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Oracle Posts Double-Digit Price Hikes For Database, Middleware Products


By Rick Whiting, ChannelWeb
3:02 PM EDT Mon. Jun. 23, 2008
Oracle has hiked prices between 10 and 20 percent or more for many of its core software products, including its flagship database, middleware and application software.

News of the price increases first leaked last week in a research note from Citigroup analyst Brent Thill and are analyzed further in a report from Forrester Research slated for release this week. An Oracle spokeswoman said the company would not comment on the price hikes.

Oracle is scheduled to report fourth-quarter and year-end financial results this Wednesday and the price increases are likely to be a topic of discussion during a conference call between Oracle executives and Wall Street analysts.

"We have not witnessed a price lift of this magnitude for many years," Thill wrote in a note to investor clients. The price increases are particularly surprising coming during an economic slowdown when many businesses are closely scrutinizing their IT budgets.

The Forrester report, written by analyst R. "Ray" Wang, said Oracle updated its price lists and software investment guide last week. Some applications previously priced at $3,995 are now listed at $4,595 -- up 13.1 percent -- while database software prices increased 18.75 percent from $40,000 to $47,500 per CPU. Other prices increased approximately 15 percent, according to Wang's report.

The price for BEA's WebLogic application server is now $25,000 per CPU, up 47.1 percent from its $17,000-per-CPU price prior to Oracle's $6.7 billion acquisition of the middleware software vendor in April.

The Forrester report notes that Oracle provides a single global price list for its products, unlike other vendors that price products by country or region to account for currency fluctuations, and the price increases may be an attempt to make up for the devalued U.S. dollar. That devaluation, in effect, provided customers paying in Euros and other currencies with a 30 to 35 percent discount, the report said.

Oracle CEO Larry Ellison has long made clear his goal of dominating the database, middleware and application software markets and the company has acquired more than 40 companies in a little more than four years toward that end. Today the company said it is buying Skywire Software, a developer of software for the insurance industry and document management applications.

Some industry observers have worried that the acquisitions could give Oracle a near-monopoly in some markets. The Forrester report says the price increase for BEA WebLogic could reflect Oracle's dominant position in the application server market.

The Forrester report also says Oracle has cut the minimum number of named users required for purchasing its business intelligence products from 79 to 25, a move that will make the product more attractive to small and midsize businesses.


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