Question

Topic: Research/Metrics

Market Size Of Custom Database Applications

Posted by Anonymous on 3/19/2010 at 12:19 PM ET 250 Points
I'm looking to determine the US market size for custom database applications. There's a lot of information available on the RDBMS market size (Oracle, IBM, Microsoft, etc) but I am not interested in those numbers. I want to know how much money is spent every year developing applications for those databases and also licensing costs, maintenance fees, etc.
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RESPONSES

  • Posted by mgoodman on 3/19/2010 at 3:53 PM Accepted
    I think it's possible that the numbers you seek are not collected anywhere. You may have to slice the data another way. The market is very fractionated ... lots of small companies and individual software geeks are doing the work, and sometime it's done in-house, sometime outsourced. And if a US-based company outsources to Asia (or wherever), you may never be able to track it down.

    Suggested approach: Push yourself to define what you'd do with the answer if it showed up. What action would you take based on the number? And what if you learned that the number you were using were only accurate to +/- 50%? Would you take the same action?

    There has to be a better way than whatever you're thinking to get the information you need to make a decision.

  • Posted by koen.h.pauwels on 3/20/2010 at 7:21 PM Accepted
    Echoing Michael's response, why are you interested in this information? Is this a client's request for market size estimation? Or do you believe you need the information to make an important decision for your own company? Depending on your answer, we can offer you specific advice
  • Posted on 3/20/2010 at 8:05 PM Author
    I need the information for my own company. Our product is targeted at this space and I want the numbers for our business plan.
  • Posted by Chris Blackman on 3/21/2010 at 8:38 PM Accepted
    You will almost certainly find this information is not readily available.

    You could contact organisations like the Association of Database Developers https://www.databaseassociation.com/, or the Association for Computing Machinery https://www.acm.org/ or Computing Research Association https://www.cra.org/ or even the Computer Society of the IEEE https://www.computer.org/ but I doubt they will have precisely what you need. This is information that would be expensive to gather, probably single-purposed, in terms of how a survey might be written to gather information, and proprietary to the owner, who would not wish to share it once they have invested in it for their business purposes.

    Sometimes the kind of information you want is available form government departments where the government is trying to attract more investment and new entrants to a particular business sector, but I doubt that to be the case here.

    If you can't access the facts from some public source, you're going to have to conduct your own research to uncover what you need to know to justify your business case for your new product or service.

    If you already have a database of industry professionals in the right market segments, perhaps you can use that. alternatively, you may be able to rent a database from one of the organisations referenced above. The Association of Database developers sounds fairly well targeted for your application, but on closer inspection seems to have only 82 members in USA and no newsletter update since 2003. I think if I were you I might start with the Computing Research Association. Your company may even be a member, which may give you access to mailing lists, member survey data, etc.

    Develop an on-line questionnaire using a tool like SurveyMonkey. If you don't have access to it, or lack the necessary skills, post a project here on MarketingProfs https://www.marketingprofs.com/ea/pfh_addco.asp and someone is sure to step up.

    Good luck.

    ChrisB


  • Posted by mgoodman on 3/21/2010 at 9:15 PM Moderator
    What will you do differently if/when you have these data? If the numbers are smaller than you anticipate, will you not enter the market? If they're bigger, will you increase your up-front marketing investment? Do you have a number in mind that you think is close? How will you know if the number you come up with is even in the ballpark?

    I think you're chasing the wrong information for your business plan. Not only is it not readily available, but it's almost certain to be a wild estimate if/when you do come up with a number.

    Save yourself a lot of grief and spend your time on something more productive. The idea isn't to have a perfect and beautiful business plan. It's to have one you can execute and with which you can make some money.

  • Posted on 3/27/2010 at 6:43 AM Author
    ASVP/ChrisB,

    Thank you for your reply. It's obvious you put a lot of time and effort into it. I will look into the Computing Research Association. I don't have any follow up questions for you.

    mgoodman,

    Thanks also for your information.

    I want at least a grasp of the numbers for when I approach venture capital. In my original question, I asked for US numbers, but I was planning to use them to extrapolate to the worldwide market. According to IDC (https://www.pcworld.com/businesscenter/article/147684/idc_oracle_maintains_...), the relational database market was $18.8 billion in 2007, up 12.6% from 2006. Oracle dominates with 44.3% (declining) of the market. I have to assume that Oracle's numbers include revenue from all their application packages which crossover at least somewhat into the market that I am interested in.

    From my own experience in the industry, the capital spent on purchasing a database is just a drop in the bucket compared to the money spent developing applications for the database. Also, approximately half of all these projects fail and virtually none of the successful projects are delivered on time.

    My ballpark estimates are $20 billion (conservative), $50 billion (probable) and $100 billion (possible).

    I'm not that worried about having a perfect business plan, I'm just trying to determine and justify a fair valuation for the business. Our product has been in development for several years and we're looking at a possible Q4 2010 release.
  • Posted by Chris Blackman on 3/28/2010 at 8:15 AM Member
    Aha, Iceberg - I have a feeling we may have spoken in the past.

    Remember Oracle is only one player. Imagine how many SQL databases exist out there and how many applications are running on them. One client of mine is running at least three separate discrete systems on SQL. Including their accounting system.

    And how many instances of Access exist out there? It comes bundled with most Pro versions of MS Office.

    I'm with Michael to some extent. I think your number is almost irrelevant. Sure, it's large - probably ludicrously so - but I would talk to your VC about unmet needs of existing systems and tools, and the problems your product solves, not the fact the market is a gazillion dollars and all you need is .01% of it to make them all very rich.

    The VC will want to know why a prospect would buy your product rather than one from a well-established player, say, Microsoft. And VC's usually don't like miniscule market share as an investee objective - they will want to know why you can't get ten or twenty percent of the market.

    Cheers

    Chris
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