(Yicai Global) Feb. 17 -- American software giant Teradata is withdrawing from the quickly growing Chinese database market, clearing the way for increasing rivalry among the still small local players.

The exit shows that localization of basic software, including operating systems, databases, and Big Data analysis platforms, has accelerated, industry insiders said to Yicai Global.

Database vendors, including Teradata, once had a large market share in the fields of finance and mobile communications, but as volumes have grown rapidly, the cost of using Teradata is too high for users, said Wang Nan, research manager at IDC China.

The scale of China’s database market will reach CNY68.8 billion (USD10 billion) in 2025, with a five-year compound annual growth rate of 23.4 percent, according to the China Academy of Information and Communications Technology. In 2021, the size was CNY30.9 billion, making up more than 5 percent of the global total.

Several Chinese alternatives to American data warehousing products have emerged in the past few years. However, not one firm has risen above others as "everyone has equal opportunities," per Wang. But the situation might change as local companies have begun increasing their investments in research and development.

From 2017 to 2021, traditional database vendors, including Oracle and IBM, gradually lost market share due to their slow cloud transformation, according to Gartner. Now the firms face stiff competition from global tech behemoths Amazon, Google, and Microsoft but also from Chinese firms in the Asian country.

"The amount of data in China is growing one million times compared to a decade ago, which has created a lot of demand for databases," Liu Ruimin, chairman of data infrastructure provider Boray Data, told Yicai Global. But in the key areas of finance, telecoms, electric power, and energy, domestic products still have great growth potential, Liu added.

With the withdrawal of overseas firms, a large number of data professionals will be unleashed into the Chinese market, Wang predicted. This means that going forward, domestic companies will focus on competing for talent, the research manager added.

Editor: Emmi Laine, Xiao Yi