Database Market Heats Up in Big Data Era

The Chinese database market is often described using the term "endurance," reflecting the harsh realities and long-term nature of its competitive landscapeAs domestic digital technology ecosystems rise, the number of database firms has surged, injecting vitality into the market while pushing competition to extremesHowever, the wild growth witnessed over the past few years is unlikely to sustain itselfAs the market matures, a significant reshuffle is on the horizon, with survival of the fittest becoming the watchword for the upcoming yearsThis presents several questions: What notable features characterize the Chinese database industry? What will be the focal points of future market competition? And who will ultimately prevail in this long-term contest of database supremacy?

Recently, a leading domestic database-focused firm, Mass Data, has shared insights on the development of the database industry, providing perspectives and answers to these pressing inquiries.

The "Warring States Period" of Database

According to the latest data from IDC, in 2023, the market scale of relational database software in China reached $3.8 billion, marking a year-on-year growth of 10.8%. Expectations indicate that by 2028, this figure could soar to $9.8 billion, reflecting a compound annual growth rate (CAGR) of 20.9% over the next five years

Advertisements

This optimistic outlook amidst accelerated integration of digital and physical realms suggests significant promises for both market prospects and industrial future.

However, competition in the current database market resembles a "Warring States Period," characterized by the presence of international giants alongside established local companies, as well as numerous cross-industry entrants and a handful of startupsData from the China Academy of Information and Communications Technology indicates that the number of domestic database companies has neared 200, although only a few boast over a thousand employees, with some companies having fewer than five developersSuch a landscape points to a burgeoning yet unsustainable competitive environment.

The database market is classified as essential foundational software, which inherently requires a high level of engineering sophistication

Advertisements

As market realities evolve, a higher concentration of companies is expectedIt is evident that the participation of hundreds of firms competing in the marketplace is not viable, given the limited market sizeAdditionally, a fragmented pool of talent and financing contradicts the overarching goal of sustained industrial growth.

For instance, the market is flooded with rapidly packaged "instant products" based on open-source databases like MySQLRegardless of these products' competitive strength, the future risks associated with MySQL's GPL open-source licensing could heavily rely on Oracle's stance as a major industry player.

Thus, after several years of unruly growth, signs of notable trends have emerged in the Chinese database marketFirstly, the entry barriers are noticeably increasing, and the convergence of the market is evident as new rounds of competition commence, leading to an accelerated exit of "disruptors" and an uptick in mergers and acquisitions

Advertisements

Secondly, international database giants remain the benchmarks for domestic companies, with core technological competencies, particularly concerning database kernels, becoming focal points in the ensuing rivalryLastly, structural uncertainties arising from fundamental shifts in the external environment will reshape the landscape of China's database industry, with domestic technological systems gaining ground and shaping future market dynamics through policy directions and technological routes.

The Chinese database market appears poised for a sustained, quality-driven competitive era"Competition in the domestic database market is a lengthy battle, and it is challenging to see any immediate results," states Mass Data's president, Xiao Feng"We must ensure that Mass Data maintains a seat at the table throughout this time."

Database competition is a protracted endeavor.

Positioned as an ecosystem-oriented product, databases can thrive as domestic technology systems emerge

• Challenges of Global Economic Recovery
• US CPI Data is Here!
• Gold Prices Continue to Fluctuate
• Synology Technology Empowers Data Value Realization
• A New Contender in the AI Cloud Computing Arena

The potential for Chinese database firms lies in creating a virtuous cycle of "technical research, product innovation, market demand, and ecological partnerships," consequently fostering their own growth momentum amidst fierce competition.

From Xiao Feng's perspective, the contours of future competition in the database market will hinge on five key factors: capital investment, technology, efficiency, policy, and market share.

To begin, capital will play a pivotal role in subsequent battlesAs many recognize, databases are a "heavy industry" within software—that is, they require significant upfront investment coupled with prolonged commitments to realize slow returnsThis factor makes the prospect of "quick profits" in the database sphere an unlikely scenarioWhen competition narrows down to core product capabilities, companies will need ample financial resources to underwrite product development, technological innovations, operational management, and market expansion efforts.

Xiao Feng, President of Mass Data

Xiao Feng elaborates that the importance of capital for the future of Chinese database companies stems from the protracted competitive landscape involving large enterprises, state-owned companies, and diverse players

In the near term, a stable market structure is unlikely"As a public company, Mass Data enjoys multiple financing paths, with strategies to ensure sufficient capital reserves over the next five years to sustain daily operations and market growth," he concludes.

Secondly, technology will serve as another battlefieldGiven the intensive engineering requirements for database products, competition inherently revolves around core technical teams and product capabilitiesCurrently, there remains a shortage of core kernel development talent within the Chinese academia and industryThus, a stable and progressively expanding core R&D team invariably enhances product innovation and engineering capabilitiesFor instance, Mass Data’s core development team has maintained stability over the years, with plans for continued expansion.

"The essence of competition in the database realm lies in talent," says Xiao Feng, emphasizing the paramount importance of attracting and retaining skilled personnel.

The third aspect covers decision-making and operational efficiency

In the crowded Chinese database market, where numerous companies vie for a slice of the pie, operational efficiency becomes particularly criticalAs domestic firms grow in size and user bases, they face inevitable challenges in operational frameworksThe current service system for databases is crucial, yet domestic providers often lack maturityThis presents a lengthy path reliant on original manufacturers to deliver services, placing a continuous strain on companies' operational capabilities.

Xiao Feng disclosed that in recent years, Mass Data has placed great emphasis on team integration and operational management, gradually forging refined management capabilities that ensure competitive advantages in decision-making and operational efficiency.

Fourthly, shifts in policy landscapes present potential challengesAs the database market converges and entry barriers rise, the ramifications of regulatory changes will likely become more pronounced

Initiatives such as national-level directories, reliability assessments, and industry qualification standards will effectively filter out database companies that fail to meet stringent technological criteria and comprehensive competency benchmarks.

Mass Data serves as an excellent example, having attained extensive certifications and evaluations, rendering it one of the most qualified database firms in the market, while also being the sole openGauss product cleared in national security assessments.

Finally, an upward trend in market share will foster positive feedback loopsOnly by capturing a substantial market share can database firms nurture brand recognition, ecosystem growth, and sales channels effectivelyWithout enhanced market presence, even the most advanced technologies or products may struggle to break into a saturated market

Incremental improvements in market share can propel companies forward, establishing proactive footholds in competitive arenas.

Less is More: Mass Data's Focus

The principle of maintaining logic and factual accuracy underpins the core tenets of businessObserving global database titan Oracle, with investments involving tens of thousands in database product development, one must appreciate that there are no shortcuts in this particular marathonPersistent investment in cultivating competitive, market-responsive products constitutes the essential recipe for enduring success in the database arena.

While a multitude of enticing emerging products like time-series databases, graph databases, distributed databases, cloud databases, and integrated data lakes populate the current market, the grim reality lies in that, for many China's database companies, managing a diversified portfolio exceeds their existing scale and revenue, burdening them with the challenge of overextending their resources

Hence, the mantra "less is more" becomes increasingly relevant, dictating that focusing on targeted areas of expertise should remain the most viable developmental strategy.

As Xiao Feng succinctly puts it, "Achieving excellence in a database product without a thousand-person development team is a tall orderEven as Mass Data expands to 2,000 employees, our commitment is to focus solely on one database product."

From a technological perspective, Mass Data intends to steadfastly adhere to the purely domestic, self-developed openGauss technology lineSince its open-source release in 2020, openGauss has attracted over 6,100 core contributors and more than 570 reputable enterprises and academic institutionsThe platform has demonstrated robust growth in ten critical industries, such as finance, government, and telecommunications, becoming China’s most vibrant open-source database root community.

Xiao Feng asserts that the future is promising with a purely domestic technological route, as Mass Data aims to excel within this narrative.

With respect to product strategy, Mass Data remains committed to an integrated product route of centralized architecture

Market leaders such as OceanBase, Jin Zhuan Shuke, and Mass Data are all adopting focused product strategies to build powerful, integrated solutionsMass Data's plan is to concentrate on centralized databases, which will enable it to exceed competitors in terms of capital, technology, and operational efficiency.

For example, the latest integrated database product from Mass Data, Vastbase, has enhanced two particular features: an AI-integrated vector data processing engine and capabilities for data processing across multi-modal environmentsThe incorporation of specialized engines for time-series and spatial data considerably bolsters Vastbase’s applicability and competitiveness, while the addition of a vector data processing engine adeptly supports user needs across AI application scenarios.

In essence, the principles of "slower is faster" and "less is more" perfectly typify the aspirations at play here

A few years ago, the prevailing sentiment was that Chinese databases would necessitate extended timeframes to reach maturity in kernel developmentYet, the performance of ventures like openGauss in crucial business contexts recently confirms that patient cultivation and focused effort can significantly elevate a database product's core competitive capabilities.

In conclusion, looking back at over forty years of development, the Chinese database industry has genuinely carved out its niche within the marketToday, as competition in the Chinese database sector transitions into a new phase, it heralds a shift characterized by an intricate interplay of capital, technology, and efficiencyIn accordance with the timeless adage, "stay true to your original intent," Mass Data’s adherence to a purely domestic technological line coupled with a focus-driven product strategy undoubtedly positions it for greater market opportunities, paving the way for China’s database industry to chart a victorious path ahead.