There have been various comments floating around about Microsoft's announcement of spatial support for SQL Server, ranging from great excitement to extreme skepticism. I have known about this for a while under NDA, and I think it is an important step for the industry. While Oracle Spatial has been out for 12 years so Microsoft has quite a bit of catching up to do, many of the recent Oracle developments have been focused beyond pure "spatial database" functionality, and more into functionality that was previously the domain of the GIS vendors, such as spatial analysis and mapping - I think that Microsoft should be able to provide core database functionality relatively quickly. It will be good for the industry for Oracle to have some more serious competition within the commercial database world, in regard to spatial. It really reinforces the trend that everyone has been talking about of geospatial data becoming mainstream, now that the top two commercial database vendors will both support spatial. The fact that Microsoft has an offering both in the space of the new disruptive online mapping offerings, with extensive packaged data (like Google and Microsoft) and in the database (like Oracle, which does not have an offering in the former space), opens up some interesting possibilities for them to offer solutions leveraging both aspects. I think that geospatial technology has much higher visibility at high levels in Microsoft than at Oracle (driven by Virtual Earth) - I talked more about this in an article at Geoplace.
So Microsoft will need to follow through on the announcement, and has plenty to do to catch up with Oracle and the various open source spatial database offerings, but it's another important step in terms of geospatial really being a major area for Microsoft.