% majority of respondents report that switching database platforms in the coming months is very unlikely; while 17% said it is not an option to switch and 15% said that switching is a possibility, depending on the circumstances.
Getting organizations to change DBMS platforms is difficult but not impossible. If a rival vendor can offer concomitant performance and functionality, coupled with tangibly better pricing and licensing renewal options which lower Total Cost of Ownership (TCO) and speed Return on Investment (ROI), organizations may be induced to make the switch. The biggest DBMS battle is in the SMB, SME sectors and green field accounts that are adding new databases.
DBMS vendors are anxious to keep the current customers and gain new ones. End users should make the vendors work to keep them as satisfied customers. Dissatisfied customers should voice their concerns and even satisfied customers should let their vendors know what they can do to make them even happier.

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ITIC 2009-2010 Global Virtualization Deployment Trends Survey Results

ITIC Reports & Surveys / By

Server virtualization demand and deployments are strong and will remain so for the remainder of 2009 and through 2010, despite the ongoing economic downturn.

The results of the new, independent ITIC 2009 Global Server Virtualization Survey, which polled more than 700 corporations worldwide during May/June and August, reveal that server virtualization deployments have remained strong throughout the ongoing 2009 economic downturn. It also shows that the three market leaders Citrix, Microsoft and VMware, are consolidating their positions even as the virtualization arena itself consolidates through mergers, acquisitions and partnerships.

Microsoft in particular has made big year-over-year gains in deployments and market share. Thanks to the summer release of the new Hyper-V 2.0 with live migration capabilities  the Redmond, Washington software firm has substantially closed the feature/performance gap between itself and VMware’s ESX Server.  The technical advances of Hyper-V combined with the excellent conditions of Microsoft’s licensing program, make the company’s virtualization products very competitive and alluring. Three out of five — 59% of the survey respondents — indicated their intent to deploy Hyper-V 2.0 within the next 12 to 18 months.

Survey responses also show a groundswell of support for application and desktop virtualization deployments. These two market segments constitute a much smaller niche of deployments and installations compared to virtualized server environments. The survey results show that application virtualization (where Microsoft is the market leader) and desktop virtualization (in which Citrix is the market leader), are both poised for significant growth in the 2010 timeframe.

Another key survey revelation was that 40% of respondents, especially businesses with 500 or more end users, said they either have or plan to install virtualization products from multiple vendors. This will place more emphasis and importance on integration, interoperability, management and third-party add-on tools to support these more complex, heterogeneous virtualization environments.

Among the other key survey highlights:

  • The “Big Three,” Citrix, Microsoft and VMware, are bolstering their positions with a slew of new offerings and a plethora of partnerships due out in the 2009 summer and fall.
  • Partnerships and Alliances: The alliance between Citrix and Microsoft remains robust as these two firms believe that there’s strength in numbers, as they mount a challenge to server virtualization leader VMware’s continuing dominance.
  • Microsoft Hyper-V Closes the Gap: Microsoft made big year-over-year market share gains from 2008 to 2009. The survey data shows current Hyper-V usage at 32%; but 59% plan to adopt in next 12 to 18 months.
  • VMware remains the market leader in server virtualization with approximately 50% share among enterprise users; Microsoft follows with 26% share.
  • Microsoft is the current market leader in application virtualization with a 15% share; followed by Citrix with 11% and VMware with 7%. However, nearly two-thirds of businesses have not yet deployed application virtualization.
  • Citrix is the market leader in desktop virtualization with a 19% market share followed by Microsoft with 15% and VMware with 8%. But again, over 60% of corporations have not yet begun to virtualize their desktop environments.
  • Mergers and Acquisitions Raise Questions: There is confusion among the legacy Sun and Virtual Iron users as to what will happen to both the product lines and technical support in the wake of both firms’ acquisition by Oracle.
  • Apple Mac is a popular virtualization platform; nearly 30% of respondents said they use Mac hardware in conjunction with Windows operating systems to virtualize their server and desktop environments.
  • Parallels and VMware Fusion are the two leading Mac virtualization vendors with a near 50/50 split market share.
  • Time to Bargain: Despite budget cuts and reduced resources only a very small percentage of companies — 7% — have attempted to renegotiate their virtualization licensing contracts to get lower prices and better deals.
  • Server Virtualization Lowers TCO: Almost 50% of survey respondents reported that server virtualization lets them lower their total cost of ownership (TCO) and achieve faster return on investment (ROI); however, only 25% of businesses could quantify the actual monetary cost savings
  • Users Prefer Terra Firma Virtualization to Cloud: Users are moving slowly with respect to public cloud computing migrations, which are heavily dependent on virtualization technology. To date, only 14% of survey respondents said they will move their data to a virtualized public cloud within the next six-to-12 months.

This survey identifies the trends that propel or impede server, application and desktop virtualization deployments and to elucidate the timeframes in which corporations plan to virtualize their environments. ITIC advises all businesses, irrespective of size or vertical market to conduct due diligence to determine which virtualization solution or combination of products best meets their technical and business needs in advance of any migration. And in light of the ongoing economic downturn, businesses are well advised to negotiate hard with their vendors for the best deals and to ensure that the appropriate IT managers receive the necessary training and certification to ensure a smooth, trouble-free virtualization upgrade. This will enable the business to lower TCO, accelerate ROI and minimize and mitigate risk to an acceptable level.

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Apple Shines

Laura's Insights ITIC Blog / By

Apple rang in 2009 by celebrating a trio of milestones that were impressive by any standards including those of a company whose 32-year span has been filled with a cornucopia of noteworthy events. In quick succession, Apple posted the best financial results in its history: during the just ended 2009 first fiscal quarter it achieved record revenues of nearly $10.2 billion on record net quarterly profits of $1.61 billion and it sold an astounding 22.7 million iPods, another record. The icing on the cake: Apple’s flagship Mac computer celebrated its 25th birthday amidst the news that the Cupertino, California firm’s latest Mac Book and Mac Book Pro notebooks contributed to the overall financial bonanza with sales of 2.5 million units; a 34% gain in year-over-year unit shipments.

These feats would be extraordinary at any time but they offered even more cause for celebration due to their arrival during a week in which the news from almost all of Apple’s high-tech vendor counterparts ranged from disappointing to dismal to downright dire. Intel said it would shed up to 6,000 workers and close five manufacturing plants; Microsoft announced it will lay off 5,000 workers (the first such major action in its history) amidst declining demand for Windows PC solutions, and even the goliath Google saw a sharp decline in its 2009 first fiscal quarter profits.

With such a bountiful harvest, it was more than a little perplexing to read the headline in the January 22 issue of Silicon Valley.com column proclaiming: “Mac’s influence could wane.” Granted, the headline was a bit misleading. The article itself stated that things look good for Apple and its Macs in the near term, but what about the next 25 years? Good question.

Long term forecasts of even five years are more art or guesswork than science. But decades long prognostications are rarities unless you’re talking about Nostradamus or the Oracle of Delphi. So we’re left to forecast with the tools at our disposal – in this case, the facts. So here for your consideration is our Top 10 List concerning Apple’s health and well-being. It includes some little known facts of both a positive and even potentially negative nature.

10. Big Mac sales shrink. Apple Mac desktop sales dipped slightly even as sales of its notebooks and the lightweight Apple Mac Book Air soared. This is hardly surprising. Both the American and global consumers and workforces are becoming increasingly mobile, transitioning into an era of ever-more powerful notebooks, Netbooks (or minis) and PDAs. Critics argue that the commoditization of PC hardware will make it difficult for Apple or any hardware vendor to distinguish itself. As a result, Apple desktop sales may continue to contract along with those of PCs although they won’t become obsolete for many years. Meanwhile, Apple has a wide array of Mac Book, Mac Book Pro and the Mac Book Air products to take up the slack. The company also wisely cut hardware and OS X 10.x operating system prices to be more competitive with PCs.

9. iPod and iPhone. Apple sold a record 22.7 million iPods during the quarter, and the device has approximately 70% market share in the U.S. Worldwide market share percentages vary by country from 70% in Western Europe and Australia to well over 60% in Japan and over 50% in Canada. At the same time, iPhone sales in Q1 were 4.36 units million, representing 88% unit growth over the year-ago quarter. At some point, iPod and iPhone sales may reach saturation but that won’t happen anytime soon and when it does, Apple will most likely have another device in the offing.

8. Up, up and away. Data is no longer tied to the PC or desktop, it is moving to the cloud. Apple is right there in the cloud. Cloud computing is the new buzz word for delivering applications as services via the Internet. The first fruits of Apple’s cloud computing initiative involves the integration of Google’s cloud computing offering, the Google App Engine with Apple’s iPhone mobile computing platform. ITIC anticipates Apple will expand its reach into the cloud, again based on customer demand. Nearly half – 49% of the ITIC/Sunbelt Software survey respondents said they plan to increase integration between existing Apple consumer products like the iPhone to allow corporate users to access corporate Email and other applications over the next 12 months.

7. Marketing. No one does it better. From the moment that Steve Jobs stepped onstage 25 years ago and unveiled his 20lb. baby, to the creative licensing of the Rolling Stones tune “Like a Rainbow”, to partnering with the Irish rock group U2 to help promote iPod usage, Apple’s marketing has always been stellar. Apple uses every available channel – from the airwaves to the street – to promote its brand. There are now 251 Apple retail stores open in 10 countries, with total quarterly traffic of 46.7 million visitors.

6. New gadgets. Users and industry watchers have grown accustomed to Apple debuting revolutionary new products at MacWorld and they disappointed when it doesn’t happen. It is unrealistic to expect that any company, even one as inventive as Apple, can deliver a iPod or iPhone every year. Meanwhile, users will have to “settle” for evolutionary innovations like new laptop batteries that will run for eight hours without re-charging and Time Capsule, an all-in-one 802.11n wireless backup router that includes up to 1 terabyte of disk storage.

5. Leadership. It’s impossible to overstate or understate what company founder Steve Jobs has meant to Apple. His 1996 return to Apple sparked one of the greatest corporate revivals since Lazarus. An iconic figure in Silicon Valley for over 30 years, Jobs’ future is now clouded by health concerns, and investors and industry watchers are rightly nervous. Only time will tell when or if Jobs will return. If he does not, it will be a devastating loss on many levels but it will not cripple the company’s ability to thrive and survive. Still, Apple must allay customer, investor and government concerns by being truthful and forthcoming regarding Jobs and the company’s future.

4. What’s in Apple’s Wallet? Cash — $28.1 billion to be exact and $0 debt. That’s more than Google ($15.85B); Microsoft ($20.3B); IBM ($12.9B); Intel ($11.84B) or Sony ($6.05B). Apple also has double digit profit margins of 14.70% and operating margins of nearly 19%; return on assets is 10.77% while return on shareholders’ equity is a robust 24.47%. Few if any corporations can boast such a healthy balance sheet, which leaves Apple free to invest heavily in R&D, marketing initiatives and other efforts to keep ahead of competitors.

3. Apple is hot – and cool. Consumers have always loved Apple and there’s nothing to indicate that will change. Consumer enthusiasm for iPods and iPhones has fueled the resurgence of Macs and OS X 10.x in enterprises. Everyone it seems has or wishes they had an iPod or an iPhone. Beyond that the latest joint ITIC/Sunbelt Software data indicates that Apple is increasing its presence in many markets thanks to the performance and reliability of the core products. Eight out of 10 businesses – 82% of the survey respondents – rated the reliability of the Mac and OS X 10.x as “excellent” or “very good,” while almost 70% of those polled gave the same high marks to the security of the Apple platform. Tellingly, 68% of the survey respondents said their firms are likely to allow more users to deploy Macs as their enterprise desktops in the next six-to-12 months.

2. Enterprising. Over the past three years Apple has made a comeback in the enterprise. The latest joint ITIC/Sunbelt Software survey of 700 companies worldwide indicates that nearly 80% of businesses have Macs in their environment and 25% have significant (>30) numbers of Macs. But while enterprise users love Apple, IT managers remain divided. The biggest drawback for the Mac is the dearth of enterprise-class third party management and performance enhancement tools but technical service and support is also an issue. Apple will have to address these points if the company expects or plans to challenge Microsoft’s dominance on business desktops. So far, Apple has been silent about its enterprise strategy but a new consortium of five third party vendors calling itself the Enterprise Desktop Alliance (EDA) is determined to promote the management, integration and interoperability capabilities of the Mac in corporate environments.

1. Mobile and agile, not fragile. The combination and plethora of Apple consumer and corporate devices makes for a powerful product portfolio with widespread appeal. Unlike many of its competitors Apple is not dependent on a single product or market segment. Hence, when sales decline in one sector, the slippage is offset by another product as we’ve seen with Mac notebooks picking up the slack for Mac desktops. This enables Apple to adjust both its technology plans and market focus accordingly, strengthening and insulating the company from cyclical downturns.

One of the hallmarks of Apple’s existence has been the ability to re-invent itself – not only changing with the times – but keeping its fingers on the pulse of an often fickle public and anticipating what its users and the industry wants. Apple is well positioned for both the near and intermediate term. It will have to stay focused, keep its edge and clearly communicate its strategy in order to maintain the same level of success it has achieved in the last 32 years.

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Microsoft Pulls Out all the Stops for SQL Server 2008

Laura's Insights ITIC Blog / By

Microsoft is pulling out all the stops to support SQL Server 2008 and keep the momentum going for its latest enhanced database offering. On September 29, the company will launch the SQL Server 2008 Experience, a year-long series of in-person events designed to introduce “350,000+ customers, partners and community members” to the new features and benefits of its database offering.

Additionally, Microsoft is touting the merits of SQL Server 2008 on a new Website: http://www.moresqlserver.com. And it also just released the results of the new Transaction Processing Performance Council (TPC) performance benchmark tests for Microsoft SQL Server 2008. The TPC ranked Microsoft SQL Server 2008 #1 on price/performance on servers using Intel’s new Dunnington x64 processors, and as the top performance leader using IBM’s new System x3950 M2 server.

There’s no doubt that SQL Server 2008 boasts greatly improved features, functions, scalability, security, management and reliability compared to the 2005 version, and a more powerful, robust and manageable SQL Server 2008 is a must for Microsoft. The company is going head to head with industry powerhouses including IBM’s DB2 and Oracle’s 11g database running on Linux. So 2009 is shaping up to be an extremely competitive and crucial year for database vendors and their respective customers.

At this point, Microsoft is a strong number three behind Oracle and IBM in the database arena, according to both Gartner Group and IDC. The latest statistics show Oracle with approximately 42% market share; IBM second with about 21% and Microsoft with an estimated 19% of the database market. The financial stakes are also high: Oracle’s database revenue is well over $7 billion; IBM realizes close to $3.5 billion from database sales and Microsoft SQL Server generates close to $3 billion in annual sales.

In order to retain its existing installed base and increase its presence – particularly among SMBs and large enterprises, Microsoft must hit the ground running with SQL Server 2008. There is no margin for error from either a technical or a marketing standpoint. Hence, Microsoft is marshalling all its forces.

SQL Server 2008 incorporates a slew of new management capabilities such as: policy management; configuration servers; data collector/management warehouse and a multiple server query capability. Such features are crucial for database administrators, particularly those in large enterprises who are charged with overseeing complex and geographically dispersed database environments that may include hundreds or thousands of physical and virtual servers encompassing tens of thousands of databases.

The SQL Server 2008 Policy Management feature enables database administrators to create and execute configuration policies against one or more servers while the Data Collector facility obviates the need for managers to create custom solutions to cull data from their database server environments.

Data Collector lets administrators utilize the SQL Server Agent and SQL Server Integration Services (SSIS) to create a framework that collects and stores data while delivering a detailed history of error handling, auditing, and collection.

Just as important as SQL Server 2008’s new management functions are the accompanying documentation and training that Microsoft is making available for the database platform via its Website, TechNet and its Software Assurance maintenance and upgrade program. Vendor rivalries aside, the chief impediments to users upgrading to any new software platform are the cost and complexity of the migration. These factors are even more crucial when weighed against the cost constraints of the current economic downturn. Microsoft’s TechNet provides SQL Server 2008 customers with ample, “at-your-fingertips” documentation and troubleshooting tips as they prepare to upgrade.

In addition, customers who have purchased Microsoft’s Software Assurance will be able to get significant discounts on training as well as access to Elearning tools. The combination of TechNet and Software Assurance can save IT departments and the corporation untold thousands to millions in capital and operational expenditures and cut upgrade time by 25% to 65% depending on the size and scope of the deployment. And in the event that any significant bugs or performance glitches arise, Microsoft must move quickly and decisively to publicly address the problems and issue the necessary patches without dissembling or temporizing.

Overall, Microsoft has assembled all of the necessary technology and business components to make SQL Server 2008 a winner. The latest Microsoft database has the performance, scalability and management to make the upgrade path easy. The excellent documentation and technical support offered by TechNet is also a plus. Companies worried about budgetary constraints (and who isn’t?) will also find monetary relief from the inherent value of the myriad Software Assurance benefits.

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