Microsoft: SQL Server licensing to win Oracle customers

Company says licensing is weak spot in Oracle's armory, and it hopes to use it to woo database customers to SQL Server 2008.
Written by Colin Barker, Contributor

The forthcoming launch of SQL Server 2008 will see Microsoft focus its considerable resources on the issue of licensing, to win customers from rivals Oracle and IBM.

"Our challenge, now (that) we have picked off a lot of the low-hanging fruit, is to attack the traditional Oracle strongholds," said Matt Dunstan, Microsoft's U.K. marketing director for databases.

Dunstan, who is in charge of the battle with Oracle and IBM, said Microsoft will exploit weaknesses it sees in Oracle's licensing and customer treatment. It is a bold strategy from a company that has itself frequently been pilloried for its licensing policies, but Dunstan clearly thinks Oracle's licensing is a weak spot.

A "common gripe" for Oracle customers, Dunstan said, is around the issue of maintenance and licensing. "Oracle has ticked them off," he added. "I am not privy to Oracle's commercial relationships, but one of the big misconceptions is that a lot of customers believe they have an Oracle site license...there is no such thing as an Oracle site license, I believe."

In fact, Oracle has two licenses for its databases: User Plus, which factors a minimum number of users, and Processors, which is based on the number of processors on the Oracle server.

Oracle earlier this year switched to counting processor sockets rather than processor cores for some products, following the lead of Microsoft, which had seen its database market share grow at 30 percent-plus revenue each quarter for several years.

Oracle was approached for comment to clarify its latest position on licensing, but it did not respond in time for this article.

Dunstan maintains that some Oracle customers discover the lack of a site license only when it's time to pay for the ongoing license, and they find that they have to pay more than they thought. He stressed that his information was from conversations with customers, resellers, and other interested parties.

Oracle has been prepared to offer something very like site licensing, at least for the National Health Service. However, it is not clear how much of an exception this is to normal policy. In January 2004, Oracle agreed to a contract with the NHS that worked out at around 100 million pounds ($207 million), and that licenses all NHS employees to use selected Oracle software.

"Our perspective is that SQL has become very widely adopted, even among the traditional Oracle and IBM customers," Dunstan said. "You often see SQL as well as Oracle, or as well as IBM. With customer references like Virgin, the London Stock Exchange, and Nasdaq, the question 'Is SQL good enough?' has gone."

Dunstan added that because Microsoft works off a clear price list, everything is clearly priced. "Customers can make decisions based on reasonable assumptions," he said.

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