Reinventing the RDBMS Market

P> Software vendors Oracle Corp., Sybase Inc. and Informix Software Inc. probably long for a relational database management system of historical information to help them fathom the strange happenings in the federal infotech marketplace. They've never seen anything like what has occurred during the last six months.

Such customers wonder: Is client/server really the right way to go? Should I stick with the commercial, off-the-shelf purchasing strategy? Or should I buy a customized solution? That uncertainty is pervading every facet of information technology purchasing.

The three leading database software vendors are, therefore, adopting dramatically different strategies to cope. They're mapping distinct sectors, based on their divergent world views. Call it reinventing government computer contracting.

"There's been such an exodus of senior federal contracting officials who were very Oracle-literate. The same can be said for our competitors," said Jack Pellicci, vice president for strategy, solutions and marketing at Oracle Federal Systems. "We invested a lot of time in them, making them understand our capabilities and solutions. Now they've handed it off to somebody else who's not too sure they want to make a decision."

Oracle, Sybase and Informix now are spending time re-educating federal customers on what relational database technologies can do for them. It is a business necessity, but the companies are positioning themselves differently while doing so.

A glimpse into Oracle's new strategy can be seen at the U.S. Air Force's personnel management center. In February, the Pentagon chose the Bethesda, Md.-based Oracle division to build the Personnel Data System, touted as one of the largest human resources projects.

The contract calls for modernization using open systems architectures and off-the-shelf software. Oracle's system offers extensions to the personnel database and human resources management modules, as well as applications developed with computer-aided software engineering tools. Instead of selling a full-scale RDBMS, Oracle focused on marketing applications development tools. It didn't try to renovate the entire system.

It is a strategy that Pellicci said the company will stick with. How many more full-scale database systems can be sold? Almost all the major systems that can be installed already have been. A recent study by International Data Corp. said that Oracle controlled 70 percent of the federal market for RDBMS.

But there is more to this strategy. Oracle is Larry Ellison's company, and he is the man behind the vision of the so-called Network PC. This, too, is central to the marketing of Oracle's database solutions and applications to the government.

"It [won't] replace the PC, but it will augment the PC," said Pellicci. "For this computer, the server is the key. You [will] have thousands of servers all over the place. The strength is that there is distributed computing. Computer users inherit the operating system of the server. There is a data server out there that has an Oracle relational database on it. We're taking the applications on that server and borrowing them. So we can do our spreadsheets, mail and browse on the Internet. It becomes so powerful, and costs between $400 to $500. And in a government environment, you have the ability to arm everybody with these things. They can work from their desk, from home, from anywhere in the world."

Oracle's pitch: This will reduce the life-cycle costs of running a PC, which is generally $5,000 per year, including maintenance, depreciation, software and training. What's more, it will facilitate the move toward getting everyone in the government on the Web.

In early April, Oracle previewed its new systems management software, Enterprise Manager, which lets customers manage thousands of servers from one location. This software is crucial to helping push the Network PC into government offices.

"Customers know they have to leverage the spending on the Internet and on intranets," explained Pellicci. "They're replacing a lot of their own internal networks with those networks because they're cheaper and more reliable. They're saying, 'We've already bought a database. What can I do to bring that up to the Web?'"

Simply put, Oracle is trying to sell federal customers on the idea of creating pages with an application, database mark-up language and another application in its closet of tool offerings. But Oracle isn't the only federal contractor being affected by these computing cross currents -- from the Web to federal downsizing to a saturated marketplace.

According to Dave Nahmias, federal product marketing manager at Informix, the Web is shifting user expectations about accessing information from their database. "I'm still not sure if the Web will change the world," said Nahmias. "But what it is doing, however big it becomes, is altering the way people see things."

Traditionally, in the federal market, for new technology to filter down to the average worker, it would go through various stages. This included a management review process, consultant reviews, tests and then "two and a half years later, you would get a 286 PC," he said. "With the Web, there is the freedom to discover live video, audio, search technologies and different products. It is altering the culture of the government."

Informix found that it no longer can raise technical objections to customer requests about accessing data from an RDBMS. "They'll say they were just on the Web and were able to do that quite easily," Nahmias said.

Informix is accelerating its time table to enhance search engines. That is why it purchased Illustra recently. What's more, the whole company now is focused on supporting complex data. And that means selling the Web as a boring business process to customers. "How can you keep the hype at the level it is now?" he said.

Mundane applications, such as time sheets, are possible avenues for future Informix sales. Federal agencies no longer need to keep time sheets for all their employees. They can simply log on the Web and leave their data there.

But the key to Informix's strategy for the government is Web maintenance. "More and more, we see customers putting their Web pages into a database also," Nahmias said. "The first reason is for maintenance. A universal server from Illustra has a Web data blade that allows you to dynamically build HTML pages. It is also coupled with select triggers. You can actually follow what the user is doing, and dynamically build a page for them, on the fly."

What's next for Informix in the federal marketplace? The company is addressing projects with extended data requirements -- such as NASA's Earth Observing System. Investigative agencies, such as the General Accounting Office, probably would need to increase their image storage and retrieval capabilities.

As a result, smart cards also are a potential focus. "Right now, a smart card holds about 8K. But within six to nine months, that could be up to 64K," said Nahmias. "More and more, as room is put on the card, there will actually be a small relational database on that card. Our focus is on multipurpose cards. You'll keep a history of medical, dental, social security cards.... And the idea of having that routine information on a smart card, accessible by other federal networks, has a lot of appeal."

Right now, there are no federal initiatives for such an endeavor. But Informix is making a priority of it. "This is just getting off the ground," said Nahmias. "It is hard to predict when it will happen, but it makes too much sense for it not to happen."

Sybase, meanwhile, has a strategy to take databases to the constituents of federal agencies, as well. But it wants to use television as the route, not smart cards or the Web. Again, the idea is that the market for its main database products is saturated. And applications are the key to sales success.

According to Toby Younis, director of special programs for Sybase's Public Sector Group, the thinking at Sybase is that for most federal agencies, the constituency will not have access to a computer. So putting everything on the Web does not make sense, if a manager runs the Women, Infants and Children's Program or other entitlement programs.

"Most of the database software that will be bought has probably already been bought," he said. "I don't know of any company that is betting its federal systems business solely on the database product. If you do, you're crazy. The government isn't buying more stuff."

Instead, accessing current data sources and providing it to constituents will be the key. "Only 40 percent of the U.S. population has access to a computer," said Younis. "But that particular demographic isn't a constituent of entitlement programs or regulatory programs. If the success of the Internet program is to have access on-line, how likely is it that it will be a key tool for most of their customers?"

Younis called television the "great equalizer" because everyone has access to it. Imagine, he said, if an agency could deliver services over the television. "The device for access is the 12-button keypad on your remote control device," he said. "Not a Web browser."

Sybase is detailing to federal agencies how such a strategy can be deployed in disseminating services. At the head end of each cable TV station connection, a server running Sybase software would reside. It is from sales of thousands upon thousands of these server solutions that Sybase would further expand a federal software market that has seen much turmoil during the year.

Is Sybase's strategy wacky? Perhaps. But the company is only operating according to its perceptions of the market. And it perceives a need for dramatic action.

Data warehousing is a concern for some vendors, as well. A recent study by IDC examined the return on investment for data warehousing, and included several government agencies in its review.

The U.S. Army's deputy chief of staff and several states, including Minnesota, Alaska and South Carolina, participated in the project. The IDC study found that on average, organizations got more than a 400 percent return on investment on data warehousing software.

Richard Rist, director of worldwide marketing for data warehousing software at Software AG, said the company is adjusting its strategy, as well. Some aspects of data warehousing that apply to the commercial sector don't go over in the federal arena.

For example, the government does not focus on getting more business out of its customers or increasing revenue flow. But human resources and other financial data can be stored more effectively for the government.

"To make a decision-making process more advantageous, you must get out of the day-to-day processing, and look at various aspects over time," said Rist. "People today just deal with production systems that deal with what is happening today. Or if you're lucky, what is happening this month. Warehousing is giving you that view of what is happening over time."

Another consideration by government customers is that the amount of data doubles every 18 months within an organization. "The whole rightsizing movement has stripped out a lot of people from organizations. But middle management was the group that analyzed data. The number of decisions that must be made on a daily basis is increasing," said Rist. "We kind of have a gap between the number of decisions that need to be made and the ability to make them."

Software AG recommends that customers develop so-called "Data-marts," which are small-scale data warehousing efforts. After building the first environment, the value of the warehousing should become apparent. NASA, the Federal Aviation Administration and other Software AG customers run the company's traditional production database systems. But to generate more revenues, the company must sell them on data warehousing.

One prototype program is underway at the Health Care Finance Administration. "Our initial target is to help these people build their first warehouse environment," said Rist. "The data is coming from our environment in the first place. We're coming full circle in these environments. It's almost like going back to the mainframe."

Who will succeed in the new federal RDBMS market? TV server makers? Smart card purveyors? Whatever the case, the marketplace surely has been reinvented.