In early November when Microsoft formally launches SQL Server 2005, the first major refresh of its database and business intelligence system in five years, the company will finally have the ammunition to start fighting for a place on the enterprise systems software rostrum.
Supported by a lavish marketing budget that in the UK alone runs into several million pounds, SQL Server 2005 makes up much of the ground that has enabled Oracle and IBM to dominate the high end of the data management market. The question is: Has Microsoft simply been playing catch up or has it created a platform of such compelling value to enterprises that rivals will see their more than 80% combined share of the high-end database market start to crumble?
While Microsoft has built a $1.6 billion database business largely through selling SQL Server as a mid-range product, it has struggled to establish it as a platform for the kind of core applications that banks, telecoms providers and other major users rely on. Its relatively low cost, bundled business intelligence (BI) functionality and tight integration with Windows has made it the default choice for small and mid-sized companies, as well as many independent software vendors.
But in the five years since SQL Server 2000, the majority of the development effort has gone into addressing the high-end requirements that Microsoft hopes will extend that franchise to big business. "The key theme was getting the product ready for the enterprise, making it enterprise-strength," says Eric Rudder, head of Microsoft's server and tools business worldwide.
The aim is also to disarm competitors. "Oracle has done a good job in keeping the myth alive that SQL is mid-range, departmental," says Renaud Besnard, SQL Server product manager with Microsoft in the UK. The new enhancements to SQL Server, with a focus on scalability and performance, security, high-availability and manageability, should silence them, he says.
"We want to put the perception to bed once and for all that SQL Server is a product solely for SMEs," says Besnard. "The emphasis is on enterprise credibility. We want to show that there is a sound justification for using SQL 2005 with mission- critical applications."
Power of analysis
But while the high-end features of the database may be a leap forward for Microsoft's enterprise software ambitions, listening to the SQL Server cognoscenti, the real interest actually lies elsewhere.
For Michael Otey, technical director of Windows IT Pro magazine and the author of a new book of SQL Server 2005's features, the big story in SQL Server is business intelligence. "Virtually every aspect of BI – integrate, analyse and report – has been either completely revamped or significantly enhanced."
SQL Server's Analysis Services has been enhanced in terms of real-time capabilities scalability and speed. Its new Unified Dimension Model (UDM) acts as a single source for any analysis – multidimensional cubes, relational online analytical processing (OLAP) or any variation on those themes. According to Mat Stephen of the SQL Server Worldwide Users Group, of SQL Server's new features "some can be described as ‘catch up' features and some of them might be described as ‘tick in the box' features. [But] there is one that is wholly revolutionary and which shouldn't be described as a feature" – UDM.
With a mix of catching up and leapfrogging products from Cognos and Business Objects, SQL Server's reporting capabilities have been enhanced to make reporting much easier for non-technical users. Says Besnard: "Report Services can now insulate the business user from the reporting logic."
The customer pressure for Microsoft to match its rivals' reporting tools actually prompted it to release the first iteration of Report Services in 2004, but the product will not be complete until the 2005 version ships with its Report Builder end-user ad hoc reporting tool.
Related to those BI activities, Microsoft is also introducing a new set of products for data extraction, transformation and loading (ETL). In replacing the previous DTS (Data Transformation Services) toolset with "a complete rewrite" known as Integration Services, Microsoft is acknowledging that data movement and integration has become a major corporate focus – and one which its previous offering was incapable of fully addressing.
Recognising this, Microsoft increased the size of its ETL development team by a factor of four in recent years. The result is a highly visual approach to ETL, where users can ‘walk through' the processes of extracting data from multiple databases.
Meanwhile, the push towards the enterprise has promoted a repackaging of SQL Server options. At the entry level, Microsoft will offer Express. This is a single-CPU licence product aimed at developers – especially those who might be tempted to choose the open source relational database system, MySQL.
A step up from that, Microsoft will offer SQL Server Workgroup, targeted at small departmental applications or customers who have outgrown the Microsoft PC-centric Access database and who only require a small number of supported ‘seats'. The Workgroup product has limited platform support (it works for up to two processors) and limited functionality (for example, its reporting capabilities are restricted to the local relational database).
Sitting above these are the core products: the Standard edition and the Enterprise edition. Standard SQL Server includes many of the high-availability features such as database mirroring, failover clustering and back-up log-shipping; it also has many advanced BI facilities, such as Analysis Services, UDM and Data Warehousing. But for the scalability, performance and high-availability enhancements that Microsoft thinks will take it into the database superleague – partitioning, parallel and online indexing, online restore and fast recovery – organisations will have to opt for the more expensive Enterprise product.
In some ways, Microsoft's policy of storing up enhancements for one mammoth release has acted against it, especially when those release dates slip – sometimes by years. The avalanche of features is going to present a steep learning curve for users – the same users who might have looked on and seen SQL Server 2000 slip behind rival database and BI products. Indeed, the experience and frustration associated with SQL Server 2005 seems to be changing minds within Microsoft: there are clear signs that the company is starting to shift to a more staged release of functionality.
But neither the frustration over the long wait for a product overhaul, nor the slipping delivery dates that usually prompt customers to hold back purchases seems to have badly dented SQL Server's revenues in recent periods.
According to Besnard, the SQL Server division has been experiencing double digit growth over the past two years. And even in 2005, there has been "no dip" as the launch of 2005 has neared.
Analyst group Gartner reckons that Microsoft grew its database revenues by 18% in 2004, outpacing rivals to give it a 50% share of the Windows database market and a 20% share of the overall market (behind Oracle and IBM each with 34%).
On the BI side, Microsoft Analysis Services commanded a 27% share of the OLAP market, ahead of rivals Hyperion, Cognos and Business Objects, according to Nigel Pendse, author of The OLAP Report, who thinks about a third of SQL Server sales were driven by the product's analytical capabilities.
As Pendse points out, SQL Server's momentum has been built by a huge popularity among smaller and mid-sized organisations. Now, Microsoft has to prove SQL Server has come far enough in five years to justify the enterprise data management sticker.