Battle will be joined in the databse market later this year with the November launch of Microsoft’s SQL Server 7. This will pitch Microsoft head-to-head against its main rival in the database market, Oracle.
Microsoft has traditionally dominated the bottom end of the market, while Oracle and IBM hold sway in the market for enterprise-wide databases for large corporate users where reliability is critical. But Bill Gates’s firm is hoping SQL Server 7’s new features, and the growth of its Windows NT operating system, will help it tempt medium sized companies needing enterprise-wide systems the same firms Oracle is targeting as it attempts to widen its own appeal outside large corporations.
Both databases are to be offered by Enterprise Resource Planning (ERP) system vendors as an integral part of their packages.
Microsoft’s SQL Server 7 software has been undergoing rigorous trials throughout industry for some time. The beta 3 version, delivered to 50,000 sites in June, now includes integrated On Line Analytical Processing (OLAP). It is this function, previously not included, that offers a direct challenge to Oracle.
Latest figures from analyst Data-Quest estimate Oracle’s 1997 share of the $6.6bn database market to be 27.5% compared with Microsoft’s 12.1%, with Oracle leading on both Unix and NT Windows platforms.
Sales of database products on Windows NT alone grew 91% in 1997, with Oracle taking 42% and Microsoft 39%.
At a technical level, SQL Server 7 brings many improvements over version 6.5, especially in critical areas such as performance, the scale to which it can be applied, cost of ownership and number of concurrent users. Microsoft’s OLAP server is integrated, as are other data management products, making it an attractive package for the small to medium-sized organisation.
Oracle is well established at the top of the market, with Oracle 8 the database of preference for mission-critical applications, supporting a large numbers of users and huge quantities of data.
Oracle 8 has been on the market for 14 months, and 8.1 is due at the end of this year, bringing features to improve support of enterprise-wide applications. In the past, many Oracle customers have started with SQL server 6.5, but moved to Oracle when they needed more reliability and sophistication.
But Windows NT users, which tend to be smaller companies, may favour SQLServer 7 over Oracle. Microsoft will try to capitalise on the explosive growth of NT as the preferred industrial operating system by tightly integrating its new database with its other software products.
Meanwhile, Oracle, which improves its integration with the operating system with every release, will stay ahead on features and power. Because it is already strong in the market for larger corporate users, to find new customers it will have to move down the scale to provide enterprise-class database systems for smaller companies.
The battle for customers will be fought mainly where parts of the market overlap, in middle-sized companies requiring good data management and reliable systems.
In this mid-sized organisation market, manufacturers use ERP, Product Data Management (PDM), CAD and other industrial systems to run their businesses, all of which depend on a high-quality database.
‘With SQL Server 7, Microsoft is taking the mystique out of databases,’ says Peter Thorne of analyst Cambashi. ‘Different database systems have advanced features to cater for specialised users, but application authors often avoid these so they can offer customers alternative relational database management systems.
‘SQL Server 7 is likely to enlarge the market for database applications, as small and medium-sized companies start to use database technology for the first time.’
‘The database system chosen for an application may be determined by trends in the market in which it is sold. Fourth Shift’s decision to offer ERP software using Server 7 was influenced in this way, and by the performance it can deliver to ERP users.’
Dick Schultz, Fourth Shift product manager, says: ‘We operate in tier-three companies with a turnover of $150,000 $15m. At this level, Microsoft is king, whereas Oracle is strong in tier two, where companies have a turnover of above $150m.
‘We’ve gone from a Novell business [a network operating system eclipsed by the growth of NT and the Internet] three years ago to the point where 90% of our sales are now NT. We see SQL Server 7 as a big opportunity.’
In a slightly different market, Strategic Systems International (SSI) sells versions of its Tropos ERP systems for Unix and NT. The Unix version uses an Oracle database, but on NT systems, customers want a choice.
‘Customers want the database system which best suits their needs,’ says Youri Korsak, technical development manager for SSI. ‘In the past, Oracle has been 12 18 months ahead of Microsoft on functionality, especially in support for large numbers of concurrent users.
‘SQL Server 6.5 could not support ERP but version 7 appears to address all the issues, especially locking, and it’s ahead of Oracle on integration with NT. Provided the basic features work, SSI doesn’t have a problem about which database is used.’
The same message comes from PeopleSoft, a supplier offering its systems on most big relational databases to the larger end of the ERP market. Oracle is used by more than 50% of systems sold, followed by Microsoft then IBM’s DB2.
Brian Conley, Microsoft business development manager at PeopleSoft, says: ‘To move into our market for prime time, mission-critical systems, customers really need SQL Server 7, which supports many users and cuts total cost of ownership.
‘Microsoft has done a good job and its product will be good for the industry. What it has automated is going to redefine the role of database administrator. Oracle and DB2 must take a hard look at their products.’
There is little to choose between Oracle and Microsoft on basic functionality and features, so it will be on aspects of management and operation that they pit their skills against each other. Price is unlikely to be an issue, as the database is only a small part of an application’s total cost.
One fly in Microsoft’s ointment might be the fact that to switch from SQL Server 6.5 to SQL Server 7 is not simple. Companies have to completely convert their systems, and while Microsoft provides a range of wizards and other advanced tools, organisations which need to operate 24 hours a day, seven days a week, will need to plan carefully. By comparison, upgrading Oracle is a much simpler task.
At the same time, it will be interesting to see how Oracle counters Microsoft’s huge technical and marketing investment and the wide range of improvements being introduced to make the database easier to use.
One possibility is that products will fragment into a core product plus a range of add-on services. Competition will then centre on the range and capability of the additional services, which are easier to differentiate than straightforward database performance.
There will also be competition for business to upgrade and replace corporate applications based on established database systems.
The computer industry is resigned to the fact that at the bottom end of the market there is no contest. Here, a high-quality product such as Microsoft’s can become a basic commodity which is almost part of the operating system, something which Oracle and other database vendors cannot easily emulate.
But when it comes to performance, management, reliability and tuning, only time will tell whether SQL Server 7 has what it takes to run enterprise-wide mission-critical applications to the satisfaction of the user community and whether Oracle can match what Microsoft has done to simplify database operation.