- For decades, three tech giants dominated the database market: Oracle, IBM, and Microsoft.
- But with the rise of cloud, these firms are losing their hold on the market, analysts tell Insider.
- Insider compiled a list of nine companies that are taking on database titans, changing the guard.
For decades, the database market was dominated by three tech giants: Oracle, IBM, and Microsoft.
But the rise in cloud computing has brought on a changing of the guard. From 2018 to 2020, Oracle lost 7.1% of its market share and IBM lost 2.5%, market research firm IDC estimates. Increasingly, customers don’t want to be locked into software from one company, and are instead moving to the cloud and using open source software.
“That means the old restrictive, locked-in commercial arrangements with companies like Oracle are necessarily being abandoned,” said EnterpriseDB CEO Ed Boyajian.
The database management software market will grow at a 5-year clip of 13.9%, expanding from $54.6 billion in 2020 to $104.5 billion in 2025, IDC estimates.
“The predecessors owning this space like Oracle and Teradata gave way to Cloudera which gave way to Snowflake and Databricks. The next evolution of IP in the data market is the move to real time data and streaming,” Greylock partner and enterprise tech startup investor Jerry Chen wrote in a recent blog post.
MongoDB has become a “go-to” database player, according to a recent report by financial firm William Blair. MongoDB generated $198.7 million in revenue this past quarter, and its stock reached highs this September.
Smaller companies are also emerging to take on the old guard. Investors have poured $26 billion into the database market since 2019, according to PitchBook.
Several factors have sped up the growth of the database market. Now, more companies are moving their applications to the cloud, updating their applications, and adopting AI and analytics.
In addition, the coronavirus pandemic has accelerated cloud database services. For example, MongoDB’s cloud database service Atlas generated 56% of the company’s total revenue this past quarter, up 83% from the same time the previous year.
It might take some time to topple the giants. Microsoft, Oracle, AWS, IBM, and SAP were the five largest database vendors in 2020, holding over 80% of the market, according to IDC. And Microsoft and Oracle together still control over 57% of the market. But the database market is still in its early days, and companies are still experimenting with the best ways to manage data.
Already, several database companies, both public and private, already surpass $100 million in annual recurring revenue, according to the William Blair report.