All that is old is new again. It was ten years ago that Microsoft truly entered the database system market, adapting program code it had purchased from leading database vendor Sybase for Microsoft SQL Server 6.0 for Windows NT. IBM, Informix, Oracle, and Sybase dominated the market. A decade later Informix is gone, Sybase is a shadow of its former self, and Microsoft -- with the launch of SQL Server 2005 -- is poised to challenge for DBMS leadership.

"It was kind of an interesting journey," recalls Ilya Bukshteyn, SQL Server director of communications. "When we entered this space we were actually tenth in a field of nine."

How times change. Bukshteyn's field of nine has narrowed to three -- IBM, Oracle and Microsoft. SQL Server leads all products in both unit sales and year-over-year revenue growth, though it trails in total revenue due to a sharply lower price tag. Now with SQL Server 2005, the company has set its sights higher, challenging Oracle and IBM with a product that can scale to multiple terabytes, while aggressively integrating with the Microsoft stack.

Timing Is Everything
The database formerly known as Yukon may be almost two years overdue, but Yankee Group research fellow Laura DiDio says the software could be arriving just in time. She points to an August survey that indicates that 48 percent of businesses are on a four to six year replacement cycle for Windows database software.

"We're on the precipice in the next 12 to 15 months of a very, very large mass migration. A lot of people last did a major overhaul of their networks back in 1999, back before year 2000," says DiDio, who describes SQL Server as "well positioned."

Perhaps most surprising is that SQL Server 2005 arrives with a serious head of steam. According to IDC, SQL Server 2000 was the fastest growing database system in 2004, with sales rising 22 percent to just over $2 billion.

That performance has helped firmly entrench Microsoft near the top of the database market, says Carl Olofson, research director for Information Management and Data Integration Software at research firm IDC. His research shows Microsoft capturing 13.4 percent of the database revenue pie. That's a far cry from 2000, when Microsoft clung to 6.7 percent of the market on $840 million in sales.

The timing may also be right for Microsoft to make a serious run at Oracle, says DiDio. "Oracle might be a little softer and more vulnerable to competition, because of the very bloody and protracted battle to buy PeopleSoft and then Siebel."

"I think we're fully engaged," responds Mark Townsend, senior vice president of database product marketing at Oracle. "As a database guy, I would welcome a little distraction."

Alan Zeichick, editorial director of SD Times, contends that even a distracted Oracle is a capable opponent: "I think [it's] massively distracted, but I don't think [it's] ceding anything. [It] continues to pound away, [it] keeps adding new features and adding to the API within Oracle."

Chutes and Ladders
The SQL Server 2005 launch has made one thing abundantly clear: database competition is no longer about high-end and low-end. SQL Server 2005 covers the entire waterfront, from multi-terabyte data warehousing applications to hobbyist projects based on freely available tools.

The SQL Server 2005 family includes four variants: Enterprise Edition, Standard Edition, Workgroup Edition and Express Edition. New to the family are the Workgroup and Express Edition flavors, tailored for departmental and other less demanding environments. The free Express Edition is designed to help fend off increasingly capable open source database offerings, including MySQL 5.0, which was released in October. Oracle recently announced a similar no-cost offering, Oracle 10g Express Edition.

But it's at the high end where Microsoft must prove its mettle. Richard Winter, president of database research firm Winter Corp., says Microsoft is making strides, as evidenced by SQL Server's increasing presence on Winter Corp.'s TopTen database program. But he says the company has a ways to go. "Microsoft is now present in the survey in the range of one to 20TB approximately, but the biggest database is ten times that size," Winter says.

Zeichick argues that the tightly integrated SQL Server stack -- the focus of much of attention in this release -- could work against Microsoft at the data center level. "BizTalk, Visual Studio, Exchange, SharePoint -- you put it all together and it's one big log -- a black box if you will. Big enterprises don't think that way. They really want that n-tiered approach."

Microsoft has plenty of experience scaling technology to the enterprise, but Winter warns that the climb up the database ladder may be more difficult than what the company faced with Windows. Microsoft may have found that out when it was forced to forego clustering functionality in the initial release of SQL Server 2005. The delay leaves IBM DB2 and Oracle 10g with some breathing room when selling into highly scaled environments. Microsoft expects to add clustering in a future release.

Squeeze Play
Even as SQL Server 2005 guns for new heights, Microsoft must defend against burgeoning threats at the low end. Open source databases like MySQL and PostgreSQL have grown increasingly capable and sophisticated, while growing adoption of Linux has compounded the challenge.

"They are progressing and they have a kind of disruptive effect on the market," says Olofson of open source database products. "They can kind of work up the stack with a different revenue and cost structure, if you will, than the large vendors have."

MySQL 5.0, for instance, went to production in October and now offers critical features like triggers and stored functions, as well as expanded compatibility and improved security. Microsoft's response has been SQL Server 2005 Express Edition, a limited version of the database available for free download. Express Edition offers many of the integration hooks that make the full product so attractive to mid-range deployments, but caps database size at 4GB. Oracle and IBM each offer Express versions of their database products as well.

As SQL Server 2005 matures, Olofson says IBM and Oracle can no longer count on customers migrating to their databases from SQL Server. That makes preserving what Olofson calls the "on ramp" of young developers all the more critical. "They want to give them some alternative to put them on an Oracle track instead of on a Microsoft track," says Olofson.

Now Microsoft, facing low-end competition from open source alternatives, finds itself doing the same thing.

Of course, SQL Server is married to one inescapable part of the Microsoft stack -- the Windows operating system. That means the company must also contend with the increasingly capable Linux platform. Winter Corp. surveys reveal that Linux, which barely registered in the TopTen program in 2003, is becoming a fixture on the list. The largest Linux data warehouse, a 24.8 TB Oracle-based deployment for Amazon.com, is 27 percent larger than the top-ranked Windows-based deployment.

Just as important, says Winter, Windows and Linux have settled into the same area of the database market. "For servers of a certain scale, the two most popular options are Windows and Linux."

DiDio says Microsoft is doing the right things to combat the Linux threat. The release of SQL Server 2005 Express Edition and deep integration with Visual Studio and BizTalk Server offer a capable bulwark against the emerging threat.

"If you are Microsoft, paranoia when it comes to Linux is a good thing," says DiDio. "You want to shut it down at the fringes. They recognize that they will lose some business to MySQL. They recognize that two of their most powerful competitors in Oracle and IBM have thrown their hats into the Linux ring."

For all that, DiDio says the success of SQL Server 2005 will come down to simple execution.

"At the end of the day, I think 40 percent to 50 percent of Microsoft's installed base will be taking a look at this. A lot will be riding on this first wave. Bugs or early security issues could be devastating."

Michael Desmond is Redmond magazine's editor at large.

Part of the reason SQL Server 2005 took so long to get from code-name "Yukon" to gold code is the tight integration with so much of the rest of the Microsoft software stack. What follows are some of the integration twists and other turns and obstacles that contributed to SQL missing public ship dates in 2003 and 2004 and nearly slipping into 2006.

Trustworthy Computing -- The company-wide security training, security review and code scrub announced in early 2002 pushed back delivery schedules for everything after Windows Server 2003.

SQL Slammer -- A true white knuckle moment for Microsoft. The company was so floored by this January 2003 worm, and customers so damaged and outraged, that executives are still apologizing for it.

Dynamic Systems Initiative -- Requires that Windows Server System products like SQL Server clear a number of integration hurdles involving other Microsoft products.

Springboard -- A Trustworthy Computing-related reassessment of already shipping products for security improvements. The process produced Windows XP SP2 and Windows Server 2003 SP1. SQL Server 2000 was considered for a Springboard service pack.

WinFS -- the SQL Server-based file system for Windows. The on-again, off-again status of this major project seems to have been a distraction in the "Yukon" effort.

Kodiak -- A version of Exchange Server with the signature feature being a SQL Server-based file system. "Kodiak" was eventually killed.

Testing, Testing -- As Microsoft SQL Server gets deployed in more and more mission critical environments, the pressure to ship bug-free code intensifies. The company stepped up with a massive automated testing regimen, complemented by widespread beta and CTP distribution programs. Microsoft IT department has been running SQL Server 2005 in production for a year.

-- S.B.