Microsoft Eyes a Bigger Share of the Software Space

How SQL Server’s availability on Linux has increased its appeal

In this series, we’ve covered various aspects of Microsoft’s (MSFT) recent announcement that it will bring its SQL Server to Linux. Al Gillen, enterprise infrastructure vice president at International Data Corporation, said, “This gives customers choice and reduces the concerns for lock-in.”

Gillen also believes that this announcement by Microsoft will go a long way toward accelerating SQL Server adoption. With SQL Server on Linux, there’s a strong possibility that companies will prefer to pay for SQL Server licenses, as they will now be able to run SQL Server on Linux without having to pay for both an SQL Server license and a Windows Server license.

Microsoft Eyes a Bigger Share of the Software Space

According to Merv Adrian, vice president of research at Gartner, SQL Server will find a preference, as it has data analysis abilities that are lacking in its peers’ offerings.

Emergence of open source has made leading tech players alter their strategies

Enterprise application software has been one of the most profitable sectors for Microsoft. Microsoft, IBM (IBM), Oracle (ORCL), and SAP (SAP) have held leadership positions in Gartner’s Magic Quadrant for Operational Database Management Systems for years.

However, Gartner stated that open-source database management systems have “entered into full market productivity and reached at least 25 percent of the target market.” Approximately half of DB-Engines’ ten most popular databases are open source: MySQL, MongoDB, Postgres, Cassandra, and Redis.

The growing prominence of open-source databases such as MongoDB and DataStax in Gartner’s Magic Quadrant has posed a threat to these leaders’ dominance and made them rethink their strategies.

Investors who wish to gain exposure to Microsoft could consider investing in the SPDR S&P 500 ETF (SPY). While SPY invests ~2.4% of its holdings in Microsoft, it also has an exposure of ~8% to application software.