Rdbms Industry

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The RDBMS Industry: A NorthernCalifornia Perspective

Martin Campbell-KellyWarwick University

This article describes the origins and development of the relationaldatabase management systems (RDBMS) industry, focusing on thefirms IBM, Oracle, Ingres, Informix, and Sybase in the 1980s. Theauthor analyzes the industrys evolution in terms of the disruptivetechnology paradigm and regional economics and then broadlyoutlines the industrys later development.

In 1986 an industry analysts report esti-mated that there were some 200 firms inthe database industry, selling DBMS soft-ware, tools, and related products.1 The re-port also noted that the industry appearedto be on the cusp of change following IBMsannouncement of its DB2 relational databasesoftware product in 1983. It was clearly recog-nized that the relational database was a turn-ing point in the industrywhat would laterbe called a disruptive technology, a themeexplored here.

The report included detailed profiles of

43 significant firms both in the new RDBMSsector as well as what it termed the nonrela-tional holdouts. The profiles were primarilyof vendors of database software per se, butthey also included suppliers of complementaryproducts, such as so-called fourth-generationlanguages. The firms were mostly independentsoftware vendors, but there were also someleading manufacturers such as IBM, Bur-roughs, and DEC. The independent softwarevendors included long-established suppliersof the top-selling nonrelational products ofthe time: ADR, CCA, Cincom, Cullinet, and

Software AG.The vendor profiles also included a set ofrelatively new firms that were selling rela-tional database systems. The firms were: theOracle Corporation, Relational TechnologyInc. (later Ingres), and Relational DatabaseSystems Inc. (later Informix). A fourth com-pany, Unify, specialized in RDBMS tools. Allof these firms were located in Northern Cali-fornia. Another Northern California com-pany, Sybase, had been formed in 1984, butit had not yet appeared on the analystsradar. There were no other RDBMS company

profiles, apart from that of IBM. Evidently,the RDBMS industry had a strong regionalbasis, which is unusual in the software indus-try. Incidentally, the report also gave profilesof three suppliers of specialized processorsthat supported RDBMS applications: Britton-Lee, Teradata, and Intel. A fourth companyin the same line of business, Tandem, was in-explicably not profiled. It is noteworthy thatall of these manufacturers were also Califor-nia based, although a discussion of them isbeyond the scope of this article.

There is little literature on the business

history of the RDBMS industry. Indeed,there is little literature on any softwaregenrethe software industry is a massivelyunderstudied aspect of computer history. Inwriting this article, my sources have necessar-ily been the usual suspects: industry journals(primarily Datamationand Software News), in-complete sets of annual reports of individualfirms, and the only two analysts reports onthe database industry in the public domainthat I am aware of. In June 2007, the SoftwareIndustry Special Interest Group of the Com-puter History Museum organized a series of

workshops and interviews of pioneers focus-ing on the RDBMS industry. The key firmsthat participated were IBM, Oracle, Ingres,Informix, and Sybase. The transcripts of thesessions are important new sources that com-plement the existing literature. What thetranscripts reveal, far more than formal an-nual reports and cursory evaluations in thebusiness press, are corporate strategies and in-formation networks. The articles that followin two special issues of the Annals focus onthe stories of individual actors and firms.This article is an attempt to place these

18 IEEE Annals of the History of Computing 1058-6180/12/$31.00 c 2012 IEEEPublished by the IEEE Computer Society


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histories in the wider context of the softwareindustry in general and the RDBMS industryin particular.

RDBMS as a Disruptive TechnologyThe database industry was established in thelate 1960s with three main technologies: thehierarchical, network, and inverted models.

The differences between these technologiesare unimportant here, other than that theywere all relatively efficient but difficult tonavigate. Navigation referred to the necessityof a database administrator having to knowthe underlying structure of the database inorder to interrogate it. The importance ofnavigation was underscored by the title ofthe 1973 ACM Turing Award lecture byCharles Bachmann (the inventor of IDMS, ahierarchical/network database technology):The Programmer as Navigator.2

During the early 1970s, a major database

industry began to emerge. By the end of thedecade, shake-outs, mergers, acquisitions,and organic growth had resulted in lessthan a dozen major vendors remaining.According to a contemporary analysts report,in 1978 aggregate world sales of database soft-ware were on the order of $130 million.3

The three leading firms (products) wereIBM (IMS and DL/1), Cincom (Total),and Cullinane (IDMS), which had sales of$42, $27, and $14 million, respectivelyrepresenting about two-thirds of the market.Smaller, but still significant, players included

Software AG (Adabas), ADR (Datacom/DB),and CCA (Model 204). Altogether therewere approximately 10,000 database installa-tions. Individual vendors did not publishthe cost of individual packages becausethey tended to be priced on a what-the-customer-could-bear principle. Frost & Sulli-van reported prices as being upwards of

$250,000, with most selling for at leasttwice that amount and the largest $4 to$5 million.4

One way to view the impact of relationaltechnology on the database industry isthrough the lens of the disruptive technol-ogy paradigm of Clayton Christensen.5

Figure 1 shows, in a strictly qualitativemanner, the trajectories over time of con-ventional (nonrelational) and relationaldatabase technologies.

Databases have two principal uses: deci-sion support (DS) and online transaction pro-

cessing (OLTP). DS is the ability to make adhoc inquiries and produce analytical reports.For example, a bank might want to tabulatethe age-balance profile of its delinquentaccounts. Such a report (necessitating the in-terrogation of every customer record) woulddemand a great deal of processing, but itwas not time critical. It would be acceptableif the report generation took a few minutesor even many minutes.

By contrast, OLTP (now a little-used term)involved the real-time interrogation of indi-vidual records, with a response time of a

Figure 1. RDBMS as a disruptive technology in the 1970s. The dotted lines indicate the demands for

decision support (DS) and online transaction processing (OLTP). The positive slopes reveal the risingrequirements of customers applications over time. The solid lines show the respective performance

capabilities of conventional (nonrelational) and relational database technologies.

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few seconds at most. In the case of a bank, forexample, an OLTP transaction might beneeded to validate an ATM cash withdrawaland adjust the customers account balance.The ability to support many simultaneoustransactions was the most important anddemanding use of a database. In the 1970s,traditional database technology could sup-port hundreds of transactions per secondlater thousands and tens of thousands oftransactions per second became possible.

OLTP made much heavier computationaldemands on a database than DS (see the dot-ted lines in Figure 1). The positive slopes sug-gest the rising requirements of customersapplications over timethat is, the need toperform DS over larger datasets and to sup-port an increasing number of OLTP transac-tions per second, respectively. The uppersolid line in Figure 1 indicates the per-formance of the nonrelational databases,which were capable of both DS and OLTPapplications and were improving pari passuwith computer performance. The lowersolid line shows the inferior capabilities ofthe relational databases.6

The first experimental relational databasesystems appeared between 1973 and 1975.Relational technology offered a much sim-pler, nonnavigational method of interrogat-ing the database using a system such as SQL(Structured Query Language). There were

also benefits in data integrity from eliminat-ing the possibility of inconsistent or dupli-cate records in the database. These benefitscame at the cost of much higher computingresource consumption than the traditionaldatabase. The performance over time of anRDBMS (see the lower solid line in Figure 1)shows that relational technology could sup-port DS adequately in the mid-1970s, but itcould not realistically support OLTP. How-ever, because computer technology wasimproving faster than the demands of cus-tomers, there would eventually come a time

when relational technology could supportboth.For existing database users in the early

1970s, however, the only benefit of anRDBMS was in query formation and data in-tegrity. Neither of these benefits was greatlyneeded by existing users because they weregenerally large firms running major businessprocesses with traditional products; theyhad expert staffs who could cope with thenavigational aspects of database usage andhad the technical expertise to manage dataintegrity. More to the point, relational

technology could not in practice have sup-ported their OLTP operations. Therefore, forincumbent firms in the traditional DBMS in-dustry selling nonrelational products, a radi-cal switch to relational technology wouldhave meant destroying their investments incode and compromising their revenue streamin order to provide a product that was lesssatisfactory for their customers. Moreover,overcoming the complexity of using tradi-tional databases generated an importantadditional income stream for vendors fromconsultancy, custom programming, andtraining.

Hence, existing vendors and customershad no motive to respond to relational tech-nology in the mid-1970s. It is important torecognize these were rational decisionsmade by all the leading incumbents. Onlyin hindsight do they appear to have beenblind to the opportunity. This is the natureof a disruptive technology. To take one ex-ample, although IBM was the market leaderin databases with its massively successfulIMS product, it was in no sense complacentor resting on its laurels. Indeed, IBM origi-nated and fostered relational technology inits San Jose Research Laboratory and devel-oped the first implementation, known asSystem R.7 Then, as always, IBM was inves-ting in long-term research that might ormight not reach the marketplace. When, or

whether, to exploit an emergent technologywas a difficult business decision.However, for new firms with no prior

investments in databases, relational technol-ogy was an opportunity. There were no large-scale competitors, and relational technologyoffered benefits that would be appreciatedby a new class of database customers. Thesecustomers were new to databases and weretypically smaller enterprises with DS needsbut modest or no OLTP requirements. Forthese customers, the usability of relationaltechnology in query formation was a massive

benefit, as was the relatively low price com-pared with database systems from the incum-bents. The ease of use meant that, instead ofa programmer, a database administratorwith less technical knowledge (but possiblymore business knowledge) could formulatequeries. The prices of early relational data-base programs were typically an order ofmagnitude cheaper than traditional prod-ucts, and the programs could run on smaller,less expensive computers rather than tradi-tional mainframes. Thus, the market becamesegmented between large organizations with

The RDBMS Industry: A Northern California Perspective

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big OLTP needs, tied to the incumbent pro-ducers, and smaller enterprises that wereabout to embark on the RDBMS adventurewithout prior experience and only modestoperational requirements.

RDBMS Start-Upsand Regional GeographyThe initial flurry of RDBMS start-up compa-nies was located in Northern California. Al-though the regional geography of areassuch as Silicon Valley and Route 128 hasbeen extensively studied, these investigationshave mainly focused on the electronic hard-ware industries.8 These studies show that in-dustrial concentrations arose from severalcauses, of which the most important wasthe supply of a highly trained labor forcewith specializations in the local industry.This supply of trained labor had a numberof contributory inputs, particularly knowl-edge generation and dissemination as wellas graduate training from a nearby technicaluniversity. Other factors favoring concentra-tion included venture capital funds with adeep, specialized knowledge of the industry.Also important were mechanisms by whichworkers from different enterprises could in-teract (bars, sports clubs, and so forth), en-abling them to pick up signals about thenew technology and job opportunities.

Industrial concentration in the software

industries has been little studied in US con-texts, although there have been studies ofsoftware concentrations in small countries.9

The only documented cases of the regionalgeography of specific software genres in theUS are the spreadsheet industry around Cam-bridge, Massachusetts,10 and the RDBMS in-dustry,11 which is further explored here.

In the case of the RDBMS industry, theprincipal sources of knowledge generation,dissemination, and training are clearly iden-tified. Knowledge of relational technologywas first generated at IBMs San Jose Research

Laboratory, which communicated its re-search findings freely through seminars, pub-lications, and informal contacts. There was aregular information exchange betweenresearchers at IBM San Jose and the computerscience faculty at the University of California,Berkeley.

The RDBMS workshops and interviewsconducted by the Software Industry SIG ofthe Computer History Museum brought outdetails of many such exchanges. For exam-ple, Jerry Held (then with UC Berkeley andlater with Tandem and Oracle) explained

that Ted Codd would literally come backand forth. Hed be at our place one weekand at System R the next.12 Michael Stone-braker (cofounder of Ingres) explained thatUC Berkeley alumnus Jim Gray (later the1998 ACM Turing Award winner for hiswork on databases) joined the IBM SystemR group, and it was mostly his doing thatwe would go to IBM Research in San Jose orthey would come up here. So we probablymet every six months, and so we knewwhat they were doing and they knew whatwe were doing.13 Gary Morganthaler (an-other cofounder of Ingres) explained, Berke-ley turned out to be a huge resource and wehad a flow of students, undergraduate andgraduate students, of exceptional talent.14

The Informix and Unify RDBMS companiesalso had close links with UC Berkeley.

However, tangible contacts between indi-viduals from different organizations are notthe whole of the story. For example, Oracledid not have notably close links with eitherUC Berkeley or IBM San Jose. It initiallylearned of relational technology throughCodds publications, although in its later de-velopment it benefited from manpower fromother local RDBMS companies. Furthermore,it would be wrong to suppose that relationaltechnology was in anyway confined toNorthern California. IBMs publicationswere disseminated globally to those who

were interested enough to read thembutit was particularly in Northern Californiawhere relational technology was in theair that they stood out from the mass ofpublications that crossed every researchersdesk. Ingres, it should be noted, was origi-nally a US National Science Foundationfunded academic research program for aUnix-based database system. Over 1,000 sys-tems were eventually distributed to univer-sities and research organizations. It seemslikely, however, that this did not so much re-sult in industry formation beyond Northern

California as stimulate an awareness of, anda market for, relational technology.Figure 2 shows the relative growth of the

four main Northern California RDBMS com-panies: Oracle, Ingres, Informix, and Sybase.From the beginning of the industry, Oraclemaintained an impressive lead.

OracleThe first firm to commercialize relationaltechnology was a small programming ser-vices firm, System Development Laborato-ries (SDL) established by Larry Ellison, a



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journeyman programmer, in 1977. SDL had acustomer, Precision Instrument (a formeremployer of Ellison), with a need for a DS sys-tem. SDL recognized the attractiveness ofSQL in formulating queries, and using IBMspublished materials as research background,a team of two created the first system. A sub-sequent contract with the US Central Intelli-gence Agency for a DS system (dubbedOracle) enabled the company to refine thetechnology.15

By the late 1970s, the commercial poten-tial of software products compared with pro-gramming services was well understood.However, the choice facing a new entrantinto the software-products industry waswhether to compete with established firmsin an existing software genre or to be firston the market with a new genre with uncer-tain market acceptance. Both were difficultpropositions, and this explains the high fail-ure rate of software-product start-ups. Giventhe choice, however, being the first to market

with a new software genre offered the greaterpotential reward (and risk).In 1978, Ellison decided to switch from

programming services to software products.SDL changed its name to Relational SystemsInc. (RSI) and entered the market with itsfirst relational product, Oracle, the followingyear. Over the years, the companys businesspractices were much criticized, but we shouldnot lose sight of the fact that its entry inthe RDBMS market was daring and path-breaking. Its eventual rewards were notentirely undeserved.

The Oracle product was initially devel-oped for DEC minicomputers, subsequentlyported to other minicomputers, and onlyconsiderably later to IBM mainframes.Thus, the key initial strategy was to targetnot mainframes, which were already wellsupplied with high-performance databasepackages, but rather minicomputers whichthen had few significant database products.Furthermore, Oracle was marketed as a DSsystem with limited OLTP capabilities. Thismade it an appropriate product for depart-mental systems and small business installa-tions making their first foray in databaseapplications.

With its early start advantage, RSI grewrapidly, doubling in size every year for morethan a decade. Its rapid early growth madeit a formidable competitor and market leaderwhen the other RDBMS start-ups began toemerge from 1979 onwards. RSI changed itsname to Oracle Systems in 1982, and sellingand consulting for the Oracle RDBMS prod-

uct became its primary business. Oracle(the company subsequently dropped theSystems from its name) benefitted fromluck as well as superior operations. In theearly 1980s, minicomputers began to com-pete with traditional mainframes, and Oraclebecame the acknowledged market leader fordatabases on these new systems. The com-pany made its IPO in 1986 and the followingyear, 10 years after its founding, it had an-nual revenues of $131 million, 1,121 employ-ees, and subsidiaries in a dozen countries. Itwas no longer a niche player and had soared


Figure 2. Annual revenues (in billion dollars) of Oracle, Ingres, Informix, and Sybase. Oracle maintained

an impressive lead from the beginning.



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to eighth position on the Top 50 Indepen-dent Software Vendors list.16

Ingres

The Ingres Corporation was a spin-off fromUC Berkeleys Computer Science Depart-ment, the most active academic center forrelational technology research in the 1970s.The leaders of the research activity weretwo academics: Michael Stonebraker, anassistant professor, and Gene Wong, a fullytenured professor. In 1972 they establishedthe Ingres project, which in the way of con-trived acronyms, stood for Interactive Graph-ics REtrieval System. The original project wasfor a graphical database, although it eventuallymorphed into a relational, textual database. Asit happened, both the Unix operating systemand relational technology came to Stonebrakerand Wongs attention just as the Ingres projectwas beginning. These were two of the mostimportant software developments of the1970s, and their combination would be mar-ket defining.

The Ingres database technology was heav-ily based on the IBM San Jose research, andboth Codd and Gray were regular visitors tothe UC Berkeley group. At that time, SQLhad not been developed, and Wong deviseda retrieval language known as QUEL (QUEryLanguage). QUEL was highly regarded andconsidered by many to be superior to SQL.

The first practical database program was com-pleted at UC Berkeley in 1975, and it wasfreely given to other Unix-using organiza-tions. As more and more universities and re-search institutes adopted Unix in the mid-1970s, Ingres became the preferred database.The group licensed Ingres somewhat in theway that Unix was licensed; they charged anominal fee to cover the cost of media anddistribution, but the rights remained withthe creators. Thus, both Unix and Ingreswere free to use and the source code was dis-closed (but they were not open source in

the modern sense). By 1977, there were 50or 60 users, and in the next two years thisexploded into some 300 installations.

By this stage, Ingres was being used forcritical applications that required proper sup-port and maintenance, which the UC Berke-ley group could not provide. This fact, andthe arrival of Oracle, indicated that therewas potential to commercialize Ingres. Stone-braker and Wong, however, were academicentrepreneurs, rather than business entrepre-neurs. (Stonebrakers main concern at thetime was to secure tenure.17) Stonebraker

and Wong therefore decided to establish afirm in which they would serve as boardmembers but not take part in the firmsday-to-day operation. The company, RelationalTechnology Inc., was formed in November1980 with modest venture capital fundingfrom local sources.

Because Unix was not yet a commercialplatform, the companys first task was toport Ingres to the VMS operating system,then the standard operating system for busi-ness users of DEC minicomputers. The com-pany grew rapidly, and in 1983, it was thefirst relational-technology company to havean IPO. Stonebraker and Wong remainedfull-time academics but continued to beactive in database research and to generate asteady flow of trained manpower for Ingresand the other RDBMS companies that werecoming into existence.

At first, when relational technology wasprimarily a DS tool, QUEL was a strong sell-ing point. However, by about 1985, SQLhad become the de facto standard and Ingreswas increasingly at a disadvantage. For thisreason, and Oracles aggressive business prac-tices, there was an ever-growing gulf betweenthe two. By 1989, Oracle had soared toannual revenues of $571 million, whileIngres had only achieved annual revenuesof $131 million (although this would havebeen a perfectly reasonable growth trajectory

had Oracle not been doing so much better).

Informix

Informix was formed at about the same timeas Ingres. The principal founder was RogerSippl, the son of Charles Sippl, author ofthe leading computer dictionary of the1960s. Sippl graduated from UC Berkeleywith a computer science degree in 1975 andsubsequently worked as a programmer withCromemco, an early manufacturer of micro-computers. While there he developed a (non-relational) database system and, in 1980,

decided to form Relational Database Systems.The firm avoided direct competition withOracle by focusing on DS applications onlow-end Unix systems. SQL had not yet be-come the de facto standard method of access-ing a relational database, and like Ingres,Informix developed its own proprietary accessmethod known as Informix4GL. At this time,installing a database was beyond the capabil-ity of most low-end users, and Informix wasmainly sold as a component of a turnkey sys-tem supplied by value-added resellers. A fullyrelational product and SQL access method



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was introduced in 1984. In 1989, as computerperformance improved, the company beganto compete in the OLTP market with Infor-mix Online.

SybaseSybase, established by Bob Epstein and MarkHoffmann in 1984, was the last of the majorstart-ups in Northern California. Epstein hadbeen a member of Stonebrakers group at UCBerkeley from 1977 to 1980. At that time,relational technology was unable to supportsignificant transaction-processing rates ongeneral-purpose computers, and two localentrepreneurs, David Britton and GeoffreyLee, established Britton-Lee in 1979 to de-velop a specialized database machine opti-mized for RDBMS applications.18 In 1980Epstein joined Britton-Lee to lead softwaredevelopment.

During the next few years, however,the speed of general-purpose computersimproved so rapidly that Epstein and hisBritton-Lee colleague Hoffman decided tocreate an RDBMS software product for thetransaction-processing market using con-ventional computer equipment. Sybase wasestablished just as Stanford-based SunMicrosystems was in the ascendant andwas competing with DECs more traditionalproducts. Sybase initially targeted its data-base to Sun client-server systems. Following

financial deregulation in the mid-1980s,Wall Street computerized rapidly and fa-vored the new client-server architecture.The Sun-Sybase combination proved ex-tremely popular with the financial commu-nity, and by 1990 Sybase had achievedannual sales of $100 million.

The Entry of IBM:An Industry in TurmoilIBM dipped a toe into the relational waterswhen it introduced SQL/DS, a decision-support RDBMS in 1981, which was based

on the System R code developed at IBMsSan Jose Research Laboratory during the1970s. SQL/DS was, however, something ofa niche product intended to operate onIBMs smaller mainframe computers, and ithad relatively low sales.19 Two years later,in June 1983, the company announcedDB2, its first mainstream, fully relationalproduct. The announcement legitimatizedthe relational concept and was an inflectionpoint in the ascendancy of relational tech-nology. Before DB2, relational technologywas admired by many and adopted by

some, but most conservative installationsstayed with their proven, nonrelational prod-ucts. Now, with IBMs imprimatur, even con-servatives could potentially be won over. Interms of operational efficiency, however,nonrelational technology remained superior,and this gave the incumbents some breath-ing space. (Indeed, nonrelational technologyhas always been computationally superior,but the importance of this has declined asthe cost of computer power fell.)

IBM had the classic dilemma of a disrup-tive technology, and it handled the dilemmawith considerable finesse through its dualdatabase strategy.20 For IBM, relational tech-nology was both a threat and an opportunity.If IBM endorsed relational technology, thenits existing IMS and DL/1 customer basewould no longer be so securely locked in; cus-tomers would likely evaluate the whole spec-trum of RDBMS products, not just IBMs, andDB2 would have to compete on its merits. Onthe other hand, doing nothing was not anoption; relational technology was improving,and it would eventually become suitable forOLTP database applications. In 1983, how-ever, relational technology could not yet sup-port demanding transaction-processingapplications, and the inertia of users meantthat it would be some years before theymade such a radical change. There was there-fore no possibility that there would be an

overnight switch.The opportunities for IBM were perhapsgreater than the threats. First, while IBMstraditional DBMS product revenues weregrowing somewhat, its competitors weregrowing faster and IBMs market share wasdeclining. In 1984, while its 15,000 IMSusers represented approximately 50 percentof the installed base, IBM was believed to becapturing only 20 percent of new sales.21

The database market was far from saturatedand offering a relational product to newusers enabled IBM to differentiate itself

strongly from the other nonrelational incum-bents, which were not yet offering relationalproducts. Moreover, as the inventor of rela-tional technology, IBM conferred a prestigeand credibility to its relational technologythat even the first-movers such as Oracleand Ingres did not possess.

Meanwhile, IBM continued to perfect itsrelational technology, and in February1986, it released a second version of DB2.The new product was OLTP capable and wasoffered on a six-month free trial. Accordingto a contemporary report, potential users




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began poking it with a stick in order to as-sess its potential.22

This was a turning point for the incum-bent nonrelational vendors; there was nowno escaping the competitive threat of rela-tional technology. In fact, some of theincumbents had already been half-heartedlyresponding to the threat of relational tech-nology. For example, Cullinane introduceda product variant IDMS/R with relational fea-tures in 1983, while others were offering SQLfront ends for their nonrelational products.Others were creating market confusion byusing adjectives such as relational-like.

This advertising fog was cleared when TedCodd published his 12 Rules in Computer-worldin the fall of 1985. Codds interventionshone a bright light on the entire relationalindustry, exposing products for what theytruly were. The 12 rules were a set of techni-cal criteria that a true RDBMS had to meet.Codd argued that a product meeting lessthan half of the rules could not credibly callitself a relational system. The rules weredemandingeven DB2 met only seven ofthem. It was far worse for the other incum-bents; two leading products that claimed tohave relational features (Cullinanes IDMS/Rand ADRs Datacom/DB) did not meet anyof Codds criteria.

Now that relational technology was inthe ascendant, the incumbents had three

options: first, to evolve their existing productinto a relational database; second, to developa new relational product; or, third, ignore therelational threat altogether. All three optionswere taken by the incumbents.

Cullinet (formerly Cullinane) took theevolutionary approach. It had responded tothe original release of DB2 by rebranding itsIDMS product as IDMS/R in April 1983. Thefact that IDMS/R met none of Codds criteriawas, to say the least, an embarrassment. Thecompany attempted to disarm criticism byshooting the messenger, arguing that

Codds 12 Rules were analogous to buildingan airplane that will not fly.23 This createdsome ambiguity as to whether the companywas serious about relational technology, andit did not flatter the judgment of its users.The company nevertheless stuck to its origi-nal strategy of converting its product to rela-tional technology over timealas, thismerely legitimized the technology for theCullinet installed base, which was later forcedto turn to other vendors, primarily IBM.24

Cullinets market share halved in twoyears, and the company was acquired by

Computer Associates in August 1989. Com-puter Associates made many similar acquisi-tions during the late 1980s and 1990s. Itsgeneral strategy was to take over existingproducts and essentially just maintainthem, while making large savings in develop-ment, support, and marketing; typically lessthan half of the employees of an acquiredfirm were retained by Computer Associates.Currently marketed as CA-IDMS, the productremains a viable second-tier DBMS.

Cincom was the first independent soft-ware vendor to offer a database product,Total, in 1969. In response to the relationalthreat, Cincom decided to develop an en-tirely new product. Somewhat like IBM, itconceived a dual database approach: itwould continue the evolutionary develop-ment of its traditional database, Total, whiledeveloping a new relational product, dubbedSupra. The company invested in a major devel-opment effort, reportedly costing $50 millionand consuming 21 percent of its revenues be-tween 1979 and 1983.25 As a privately heldcompany, Cincom was able to forego short-term profits for long-term gains. Cincomdiversified and grew its product range overthe years, and Supra remains a key productwithin its portfolio.

Other notable incumbents at the time ofthe DB2 launch included ADR (Datacom/DB), Software AG (Adabas), and CCA

(Model 204). They each have their individ-ual histories, but all the products havesurvived the vicissitudes of evolving tech-nology and corporate ups-and-downs. In-deed, the relational story illustrates one ofthe truisms of the software industry: thatsuccessful products typically outlive thefirms that created them. ADR was acquiredby Ameritech in 1985, which planned to in-vest heavily to convert Datacom/DB to rela-tional technology. However, this plan wasovershadowed by the problems of an agingproduct portfolio within ADR and financial

problems at Ameritech. ADR was acquiredby Computer Associates in 1988 from Amer-itech, and CA-Datacom/DB remains a viablenonrelational product for transaction-processing applications.

Software AG took an evolutionaryapproach with Adabas, adopting some rela-tional features but focusing more on itstransaction-processing capability. Adabasremains a successful database system, butwhereas in the 1980s Software AG was es-sentially a one product company, Adabasis now but one of a portfolio of products,



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and Software AG is ranked about 50th onthe Software 500 list.

With a similar strategy, CCA also focusedon the high-performance transaction-processing market in preference to going rela-tional. The company survived independentlyuntil its acquisition by Rocket Software in2010, and the Model 204 database system isstill a viable transaction-processing databaseproduct.

Maturing of the RDBMSIndustry, 19852005Three factors shaped the RDBMS industry inits maturing phase: the evolving hardwareenvironment, the rise of Enterprise Resource

Planning (ERP) software, and the trendtoward software industry integration andconcentration.

In the hardware environment, processingspeeds rose and costs fell dramatically. Thiswas enabled first by minicomputers compet-ing with mainframes and then by client-serversystems competing with minicomputersand mainframes. However, while the main-frame declined in importance, it did not dis-appear; it remains the foundation for manylegacy applications and the most intensivetransaction-processing environments.26 For

these reasons, the most prominent nonrela-tional databases, particularly IBMs IMS, havenot disappeared and continue to generateconsiderable ongoing maintenance and sup-port revenue.

During the 1990s, ERP software trans-formed enterprise applications. Previously,application software had been customwritten, or organizations had purchasedindustry-specific and cross-industry packagesfrom a variety of vendors. Software acquiredin different eras and from different vendorswas difficult for users to integrate, which

led to two industry developments. First, thesoftware industry consolidated so users wereable to acquire multiple packages from a sin-gle source, thereby shifting the integrationburden onto the vendor. Computer Associateswas the most prominent software firm adopt-ing this strategy. Second, ERP software offereda single application program that met all of ausers needs, instead of the user having topurchase multiple packages. ERP softwareand relational databases both came of age inthe mid-1980s, and they have evolved syner-gistically. An ERP package and a relationaldatabase became the most popular optionfor all but the most intensive transaction-processing environments.

From the late 1980s, major firms in thesoftware industry increasingly grew by devel-oping or acquiring complementary productsand services. For example, applications ven-dors began to bundle systems software, andsystems software vendors began to offerapplications software. As infrastructure andapplications software became more complex,the firms also began to offer consulting ser-vices to help install their products.

Table 1 shows market shares in the RDBMSindustry in 2005, some two decades after itbecame an established software category.

Of the original Northern California start-ups, Oracle prospered beyond expectation, be-coming not only the largest RDBMS vendor,but alsothe worldssecond largest independentsoftware firm (second to Microsoft). Sybase alsosurvived as an independent entity, while theother firms disappeared. Perhaps the mostunforeseen development was the rise of Micro-soft in the RDBMS industry. In the mid-1980s,Microsoft was exclusively a vendor of desktopsoftware and productivity applications.

Oracle was the first firm to offer a rela-tional product, and it was the market leader


Table 1. RDBMS market, 2005.

Company

RDBMS software

revenue ($ millions)

Market

share (%)

Total software

and services revenue

($ millions)

Oracle 6,238 47.1 10,156

IBM 2,946 21.1 61,307Microsoft 2,073 17.4 33,969

Teradata 468 3.2 1,467

Sybase 450 3.2 788

Other 1,149 7.9

Total 13,324 100

* Table sources are Gartner Says Worldwide Relational Database Market Increased 14 Percent in

2006, press release, http://www.gartner.com/it/page.jsp?id=507466, and company annual reports.



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from the beginning. However, it would bewrong to attribute its success solely to first-mover advantage and aggressive businesspractices. Oracle has been a master of integra-tion, both into services and up and down thesoftware stack. The firm established a con-sulting division in 1988 that soon generated15 percent of its revenue.27 In 1995 it devel-oped its own ERP software, Oracle Applica-tions. Between 1994 and 2005, Oracle madeapproximately two dozen acquisitions toadd capabilities to its applications and infra-structure software, including the purchaseof the ERP vendor PeopleSoft in 2005. Bythat time, only 60 percent of Oraclesrevenue came from database sales, the restcoming from consulting services and comple-mentary software products.

In the last two decades, perhaps no com-pany has undergone such a dramatic trans-formation as IBM. Following its fall fromgrace in the early 1990s, when it recordedthe largest loss in business history, itswitched its sources of revenue from predom-inantly hardware to services and software. In1985, hardware accounted for more than95 percent of IBMs revenue, whereas by2005, its revenue breakdown was 52 percentservices, 27 percent hardware, 17 percentsoftware, and 4 percent other.28 As a percent-age of sales, however, IBMs software incomehas remained relatively static since 1990, in

the region of 15 to 20 percent of total reve-nues. IBMs prominence in the RDBMS in-dustry owes much to the fact that it is thelargest single-source supplier of complete in-formation processing systems. It has neverachieved the rapid growth of software salesshown by Oracle or the more successful inde-pendent software vendors.

Microsoft was a latecomer to the RDBMSscene. Although Microsoft was the worldslargest software company by 1990, this wasbased on selling a high volume of low cost,relatively simple software products for desk-

top computers. In the late 1980s, however,Microsoft caught the wave of workgroupand networked computing with the develop-ment of its NT operating system.29 Microsoftoffered an alternative to Unix-based systemsand became the platform for tens of thou-sands of new ERP applications. Microsoftintroduced a relational database (SQL Serverbased on Sybase code) in 1988 and an ERPsystem (MS Dynamics, following its acquisi-tion of Great Plains Software) in 2002.

Along with Oracle, Sybase was theother prominent survivor among the early

start-ups, although in 2005 it was less thana 10th the size of Oracle. From the beginning,Sybase adopted a strategy of specializing inclient-server systems for transaction process-ing. It consolidated its position with techni-cally sophisticated complements to supporthigh-integrity systems and high-transactionrates across complex client-server configura-tions. Its revenue streams were furtherbuoyed by a five-year agreement with Micro-soft in 1987 to license it code for SQLServer.30 Similar to other successful softwarevendors, it integrated consulting services(with the acquisition of D&N Systems in1990). By 1995, services accounted for a quar-ter of its annual revenue. Sybase became apopular platform for ERP systems, and in2008, it was acquired by the leading ERP ven-dor SAP, enabling the latter to offer betterintegrated solutions.

And what of the other firms? In 1990,Ingres was acquired by ASK Computer,when both were at the peak of their success.ASK ran into difficulties, however, and wasacquired by Computer Associates in 1994.CA-Ingres remains a successful product.Informix made some ill-judged acquisitions,experienced management difficulties duringthe 1990s, and was acquired by IBM in2001.31 Informix remains an IBM product.

As noted earlier, software products typi-cally outlive the firms that create them, and

all the major DBMSs described here stillexist.32 At the time of this writing, the newthreat on the horizon is competition fromopen-source products, particularly MySQL.In order to compete, the major vendors(IBM, Oracle, and Microsoft) all introducedfree, reduced functionality (but not opensource) versions of their flagship products in2005 and 2006 (dubbed DB2 Express, OracleXE, and SQL Server Express).33 ComputerAssociates released Ingres as an open sourceproduct in 2004.

ConclusionsThis article has focused on the niche marketof the RDBMS. To what extent can such astudy shed light on the broader softwareindustry? There are perhaps three themesbrought out by this article: the role of usabil-ity in shaping software, the longevity of soft-ware products, and the population dynamicsof the software industry.

As noted earlier in this article, in terms ofefficiency, relational technology has alwaysbeen inferior to its more traditional counter-part. Relational technology has nonetheless



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become dominant because the price exactedfor usability is tolerable. The RDBMS user de-cided to trade somewhat lower performance,or somewhat higher equipment costs, forease of use. This phenomenon is not of courseconfined to RDBMS products. Within thedesktop sector, where usability is of particularimportance, ease of use has profoundlyshaped the trajectory of software productsand the industry. The issue of usability isless commonly observed in infrastructuresoftware such as databases and operating sys-tems, but it is there just the same.

Second, software products are commonlylong-lived. The majority of database prod-ucts, both relational and nonrelational, con-tinue to exist 30 or 40 years after theircreation, in many cases outliving the firmsthat invented them. These products continueto compete and survive in a surprisinglyheterogeneous universe of databaseseachproduct seemingly a different horse for a dif-ferent course. By contrast the universe ofhardware is homogeneous and commodi-tized. Clearly, software products benefitfrom lock-in effects, but there is additionallya form of brand loyalty. The database oftoday is massively improved compared withthe databases of the 1970s or 1980s, but theimprovements have been incremental andcontinuous and serve to keep users loyal totheir first choice.

Lastly, this study of the RDBMS industrysheds a sliver of light on the dynamics ofthe software industry. Most studies of the in-dustry have focused on specific products orcompanies, whereas when we study a partic-ular genre we see a richer set of interconnec-tions between industry players. Very little isunderstood about the population dynamicsof the software industry, particularly in quan-titative terms. We know that thousands ofsoftware firms are created each year. Manyof them fail, many others survive for decadesas small- and medium-sized enterprises

(SMEs), some are taken over by larger firms,and a tiny number grow to become giantsof the industry. What we cannot presentlydo is supply any numbers to illuminate thisassertion.

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21. Database Management Systems, p. 122.




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22. J. Desmond, Here Comes DB2: DBMS, Appli-

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Sonic the Hedgehog,p. 189.

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32. Apart from Intel, the dedicated RDBMS

hardware firms also mostly survived in the

database market. The most successful was

Teradata, which acquired Britton-Lee in 1990.

Tandem Computers was acquired by Hewlett

Packard in 1997, and HP Integrity NonStop

remains an important brand. Intel withdrew

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ized architectures) in the late 1980s to focus on

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The Move to the Middle: Convergence of the

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no. 2, 2010, pp. 223252.

Martin Campbell-Kelly is

an emeritus professor in the

Department of Computer

Science at the University of

Warwick. His primary interest

is in the history of the software

and computer industries. His

books includeFrom Airline Res-

ervations to Sonic the Hedgehog: A History of the Soft-ware Industry (MIT Press, 2003). He is a member

of the ACM History Committee. Contact him

at [email protected].


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