Microsoft moves into the Enterprise with Enterprise pricing

Get ready for some sticker shock. It was assumed that Microsoft would enter the Enterprise market with prices that resembled their rock-bottom PC products pricing. In fact, many analysts have suggested that Microsoft's eventual domination of the Enterprise market would occur because of their price superiority, not necessarily their technical superiority.

Well, Microsoft is going to have to be plain "better" at these prices. The company announced pricing this week for their upcoming Enterprise tools and it isn't pretty. The Enterprise editions of Windows NT Server 4.0 and SQL Server 6.5 will cost a hefty $11,998 each. That's over five times higher than the costly implementations of the current versions. A two-node NT/Enterprise cluster will cost almost $24,000.

Microsoft officials are quick to point out that these prices are tentative and subject to change. Still, the prices are going to make many companies start shopping around. With Microsoft raising prices this high, other vendors may jump on the bandwagon to take advantage of the higher margins. Unfortunately, this may have an effect they weren't expecting: it could drive UNIX sales higher. Furthermore, while NT sales are strong, SQL Server has never sold well when compared to other database management systems such as those sold by Oracle, which dominate the market. If Microsoft hopes to dominate the high-end, they're going to need to bring more advantages to the table. Price would be a big one.

Microsoft is aware of this, apparently. "We can't go to customers with a 5% difference \[in price between NT Server and UNIX \]," said Rich Tong, a Vice President of Marketing at Microsft. "Believe me, \[NT/Enterprise\] will still be the 'meal deal' of the century."

UNIX vendors can barely contain their glee. "This blows any claim that NT is cheaper than Solaris out of the water," says Brian Croll, a director of server software products at Sun Microsystems. "Microsoft's coming out with Lexus prices, but they're selling a Toyota.

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