Oracle plans to release a free version of its database by year-end in a move 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 independent software vendors (ISV), Oracle said.

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 4G bytes of data and 1G byte 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-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 noted. 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 IDG News Service is a Network World affiliate.