The worldwide market for relational database management systems (RDBMS) grew by 11.6% to £8.27bn, according to analyst IDC.
However, IDC said the apparent healthy growth was helped by currency fluctuations and downward pricing pressure, meaning the market was not as healthy as the suppliers would have liked.
"There is no question that the overall trend is favourable - companies are clearly spending again to meet their backlog of database management requirements," said Carl Olofson, IDC analyst.
"However, if one takes into account the weakening of the US dollar over the past year, the picture changes to less dramatic growth rates," he said.
There were no changes among the top five RDBMS suppliers from 2003 to 2004, with Oracle again taking 41.3% of the worldwide market. Oracle was followed by IBM (30.6%) and Microsoft (13.4%).
Sybase and NCR Teradata were the other two in the top five, each with 3.1%.
In 2005, IDC expects the biggest battle to take place in the middle market as Oracle and IBM aggressively move into the area while Microsoft, which currently dominates this market segment, releases its SQL Server 2005.