Oracle Counters With a Survey in Database Debate

The database drama continues.

Fresh off its annual users conference, database software kingpin Oracle(ORCL Quote) is crowing about stealing customers from IBM(IBM Quote). It says it's grabbing users of Informix, the company that IBM acquired earlier this year for $1 billion.

Big Blue is pooh-poohing those claims.

"We have not seen any customers migrating to Oracle," says IBM spokeswoman Lori Bosio. "This is just another example of [Oracle] trying to steer attention away from the fact that their database business is not growing."

The database wars between the two giants have been especially fierce this year, as sales of Oracle's core database product have been declining while IBM says its sales have skyrocketed. In their most recently reported results, Oracle's database revenue declined 8% compared to a year ago, while IBM said sales of its DB2 database increased 56%.

Oracle has disputed IBM's claims on that front, though, because IBM doesn't break out its database business in dollar amounts, as Oracle does.

Monday, Oracle is expected to release the results of a survey that it commissioned on the future plans of Informix customers. The firm says the document supports its original hypothesis customers forced to make a switch anyway would choose Oracle's product over IBM's. Oracle has gone so far as to provide a "trade-in" rebate to Informix customers who pick Oracle's wares. But the survey results, reviewed by TheStreet.com, are short on actual customer names or plans and don't provide the questions used in gathering the information.

For the survey, Oracle hired market research firm Hart-Hanks to query 235 Informix customers about their database plans. Of those customers planning a switch, 45% said they would likely choose Oracle's database, compared to 13% who said they would choose IBM. The survey also claims that of Informix customers that have already switched, 41% selected Oracle while only 14% chose IBM.

The Importance of Informix

IBM's acquisition of Informix has been one of the most closely watched sagas in the database wars this year. At face value, the acquisition would give IBM three points of market share, an area where it's been gaining on Oracle in recent years. Before the acquisition, it had 30% of the overall database market, compared with Oracle's 34%, according to research firm Gartner Dataquest.

But when IBM announced the Informix deal in April, observers immediately questioned how many of the firm's 100,000 customers it could convert into buyers of its own DB2 database. At the time, analysts wondered whether customers, faced with making a change as Informix was phased out, would choose IBM's database or Oracle's, which currently leads the market. Since then, IBM has said it will continue to offer technological support to Informix customers, and even put out an upgrade for the software in October.

Now, with its survey results, Oracle says it's poised to win the tug of war over the Informix install base.

"If you say Informix was a $1 billion business, we're going to get three-quarters of that," says Jeremy Burton, Oracle's senior vice president of marketing. "They'll be left with $250 million for the $1 billion they paid. Doesn't sound like a good deal to me."

The survey says that just 37% of respondents were satisfied with IBM's migration plans. It also claims that only 20% of respondents had been approached by IBM's sales team with a migration plan. That claim runs in stark contrast to analysts' predictions -- Gartner says at least 75% of Informix users will switch to IBM -- and the perceived hands-on approach of IBM database chief Janet Perna.

Terilyn Palanca, an analyst at industry research firm Giga Information Group, says that IBM has catered to its Informix customer base, ensuring those companies that IBM will continue to support Informix technology.

Spin Control

"The information is at odds with the feedback I'm getting from Informix customers and IBM," Palanca says. "IBM has spoken with all the [Informix] customers, and they see very few of them are migrating away." Palanca also points out that 73% of the respondents in Oracle's survey had annual revenue of less than $50 million, which means they are likely not high-dollar accounts for either company.

"I'm not saying that Oracle hasn't signed any of them, but if the survey doesn't make it clear exactly who they're talking about, then I think you've got to look at it with a certain amount of skepticism," Palanca says. "If Oracle wants us to believe it's getting the majority of the Informix customer base, they've got to show exactly who they're pulling in."

Oracle, in fact, has put out information on Informix customers it claims are switching to Oracle. They include Gulf Insurance Company, based in Kuwait. While Oracle put out a press release announcing the grab at the end of November, IBM says Gulf Insurance had already started migrating to Oracle before IBM made its Informix acquisition.

"The customer made a strategic decision to move to Oracle last year, long before the IBM acquisition of Informix was announced," IBM wrote in an email sent to TheStreet.com. A representative of Gulf Insurance didn't immediately respond to an email asking about the firm's switch.

Still, whatever the truth behind the numbers is, expect more sparring over the issue between the two firms as Oracle unleashes its survey results more widely.

"A lot of people asked why Oracle didn't buy Informix before IBM," says Oracle's Burton. "Given these statistics, the answer's easy: We'll get those customers anyway."

IBM disagrees.

"How much weight can you put behind an internal report?" IBM's Bosio asks. "Not much."