While Microsoft sweeps the confetti off the floor of its Build event, it may be a good moment to reflect on what it didn't say as much as what it did. Taking the spotlight was AI agent Scout, ready to "understand how work gets done" and "take action without needing to be prompted." The software behemoth's leading database, SQL Server, barely got a mention.

On its own, it may not be a big deal, but Microsoft watchers also noted that long-time SQL Server champion Rohan Kumar left the company in June, while Arun Ulag, president of Azure Data, currently holds the SQL Server remit. He's also responsible for the Fabric analytics and AI platform and a portfolio of open source database services.

Taken together with the news that Microsoft's own terms and conditions allow customers to take SQL Server licenses to AWS's RDS database service without paying twice – thanks to a feature that lets them provide their own SQL Server installation media – the vibe around SQL Server has changed.

"I don't think it is a priority," said Andrew Snodgrass, research vice president of analyst company Directions on Microsoft. "With Kumar leaving, that's become very evident. I think the world of Ulag, but [SQL Server] is not where his focus is for the future. I'm afraid Microsoft are going to leave it languishing."

He said his concerns for Microsoft's flagship DBMS began when the 2022 version was released with a "bunch of Azure integration capabilities that no one was really asking for." It ended up being "more of a marketing release than something that was truly engineered to meet customer needs," Snodgrass said.

While the introduction of vector search in the 2025 edition was welcomed by users, PostgreSQL, MongoDB, and Oracle users had been benefiting from the feature for years.

"At Build, Arun Ulag stood up there and talked about all the new stuff: highlights of the database news there was HorizonDB, a PostgreSQL database service with a new form of scale-out capability," Snodgrass said.

"There was no news about SQL Server, which was stunning, because SQL Server 2025 just came out at the end of last year, and in that they put in AI vector search, which I think is one of the greatest additions to SQL Server I've seen in ten years."

But it seems Microsoft is as interested in its PostgreSQL and other open source database services as it is in its own SQL Server offering. So long as it drives workloads in Azure, it is all good for Microsoft, Snodgrass said.

"It's the kind of thing Dad might say: it's not that I'm angry at Microsoft for what they've done to SQL Server, I'm just disappointed," he said.

A Microsoft spokesperson said: "Customers have real choice in how they run SQL Server, and we've designed our licensing to be clear and flexible across environments. We're fully committed to SQL Server and continuing to invest in its innovation, security, and long-term support so customers can confidently run their most critical workloads and build what's next."

Microsoft first released SQL Server in 1989 as a 16-bit version for the OS/2 operating system, which was a joint project with IBM. Despite challenges from Oracle, open source systems like PostgreSQL and MySQL, as well as a string of NoSQL databases such as MongoDB, it remains highly popular with users and developers. It is third behind Oracle and MySQL – ahead of PostgreSQL – on the DB-Engines ranking, which measures citations, Google data, and job searches. In the Stack Overflow survey of professional developers, it ranks fourth behind PostgreSQL, MySQL, and SQLite, but well ahead of Oracle, which lies in tenth.

Adam Ronthal, vice president analyst at Gartner, said Microsoft's approach to SQL Server can be explained by looking at two different priorities.

First, despite the hype around the cloud and AI, Microsoft made around $15 billion in revenue from the on-prem DBMS market, largely from SQL Server. It's second in terms of market share (33 percent) only to Oracle, which holds nearly 40 percent of the on-prem DBMS market.

"If you look at Microsoft's growth in the on-prem business in 2025, they were growing around 8 percent, so Microsoft continues to have a business in the on-prem that is growing in high single digits," he said.

There is no way that Microsoft will walk away from that kind of revenue, Ronthal told The Register.

Meanwhile, SQL Server customers represent a good opportunity for Microsoft to convert users to Azure SQL, and the SQL database in Fabric, its data analytics environment, as they are built on a consistent database engine. Microsoft wants people to see that Azure provides a seamless path to build and scale AI applications with deeply integrated data services, security, and governance.

However, Ronthal added that specific compatibility would depend on the implementation of T-SQL in the application users want to move.

"As we go full into managed services, I don't have full control over the underlying operating system, and I might not have the same level of control over the configuration of the database itself."

For commercial, off-the-shelf software, the ease of migration would depend on the vendor certification, he said.

As well as wanting to defend its on-prem SQL Server revenue, Microsoft also sees that AI and cloud are driving the market.

In the cloud, the market is dominated by a family of databases based on PostgreSQL or closely related to the open source database.

"The de facto API for relational databases has emerged to be Postgres right now, and so we see many vendors implement wire from compatible Postgres APIs, which provides end users a hedge against lock-in," Ronthal said.

A string of startups have tried to grab this market, including Cockroach Labs, Yugabyte, and pgEdge, all of which offer distributed capabilities and varying compatibility with PostgreSQL. Microsoft cannot ignore this development, hence its investment in HorizonDB, its own distributed PostgreSQL. Microsoft also has the DBaaS offering, Azure Database for PostgreSQL.

As well as defending the growing on-prem database market, Microsoft is trying to capture the higher growth in cloud databases and catch up with AWS.

As such, it is incorporating operational databases under the Fabric umbrella, including NoSQL database Cosmos, Azure SQL, and Postgres capabilities. "If we look at the drivers of the market right now, which are cloud and AI – Fabric is a core component of AI – then the growth for Microsoft is largely going to be driven by Fabric adoption, where they're putting a tremendous amount of focus and effort," Ronthal said.

Nonetheless, Microsoft has deep enough pockets in terms of engineering budget to afford to battle it out on both fronts. In that sense, SQL Server workloads that end up on AWS still make sense.

"Microsoft has some rationalization to do in the portfolio, because there are multiple ways to run SQL Server," Ronthal said. "You've got Azure SQL, managed instances, SQL Server in VMs. These provide slightly different levels of compatibility with what you might be doing in the on-prem world, and right now, the fact that there are multiple options actually makes it difficult for end users to figure out what to do. I would love to see Microsoft make it more unified and easier for people to consume."

In the cloud DBMS market, AWS has the upper hand by a considerable margin. In 2025, AWS made about $37 billion in cloud DBMS revenue, according to Gartner, while Microsoft made about $18.3 billion.

If a SQL Server customer can leverage an existing investment in Microsoft and bring it to AWS, Microsoft loses that business for Azure, "but on the plus side, they don't lose a SQL Server customer, and that's probably more important," Ronthal said.

Of the leading vendors – Oracle, IBM, Microsoft, and SAP – only Microsoft has grown their market share in the last 15 years, Ronthal pointed out. Microsoft has proved capable of riding out changes in the market with both its cloud services and SQL Server strategy. Whether that's also good for SQL Server customers might be up for debate, but since support for the 2025 version ends in 2036, they have plenty of time to plan. ®