DB2: IBM’s New Weapon

International Business Machine (IBM - Analyst Report) is getting plenty of new SAP Business Applications clients who are switching from other database software to IBM’s DB2. This new database software provides an attractive alternative because of its lower cost, advanced analytical capability and higher transactional performance.

IBM claims that customers are slowly moving to its DB2 Database from Oracle (ORCL - Analyst Report), which is arguably the world’s biggest supplier of database software, to derive higher performance at a lower cost.

Recently, Coca Cola Bottling Co. (COKE - Snapshot Report) moved from Oracle to IBM DB2 Database for implementation of the SAP ERP application. While DB2 reduces storage requirements by almost 40%, IBM is also of the opinion that it lowers the time of batch runs by more than 65% and thus improves overall supply chain efficiency of the customer.

Leading Brazilian engineering, construction and development group Rossi Residencial saw a 50% jump in data volume after shifting to shifted to IBM DB2 for implementation of SAP application. DB2 gives the company a comprehensive, updated view of operations and entails lower maintenance and operational cost.

IBM has already received a SAP certification for its DB2 9.7, as a preferred SAP implementation database. This apart, IBM and SAP are working together to provide proper support for this software and ensure client satisfaction. We believe that DB2 will add another dimension to IBM’s business as customers around the globe have started recognizing its benefits.

As a result of its large non-US revenue base, IBM has been better insulated from the recent weakness in the US economy than many of its peers. The global acceptance of DB2 is expected to boost the company’s non-US revenue base further. However, we expect Oracle to fight back with an enhanced version of its database software as the company will aggressively try to prevent the loss of market share.

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