Competing Technologies in the Database Management Systems Market

In this paper, we study the dynamics of the market for DatabaseManagement Systems (DBMS), which is commonly assumed to possess networkeffects and where there is still some viable competition in our studyperiod, 2000 – 2004. Specifically, we make use of a unique anddetailed dataset on several thousand UK firms to study individualorganizations’ incentives to adopt a particular technology. Wefind that there are significant internal complement effects – inother words, using an operating system and a DBMS from the same vendorseems to confer some complementarities. We also find evidence forcomplementarities between enterprise resource planning systems (ERP) andDBMS and find that as ERP are frequently specific and customized, DBMSare unlikely to be changed once they have been customized to an ERP. Wealso find that organizations have an increasing tendency to use multipleDBMS on one site, which contradicts the notion that different DBMS arenear-perfect substitutes.