SQL Server 2008: Licensing will be exploited to win customers

Microsoft believes licensing is the weak spot in Oracle's armoury, and hopes to use it to woo database customers to SQL Server 2008

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.

Speaking to ZDNet.co.uk, Microsoft's UK marketing director for databases, Matt Dunstan (pictured), said: "Our challenge, now we have picked off a lot of the low-hanging fruit, is to attack the traditional Oracle strongholds."

Dunstan, who is in charge of the battle with Oracle and IBM, said Microsoft will exploit weaknesses it sees in Oracle's licensing and treatment of its customers. 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 licence… there is no such thing as an Oracle site licence, I believe."

In fact Oracle has two licences for its databases: Named 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 did not respond in time for this article.

Dunstan maintains that some Oracle customers only discover the lack of a site licence when it's time to pay for the ongoing licence, and they find 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 NHS. However, it is not clear how much of an exception this is to normal policy. In January 2004, Oracle agreed a contract with the NHS that worked out at around £100m, and that licenses all NHS employees to use selected Oracle software.

"Our perspective is that SQL has become very widely adopted, even among the tradition 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.