Jim Gray, Microsoft Research

A small research investment helped produce U.S. market dominance in the $14 billion database industry. Government and industry funding of a few research projects created the ideas for several generations of products and trained the people who built those products. Continuing research is now creating the ideas and training the people for the next generation of products.

Industry Profile

The database industry generated about $14 billion in revenue in 2002 and is growing at 20 percent per year, even though the overall technology sector is almost static. Among software sectors, the database industry is second only to operating system software. Database industry leaders are all U.S.-based corporations: IBM, Microsoft, and Oracle are the three largest. There are several specialty vendors: Tandem sells over $1 billion/ year of fault-tolerant transaction processing systems, Teradata sells about $1 billion/year of data-mining systems, and companies like Information Resources Associates, Verity, Fulcrum, and others sell specialized data and text-mining software.

In addition to these well-established companies, there is a vibrant group of small companies specializing in application-specific databases—for text retrieval, spatial and geographical data, scientific data, image data, and so on. An emerging group of companies offer XML-oriented databases. Desktop databases are another important market focused on extreme ease of use, small size, and disconnected (offline) operation.

Historical Perspective

Companies began automating their back-office bookkeeping in the 1960s. The COBOL programming language and its record-oriented file model were the workhorses of this effort. Typically, a batch of transactions was applied to the old-tape-master, producing a new-tape-master and printout for the next business day. During that era, there was considerable experimentation with systems to manage an online database that could capture transactions as they happened. At first these systems were ad hoc, but late in that decade network and hierarchical database products emerged. A COBOL subcommittee defined a network data model stan-

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