Today Microsoft announced two new search servers: Microsoft Search Server 2008 and Microsoft Search Server 2008 Express. The interesting one is the Express version, since it's free. (A download is available -- warning: it's beta software, although Microsoft says it's close to final -- at http://www.microsoft.com/enterprisesearch/.) Furthermore, the only difference between it and Search Server is that Search Server can be run on multiple servers for load balancing.
This announcement is a game-changer, in terms of Microsoft's relation to its arch competitor, Google, as well as the market in general. In several calls I had with reporters, I was asked, "Is this Microsoft playing catch up to the Google Search Appliance?" Sort of, but with a twist -- while Microsoft is not offering a search appliance itself, it certainly expects its partners to do so. Interestingly, the Microsoft offering is more nuanced than the Google Search Appliance. The Google appliance pretty much comes in any color you want, as long as it's black. The static nature of the appliance often becomes an issue over time -- at least according to the clients I talk to -- because as they get more sophisticated about search they want to have greater control over the search results. Google has recognized this issue and continues to roll out more tunable knobs as a way to counteract this problem. However, the reality is you have to take the appliance the way Google has configured it.
Microsoft, by depending on partners, can offer an infinitely variable set of appliances: tweaking this knob and adding these connectors before delivering an appliance to a customer. In my view, it will not be long before the market sees a search appliance for law firms or a search appliance for manufacturers, all based on Microsoft Search Server Express. Furthermore, the appliance will be supported by a local partner with a hand you can shake. In my view, this combination of customization and high touch will allow Microsoft to get broader penetration than Google has been able to get with a static appliance and low touch (which, to be fair, is still thousands of installations).
In terms of the market at large, this is Microsoft commoditizing the market, something it has done before. Back in 1998, Microsoft entered the BI market with products such as SQL Server 7 and OLAP Services (now called Analysis Services), going against best-of-breed vendors such as Business Objects and Cognos. While the best-of-breed vendors remain (although Business Objects was just bought by SAP), Microsoft has carved out a good chunk of this market. In 2006, the BI portion of Microsoft's business generated revenue of $480 million and was growing at 28%.
A decade later, Microsoft is doing the same thing with search, offering Microsoft Search Server 2008 Express at the entry level product, as well as a migration path (Microsoft Search Server 2008 for load balancing, and SharePoint Search for SharePoint installations).
This set of products will be a boon to Microsoft partners and SMBs, and be an alternative to enterprises who thought the Google Search Appliance was the only low cost enterprise search solution offered by a major vendor. While even Microsoft admits it will be a long slog getting enterprise search into most businesses, it has taken its first step -- and based on past history, figures slow and steady will win the race.