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The Bloor Perspective: AOL's challenge to Microsoft, IBM's challenge to Oracle, and optical fibre - the next challenge for the Internet
In their latest snapshot of the week's key issues, Robin Bloor and his colleagues look at how a wounded Microsoft could face a direct threat from AOL; how DB2 is beating all-comers as the ebusiness database of choice; and why new research could herald a quantum leap in Net data speeds

By Bloor Research

Published: Monday 17 April 2000

Following the recent judgement against Microsoft, the time may be right for some competitors to take Microsoft on directly. AOL might be a prime candidate. In particular, it may try to re-establish the Netscape browser.

As things stand, Internet Explorer has 70 per cent of the browser market, but much of this share depends upon the single deal between Microsoft and AOL which puts the AOL icon on the Windows desktop in exchange for IE being the default AOL browser.

If AOL now chooses to reject Internet Explorer in favour of Netscape Navigator then Microsoft might not have the nerve to eject AOL from the desktop - for fear of an "anti-trust outcry" in the press.

Early last year, we were tipping AOL as "the next Microsoft" because it had clearly occupied a number of strategic positions in respect of the Internet. In particular we were impressed with its purchase of ICQ and its dominance of "chat" software. Chat software is the precursor to Internet telephony and whoever owns the biggest directory stands a good chance of taking the biggest part of the market. We were unsurprised to watch AOL manipulate its market position to try to deny Microsoft a part of that market. In an ironic change of roles, Microsoft was calling for open standards while AOL was ignoring the call.

Now that Microsoft is perceived to be wounded, there is little reason for AOL not to become more aggressive. If AOL doesn't re-ignite the browser battle now, it will inevitably do so if its new Internet appliances catch on.

* DB2 gets ebusiness makeover *

IBM announced DB2 Universal Database version 7 last week in simultaneous PR events across the globe. Janet Perna, the general manager for data management at IBM, was in Vienna, Austria, addressing various groups of European IT analysts and journalists.

Version 7 is clearly a major release with far too many elements to be covered here but, for the record, here are the major highlights:
* The addition of an in-memory database text search capability (which will run at ten times the speed of disk-based text searching)
* The fundamental integration of XML within DB2
* The integration of OLAP within DB2
The integration of Oracle within the DB2 environment (including heterogeneous database optimisation)

IBM is positioning this release as a radical departure from the traditional database market, embodying as it does many features that are unashamedly targeted at ebusiness. In particular the in-memory text capabilities and the deep commitment to XML reflect this, but so too do many of the finer details of the announcement such as the fact that there will be special pricing for ASP usage of DB2.

IBM is clearly targeting Oracle in its positioning of this release and aims to raise the bar for Oracle. DB2 overtook Oracle as the database market leader last year and appears to be increasing its market share. It can now boast of nine consecutive quarters where DB2 growth in the Unix and Windows NT market has averaged four times the growth of the whole market.

IBM has pursued an aggressive and successful pricing policy with DB2 in these markets, offering DB2 at roughly one-third the price of Oracle. However IBM's success can also be attributed to other factors. While these include the ramping up of functionality, in our view the major contribution has come from IBM's assiduous courting of ISVs, particularly the large ERP and CRM vendors.

Not so long ago, DB2 was on the list of database "also-rans" as regards the porting of software packages, but this is clearly no longer the case. IBM claims there are now 16,000 or so DB2 applications, which probably puts it on a par with Oracle. However IBM does not have an applications business of its own, whereas Oracle does. Thus Oracle inevitably suffers from a level of channel conflict from which IBM is immune.

* The next step for the Web *

The existence of a global communications network has been a revolution in itself. Yet the prospect is of further dramatic developments in all areas of technology, and most especially in communications. The University of St Andrews in Scotland is at the forefront of research into phenomenally high-speed communications.

Starting in June, the research project, "Ultrafast Photonics for Datacomms Above Terabit Speeds" (UPDATES), will be carried out in collaboration with five partner universities: Bristol, Imperial College, Glasgow, Heriot-Watt and Sheffield - and eight major industrial partners: Agilent (formerly Hewlett-Packard), Marconi, Nortel Networks, JDS-Uniphase, Kymata, Sharp and Vitesse.

New research is looking for substantial improvements in the laser devices that drive optical fibre communications links. The six-year grant will support research work in the important field of optical information technology, which offers major advantages over conventional electronics-based approaches. The team will focus on schemes that take advantage of digital optics. Potential speed gains are huge, taking a single fibre well into terabits per second.

The individual user, with a PC or similar workstation, is currently not seriously concerned to achieve higher processing speeds. Most tasks can be carried out effectively with current hardware. The same is not true of communications, where anyone who uses the Internet regularly is aware of both the benefits and the frustrations brought by constrained speeds. While great ingenuity is going into techniques for optimising the use of limited bandwidth, the obvious solution is a massive increase in available bandwidth.

To gain the greatest benefit, we are back to an issue that has been around for some time. We need to have optical fibre communications to business and domestic locations everywhere. This was suggested as soon as optical technology became practical, but implementation has been patchy and often damaged by constraining technical architectures. Research into world leading optical technology is a good start. Its significance will be greatly magnified if we can, in parallel, put in place universal optical connectivity