18 Jan

How Does Oracle Maintain Its Dominance in the Database Space?

WRITTEN BY Anne Shields

The rising popularity of open-source databases

Previously in this series, we discussed how, in spite of the growing popularity of open-source databases, Oracle (ORCL) continued to reign the database space in 2015. Open-source software is preferred as it can manage vast volumes of data and anybody in the world can view and change its underlying code. Moreover, cost is a major factor for startups and other decision-makers in choosing a database.

How Does Oracle Maintain Its Dominance in the Database Space?

Oracle’s leadership position

Once a database is chosen, enterprises take extra care to stick with their chosen databases. Once data goes into a particular database, chief information officers try their best to keep it there. Their dependence on the database and the associated costs in shifting to another database are significant risks that often outweigh the benefits of choosing open-source software. This is where Oracle benefits over its peers.

Long-standing business relationships, complexity in migration to different technologies, scaling, instrumentation, and performance are some of the reasons why companies prefer to continue using Oracle’s database. Rather than leave Oracle or SQL Server, companies find it relatively easier to replace one open-source database with another, which comes with a substantial price tag. Along with Oracle’s database, Microsoft (MSFT) SQL Server and IBM (IBM) DB2 are highly ranked databases, according to DB-Engines.

Investors who wish to gain exposure to Oracle can consider investing in the iShares Russell 1000 Growth ETF (IWF) and the SPDR S&P 500 ETF (SPY). IWF and SPY have exposures of ~12.5% and ~9% to application software, respectively, and invest ~0.7% of their holdings in Oracle.

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