SQL Server 2005 brings new features, higher price

Microsoft unveiled packaging for its SQL Server 2005 database, including a 25 percent price increase.

The long-awaited upgrade to Microsoft's SQL Server database will come with a raft of new features when it ships later this year -- as well as a price hike of up to 25 percent, Microsoft said on Thursday. The company also announced a new version of the product for smaller businesses.

The Enterprise Edition of SQL Server 2005, formerly known by its Yukon codename, will have a list price of US$24,999 per processor, or US$13,499 for a server and 25 user licenses. That's up from US$19,999 per processor, or $11,099 for a server and 25 user licenses, for the equivalent version of SQL Server 2000. The Standard Edition also carries a higher price tag.

Microsoft said the increase is justified by new features in the product, which marks the first big overhaul for SQL Server in five years. The Enterprise Edition carries several capabilities that are new to Microsoft, including partitioning, which can be used to improve database performance, and mirroring, for creating a backup database to increase the availability of applications.

"For the added value customers get, we think the price increase is not that high," said Tom Rizzo, director of product management for SQL Server.

Microsoft has said it will not charge customers extra to run the database on multicore processors, Rizzo noted. By contrast, Oracle and IBM require customers to buy a separate database license for each processor core. And Microsoft includes features such as partitioning and mirroring as standard, he said, while its rivals typically price them separately.

Paul Kirby, senior research director with AMR Research, said the price increases do not seem unreasonable, largely because of the extras Microsoft includes. Reporting Services, a tool for collecting and analyzing data that was introduced with SQL Server 2000, remains a part of the product and is useful to a lot of customers, he said.

"They're still going to significantly underprice IBM and Oracle," Kirby said.

Microsoft also unveiled a new version of SQL Server on Thursday called Workgroup Edition, aimed at departments and smaller businesses. Limited to two-processor servers and 3G bytes of RAM, it is aimed at customers who had been asking for a no-frills version of SQL Server database at a low price, Rizzo said. Priced at US$3,899 per processor, or US$739 for a server and five user licenses, it has no reporting, OLAP (online analytical processing) or business intelligence features but does do back-up log shipping, he said.

The Workgroup Edition appears similar to Oracle's Standard Edition One and IBM's DB2 Express products, both of which are recently launched low-end databases for two-processor servers. Oracle, in particular, has been gunning for Microsoft's customers and has boasted that Standard Edition One was cheaper than SQL Server.

AMR's Kirby said the product may be of most appeal to value-added resellers who were looking for a product with more functionality than MSDE (Microsoft Database Engine) -- a bare-bones database that Microsoft offers for free -- and yet cheaper than SQL Server Standard Edition.

Workgroup Edition will be added to the current SQL Server 2000 family and go on sale in four to six weeks, Rizzo said, as well as being part of SQL Server 2005 line-up. Microsoft has signed a new reseller agreement with Dell Inc. in which the computer maker will resell both the Workgroup and Standard editions of SQL Server, he added.

SQL Server 2005 Standard Edition remains limited to servers with four processors, but Microsoft is removing the cap on RAM, and the database now supports 64-bit processors, as does the Enterprise Edition. Standard Edition also includes database mirroring and some new integration services. It will be priced at US$5,999 per processor, or US$2,799 for a server and 10 user licenses -- about 20 percent higher than its predecessor.

Completing the lineup, Microsoft's MSDE is now called SQL Server 2005 Express and has had some basic reporting capabilities added to it.

All the editions of SQL Server 2005 have an updated management interface which Microsoft says is easier to use, and are driven by a higher-performing SQL Server engine with built-in support for XML (Extensible Markup Language) documents and encryption, Rizzo said.

SQL Server has long played catch-up with Oracle's and IBM's databases, which historically have been seen as technically superior. Both have supported high-end features such as partitioning and mirroring for several years, for example. But Microsoft earned a reputation for ease of management, and its historically lower prices made it "good enough" for many types of use, analysts have said.

Databases are increasingly being seen as commodity products, according to Kirby, where customers pay as much attention to price as to technical features. "This is a trend that plays in Microsoft's favor," he said.

Microsoft hopes to accelerate its growth with SQL Server 2005. The products will ship in July or August, Rizzo said, in line with a revised schedule released last year but still later than it had originally planned. Microsoft also plans to slip out a third beta release by the end of March, Rizzo said.

The pricing and packaging details are being announced earlier than usual to give customers plenty of time to plan their purchases. Customers who sign up for Microsoft's Software Assurance contract now will get the upgrades for the price of SQL Server 2000, Rizzo noted.

That will be little comfort for customers who signed up for the three-year contract in 2001 and expected to receive the Yukon upgrade last year, when it was originally promised. Microsoft has since extended support for SQL Server 2000, which had been set to expire at the end of this year, to give customers more time to upgrade. Support for SQL Server 7.0 will expire at the end of this year as planned, however, when only security patches and bug fixes will be available.