The Empire Strikes Back

In December 2003 ("The Threat from Below," InstantDoc ID 40689), I pointed out the need for Microsoft to address the growing presence of open-source databases, especially in the low end of the database market. I noted that Microsoft's push to drive SQL Server higher into the enterprise had caused the company to focus on big business–oriented features and leave the small and medium business (SMB) market behind. I argued that Microsoft would cede the low end of the database market to "free" open-source databases unless it produced a new low-cost version of SQL Server.

Naturally, not everyone agreed with me; some argued that between SQL Server Standard Edition and MSDE, Microsoft had the low end covered. However, Microsoft seems to be on my side this time. With SQL Server 2005, Microsoft will release the SQL Server 2005 Workgroup edition, which targets the low end of the market.

In all, Microsoft will release five editions of SQL Server 2005:

Like their SQL Server 2000 counterparts, the Standard and Enterprise Editions are aimed at medium and large business and include business intelligence (BI) features such as Integration Services, Analysis Services, and Reporting Services. SQL Server Express is targeted toward developers, and the SQL Server Workgroup Edition targets small business. Both the Express and Workgroup editions have only the relational database engine, not the BI features. You can find a list of the differences between the SQL Server 2005 editions at http://www.microsoft.com/sql/2005/productinfo/sql2005features.asp.

Other publications have criticized Microsoft's pricing of SQL Server 2005, especially the CAL pricing, by claiming that the higher CAL price for SQL Server 2005 Standard and Enterprise editions is double- dipping and penalizes users of those versions, but nothing could be further off-base. Microsoft's lower pricing for the Workgroup edition and its CALs reflect both Workgroup's orientation to the SMB market and the fact that the product doesn't possess the advanced functionality that the Standard and Enterprise editions have. This isn't double-dipping. It's Microsoft's recognition that there's no justification to charge Workgroup users the same price as Standard and Enterprise users for a lower level of functionality. If you're confused about CALs, I can tell you that you don't need to repurchase CALs if the business later upgrades from the Workgroup edition to the Standard edition. Microsoft will let you upgrade the Workgroup CALs to full SQL Server CALs. And if you opt for per-CPU licensing, the CAL difference is moot.

With SQL Server 2005 Workgroup, Microsoft has shown that it isn't ready to give away the low-end database market. However, I think the SQL Server 2005 Workgroup edition is still priced too high to stop the spread of open-source databases such as MySQL and PostgreSQL. Their lower cost and lack of CALs will appeal to small businesses. But the Workgroup edition is a step in the right direction. The feature set is right, and it gives Microsoft an entry into the low-end database playing field.