Microsoft Shrugs Off Latest Oracle-Dell Play on SMB Market

By Lisa Vaas  |  Posted 2004-04-06

Microsoft Shrugs Off Latest Oracle-Dell Play on SMB Market

Oracle Corp.s announcement Tuesday that it is bundling its Standard Edition One database prepackaged on Dell PowerEdge servers formed the latest salvo in the ongoing database price war launched against Microsoft Corp. and its low-cost SQL Server database. Predictably, Microsoft was dismissive of the move.

"They did the same thing back with Standard Edition One," said Mitch Gatchalian, product manager for SQL Server, in Redmond, Wash., referring to a January announcement by Oracle President Chuck Phillips at Oracle AppsWorld. At that time, Phillips said it was time to go on the offensive against Microsoft and that pricing for the Windows version of Oracle Database 10g would be set at the same list price per processor as SQL Server.

"They said, Well lower the price and compete with Microsoft," Gatchalian said. "There didnt seem to be much uptake there, so theyre trying a new trick."

Although the stakes in the database war are much higher with todays announcement—after all, Dell has inroads into the small and midsized business market that Oracle sorely needs if its to successfully compete with SMB king Microsoft—Gatchalian repeated the same mantra that Microsoft voiced in January. At that time, Tom Rizzo, Microsoft director of product management, told that customers have to pay for a lot more than a database when they purchase Oracle.

Gatchalian said Microsoft ships free business-intelligence functionality that gives crucial reporting and analysis capabilities to SMBs. "In the SMB space, folks are trying to play in the big world. Theyre amassing considerable amounts of data," he said.

"The question is, what do they do with all that data? Microsoft provides ways to analyze it with BI. With Oracle Standard Edition One, thats not included. That would take another $40,000 to be on par with SQL Server functionality."

Next Page: Competitors are also waging war over manageability.

Manageability War

Gatchalian also raised the issue of ease of use and manageability—qualities for which SQL Server is noted. But in addition to waging a price war, Oracle is also waging a manageability war that Oracle CEO Larry Ellison pitched once again Tuesday, citing Oracle Database 10gs 15-minute install time—greatly reduced from previous versions six-hour installation times.

"One of the things about 10g we focused on is making it not only easy to buy and install but also extremely easy to use," he said in a conference call with journalists and analysts.

"[Oracle Database] 10g is a much more automated application than anything before it," Ellison said. "We can help customers administer the system so they dont need a DBA [database administrator]. Its all about delivering a system thats not only inexpensive to buy but easy to use and has low total cost of ownership. Its that automation that helped us get to this market. Its a combination of our relationship with Dell and that technology that makes us now ready for this [SMB market]."

Gatchalian said Microsoft has no plans to counter Oracles move with similar bundling initiatives. Its too early to think about such things for the upcoming SQL Server 2005 update, code-named Yukon, he said, since that iteration is just now entering Beta 2 testing.

Besides, Microsofts Small Business Server 2003, launched in October, already addresses everything the SMB market needs, he said. For $1,499, SBS 2003 ships with Windows Server 2003, Exchange, IIS, the Internet Security and Acceleration Server and SQL Server, which makes it a viable competitor to Oracles newly announced $4,995-per-processor offering, he said.

"Take a look at the needs of this market," Gatchalian said. "These are the guys who want to play in the world market. They want to put their products out to the Web, have online transactions, which is key because of changes in SQL Server for SBS 2003. We provided unlimited, unauthenticated Web access to data stored on SQL Server. You dont have to buy the per-processor licenses. And remember, in the SMB market, theyre very careful about how they spend their dollars."

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