Oracle plans to release a free version of its database in an attempt to compete more effectively at the low end of the market.

Oracle released a beta version of the product, called Oracle Database 10g Express Edition, on Friday for 32-bit Windows and Linux systems. The software can be downloaded free for development and limited production use. It can also be distributed free with third-party products from ISVs.

The company hopes to attract new users to its software by offering them a free "starter database" for development and deployment purposes, Oracle said. Along with developers it wants to attract more ISVs, educators and students.

Production use comes with restrictions. The database is limited to use with 4GB of data and 1GB of RAM and can be used on only one processor per server, Oracle said. The same conditions apply for use by ISVs. Support is offered by way of an online forum for users.

The product is built on the same code base as Oracle's existing 10g databases but with some options removed, so applications will run unchanged on Oracle's higher-end databases, according to Tim Payne, Oracle vice president of technology marketing for Europe, the Middle East and Africa.

The company hopes users will try out the free version and then upgrade to a paid Oracle product if their data management needs outgrow its capacity.

"We're finding customers out there who haven't considered Oracle in the past, and who have these kinds of low-end requirements," Payne said.

Oracle plans to ship the final version of the database by year's end, he said.

Oracle leads the relational database market with its main rival, IBM. But Microsoft's SQL Server has been gaining ground quickly, according to analysts, and momentum is also building behind open-source products from MySQL and others.

Oracle released the free product to attract new developers and to shore up its business at "the low-end corporate database market," particularly against Microsoft, according to Donald Feinberg, a vice president and distinguished analyst with Gartner.

Microsoft is about to release its SQL Server 2005 upgrade, he said. The 2005 family includes a low-end database called SQL Server Express that, like Oracle's 10g Express, is free for limited production use. Oracle now has an alternative for customers considering SQL Server Express, Feinberg said.

The product could also help fend off a potential challenge from MySQL. The company is not a big threat to Oracle today but its software improves with each new release, said Andy Hayler, founder and chief strategist with Kalido, which makes data warehousing and master data management products for Oracle and other databases.

Just last week MySQL released an upgrade that adds several important features for enterprise use, including triggers, views and stored procedures, and said it hopes to earn a bigger slice of the enterprise market.

"Oracle is starting to get troubled by MySQL," Hayler said. "In a way it has been for some time, it's just been in denial."

One big difference is that MySQL's source code is freely available, he noted, while Oracle's is not. That's an advantage for MySQL, according to Hayler, because developers like to be able to submit bugs to mailing lists and know that others can work on the problem and post a fix.

Feinberg was less convinced: Few turn to MySQL because the source code is available, he said. "The true open-source community for MySQL is pretty small. It's not like Linux," he said.

More significant, according to Feinberg, is that MySQL's database comes with no deployment restrictions.

"Oracle does not have a free scalable version, and MySQL 5 is in production now and appears to be pretty scalable for some applications," he said.

Oracle has taken steps before that appeared designed to blunt MySQL's progress. Last month it acquired Innobase, a Finnish open-source company that develops the most popular storage engine used with MySQL. Oracle officials said Innobase would continue to work with MySQL, but some saw the move as an attempt to undermine confidence in MySQL.

Oracle's free database may be another step to create FUD - or fear, uncertainty and doubt - in the minds of potential MySQL customers, Feinberg and Hayler said.

"It adds more FUD to the whole question of Oracle versus MySQL," Feinberg said.