Positioning itself to better compete in a crowded database market, Microsoft has introduced a new low-cost edition of SQL Server 2000, and outlined its product plans for the upcoming 2005 upgrade. Offered at $3,899 per processor or $739 per server with five users, SQL Server Workgroup comes in at $2,000 less than Standard Edition.

SQL Server Workgroup is targeted at small businesses and sits between the no-cost Microsoft Database Engine and SQL Server Standard. Starting with SQL Server 2005, MSDE will be branded Express Edition while remaining free. Enterprise Edition, meanwhile, includes a complete database analysis platform for $24,999 per processor or $13,499 per server with 25 users.

"The industry has changed since we introduced SQL Server 2000. With the new SQL Server 2005 product line, we've increased the breadth of our data management solutions to offer more choices to customers," said Paul Flessner, senior vice president of Server Applications at Microsoft.

Microsoft's database moves come in the wake of increased competition from ever-improving open source offerings such as MySQL, as well as lower cost enterprise products from rivals IBM and Oracle.

To this end, Microsoft has signed on Dell to prepackage both SQL Server 2000 Workgroup and its upcoming SQL Server 2005 line with its PowerEdge servers.

The new SQL Server Workgroup Edition supports systems with up to two processors and 2GB of RAM. Unlimited databases and limited replication features are also supported. "Our goal is to make enterprise-class data management and analysis affordable to a wide range of customers," said Flessner.