Analyst Firms Say IBM is Low-Cost Database Leader

Recent reports by two leading independent research firms note that companies running IBM's DB2 database have a lower total cost of ownership (TCO) -- as much as 52 percent -- than companies that run on competing technology from archrival Oracle.

According to the reports, a growing concern for many companies is the total cost of acquiring and managing the technologies needed to run their e-infrastructure. Driven by e-business, databases play an important role in the foundation of these business environments.

The reports, issued by D.H. Brown Associates and Yevich Lawson & Associates, evaluated IBM's DB2 and Oracle8i databases in various factors that impact TCO, including: database administrator (DBA) efficiencies, manageability, performance and pricing. Both firms found that over a five year period, customer costs were drastically lower for IBM in each category. One of the greatest price advantages was Web-based data management, where Oracle's mandatory unlimited user licens e policy cost companies three to five times that of IBM's processor based pricing model.

"After evaluating both IBM and Oracle databases, we found that DB2 offered the best price and performance features and provided easier maintenance for our licensing application," said Kurt Wood, Programmer Analyst Supervisor, State of Minnesota, Department of Agriculture. "IBM had the most straightforward pricing model and was less than one-third the price of Oracle. Had we not gone with IBM, we would have had to hire a full time database administrator. That equals enormous savings for us especially in a time when we are asked to do more with less."

D.H. Brown Associates

The D.H. Brown report, "DB2 vs. Oracle8i: Total Cost of Ownership," December 2000, presented hypothetical scenarios for Web based data management, data warehousing and online transaction processing (OLTP). In each scenario, IBM's five-year TCO advantage ranged from 52 percent to 81 percent as compared to Oracle.

The report stated that since Oracle recently unbundled its webDB product (now called Oracle8i Portal) from Oracle8i, DBAs no longer have the fundamental capabilities for Web deployment. As a result, the cost of Oracle9i Application Server is added to the base price of Oracle8i. By comparison, DB2 bundles WebSphere Application Server at no additional charge, providing customers with, in some cases, as much as an 80 percent price advantage for Internet-related applications running on a 500MHz system.

IBM's skills efficiencies were also prominently featured in the D.H. Brown report. DB2 exceeded Oracle8i in areas of routine installation, query optimization and architecture for distributed databases. DB2 also provided a greater level of automation, shielding DBAs from technical complexity. This allows less experienced workers to perform many more tasks and enables end users to self-manage their DB2 queries to a greater degree than with Oracle8i. On average, the report found that DB2 provided an overall reduction in work effort by as much as 20 percent for Internet-enabled databases and 18 percent for data warehousing.

The report highlighted additional DB2 TCO advantages that might accrue under specific scenarios including:

• Transaction Processing: DB2 holds a TCO advantage of 52 percent versus Oracle 8i for a multi-terabyte OLTP application, the most traditional form of Internet-related database applications. For example, in a scenario of 2,200 users processing three million transactions per day on a 64-way server, the TCO for Oracle would be more than $6 million versus IBM's $3 million.
• Scalability: DB2's pricing structure offers considerable savings with its per-processor pricing model, making it more economical for customers as their business grows. For example, when the number of users installed on a single 500 MHz machine is doubled, DB2 costs 55 percent of an ever-increasing Oracle8i cost.
• Per-processor pricing: DB2 uses a straightforward per-processor pricing model. Oracle charges steep licence fees for unlimited users, does not distinguish between full time and occasional users and enforces a minimum per user policy. Customers must pay full price for users who just log on once or twice a week.

Yevich, Lawson & Associates

A similar report by Yevich, Lawson & Associates, "DB2 Universal Database and Total Cost of Ownership," October 2000, measured factors that impact TCO including database tuning requirements, scalability capabilities and overall costs.

"IBM hits on all the key issues that customers are looking for today in managing their database expenses and efficiently running their e-business environments," said Richard Winter, Principal Consultant, Yevich, Lawson & Associates. "DB2 also sweetens the pot by integrating products for business intelligence, mainframe connectivity and Internet support into the base price and is still three to fives times less expensive than Oracle8i."

The report stated that IBM delivers the world's best optimization technology, enabling DBAs to be more productive and spend less time tuning SQL statements as Oracle DBA's typically must do. In five separate customer engagements, DB2 applications required database tuning in only seven percent of medium or complex queries compared to 62 percent for Oracle. Since tuning typically requires two man-hours per query, the savings in a medium-sized application of 1,000 queries for DB2 would be 1,060 hours -- the cost of one and a half DBAs per year.

According to the report, one customer using Oracle stated that approximately 60 percent of their developers' time is spent writing and optimizing SQL, while the other 40 percent is spent doing real Oracle DBA work.

Additional benefits of DB2 included:

• Open Standards: IBM DB2 was the first database to embrace Java support and XML standards. Unlike Oracle8i, DB2 is based on SQL-based stored procedures. This enables DB2 to work with competing database products.
• Support and Maintenance: Oracle charges one of the highest support and maintenance costs in the industry. Annual basis support costs start at 22 percent of its list price.
• Performance: Oracle's terms and conditions do not allow customers to discuss the performance of its database. This has created a restricted environment where only Oracle-approved benchmarks or performance measurements are available for comparison. DB2 has no such restrictions in its license terms.

According to Gartner Dataquest, IBM and Oracle are going head-to-head for database leadership. In 1999, the database market reached $8 billion, up 18 percent from 1998, and is expected to reach $12.7 billion by 2004. According to Gartner Dataquest IBM and Oracle each hold about 30 percent of the database market.

More than 40 million people from more than 300,000 companies worldwide rely on IBM data management technology. For additional information on IBM's data management portfolio, visit www.software.ibm.com/data.

Contact IBM Lori Bosio, 914-766-1408, bosiol@us.ibm.com.