SAN FRANCISCO -- Microsoft ( MSFT) CEO Steve Ballmer kicked off the launch of his company's long-delayed new database product Monday, touting its ability to serve large and small customers alike and to integrate with the software behemoth's other flagship products.

In his speech at the Moscone Convention Center, Ballmer wasn't shy about his wish that the new offering will steal business away from database giant Oracle ( ORCL).

"Today we should be able to convince you no job is too big to run on Microsoft," said Ballmer, who apologized for a packing snafu that resulted in him wearing a dark suit and red tie -- a fashion faux pas, given that the event also featured the launch of Microsoft's Visual Studio 2005 tools for typically dressed-down developers.

Over and over again, Ballmer stressed the ability of Microsoft's database to serve large customers and mission-critical applications -- a sweet spot for Oracle and an area that some analysts have doubted that Microsoft could penetrate. Microsoft cited Barnes & Noble ( BKS) booksellers using the SQL Server database to create a massive inventory database, and British music retailer HMV using it to help create an online music store.

Microsoft promised the ability to process more transactions per second with its platform than with one using Oracle and Linux. In addition, Microsoft launched a campaign with SAP ( SAP) to take market share away from Oracle -- something that is now even more in the German applications giant's interest, since Oracle acquired PeopleSoft to become a even bigger presence in SAP's market.

As evidence of its ability to serve a major enterprise, Microsoft noted an implementation of SAP applications on a Microsoft SQL Server database with 93,000 concurrent users. More than 20,000 customers run SAP applications on top of SQL Server, Ballmer said.

Meanwhile, Ballmer emphasized Microsoft's partners on the hardware side with a cameo from Intel ( INTC) CEO Paul Otellini, who showed off servers running SQL Server from manufacturers such as Hitachi and Dell ( DELL).

Microsoft also demonstrated how its latest database works more seamlessly with its other software products.

In a demo, Microsoft showed how the next version of its flagship Office product will be able to get "live data" from the database and plug that information into an Excel spreadsheet. Similarly, Microsoft's Dynamics customer-relationship management applications for small and medium-sized businesses will be able to easily connect to SQL Server databases to create marketing campaigns.

Analysts and investors generally view the next versions of Office and Windows, called Office 12 and Vista respectively, coming late next year as more important drivers of growth for Microsoft. But the developer tools and database, whose debut came after some delay, are important in creating an entire Microsoft platform in which the company maintains that the whole is greater than the sum of the parts.

Ballmer cited statistics from research firm IDC showing that Microsoft led the database market in 2004 with 406,000 units sold, compared with 245,000 from Oracle and 72,000 from IBM ( IBM). By new license revenue, however, the research firm Gartner has estimated that Oracle and IBM lead with one-third of the market, trailed by Microsoft with 20%.

Of course, part of that discrepancy may lay in the fact that Microsoft has been known to offer a less expensive database. The company is offering steep discounts to customers who switch from Oracle databases, and it gave away a complimentary version of SQL Server 2005 and Visual Studio 2005 to the nearly 3,000 people who attended the San Francisco event, which was kicked off with a deafening song from Cheap Trick.

In keeping with its roots at the consumer level, Microsoft also announced a free edition of SQL Server as well as a cheaper version of its developer tools -- both called express editions -- for $49, available for download from the Internet.

Shares of Microsoft recently rose 30 cents, or 1.1%, to $26.96.

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