Venture-backed DATAllegro has had its products on the market since 2003. Its approach is to a distribute data across multiple servers and then run database queries in parallel. That was combined with hardware and storage in what's known as a data warehousing appliance.

Microsoft already has server software for data warehousing and storage. It's called SQL Server and it recently launched a new version. DATAllegro, will "take our data platform to the highest scale of data warehousing," Ted Kummert, the Microsoft executive in charge of data storage, said in a statement.

DATAllegro's appliances can handle capacities of "hundreds of terabytes on a single system," Microsoft said, compared with 25 or fewer terabytes of storage for many warehousing appliances.

Per a spokesman, Microsoft plans to retain "most" of DATAllegro's employees. The company will keep its headquarters and continue work on its technology. It will show up in a future version of SQL Server.

Bob Muglia, senior vice president of Microsoft's Server and Tools business, is addressing the audience at the company's Financial Analyst Meeting now. I'll update this post if he has anything to add about DATAllegro.

Update, 1:53 p.m.: Muglia said DATAllegro will help Microsoft compete with Oracle for the highest-end enterprise data storage customers. "We've never been able to do that before," he said. DATAllegro will allow Microsoft to offer storage capacity "well beyond what Oracle is able to do today."