Let There Be Light

To shed some light on this issue, the CRN Test Center decided to conduct a database review with the goal of navigating the labyrinth of pricing schemes and support programs to see where solution providers of all sizes and expertise levels might find the best database deals. What we found was surprising.

We're all used to thinking of Microsoft as the Goliath in any David and Goliath matchup. But in databases, the software giant has always been the underdog. The rap is that Microsoft SQL Server can't scale so it's not a true contender in the enterprise market. However, our review did not support the conventional wisdom. We found that Microsoft SQL Server's Enterprise Edition, which includes clustering capability, helped it considerably toward achieving an overwhelming victory over Oracle, IBM, Sybase and InterSystems.

But the Microsoft enterprise surprise is just part of the story.

As any solution provider knows, it is vitally important, when implementing a database for a client, to focus on requirements such as sufficient processor speed, thorough data management practices and strong planning and development procedures. Yet the key to achieving maximum margin on a database project always lies in hammering out the best possible deal with a vendor. To see how that could be achieved, the Test Center created a mock RFP and sent it to five of the top database vendors, asking them to price an entire solution.

We divided the RFP into two fixed-price projects. The first was tailored to solution providers that regularly target small businesses,those with 50 or fewer employees. Demand requirements on the database application and server would be minimal. The solution provider would rewrite the customer's legacy application in Microsoft FoxPro, a proven database system found in many midsize companies, and then migrate it to a relational database.

The second project targeted midsize and enterprise companies with up to 6,000 concurrent users accessing the database. The solution also had to support natural-language search queries and clustering, and include 24x7 support. Each database vendor was asked to recommend various configurations based on the requirements in the RFP, answer follow-up questions regarding support programs for partners and developers, and discuss the reasons why a solution provider would want to become its partner.

The results were like hammer blows to Microsoft's competitors.

Microsoft bested IBM on technical support and sales support. On price, Microsoft blew away Oracle, which was competitive on the smaller project but too expensive and inflexible on the larger one.

Microsoft outmaneuvered Sybase's deep discounts with its depth in training, offering one of the most diverse and extensive training programs in the industry.

It was also Microsoft's mature training program, coupled with a more competitive price structure, that pushed it well ahead of InterSystems, which had a good channel strategy but also had a pricing structure that,even with discounts,wasn't suitable for the high user connection required by the RFP.

Of all the vendors reviewed, Microsoft provided the most technical material and offered the most technical courses. The vendor further distinguished itself with its flexible license-per-processor pricing scheme and variety of maintenance support options.

Factoring in all the requirements of the RFP, Microsoft emerged the overall winner for both projects.

ORACLE
Oracle9i was considered to be the most complex product to deploy because of the amount of enhancement packs needed to satisfy the larger of the RFP's two projects. The company suggested deploying the initial project on a single server running the 9i Standard Edition but didn't specify how many processors were needed for either project. Test Center engineers estimated the number of processors required based on maximum concurrent connections and the data pooling needed to process business logic.

Oracle was the only vendor to offer script-based tools specifically designed to migrate a FoxPro database environment to Oracle. The tools help speed up the development effort.

The 9i Standard Edition costs $15,000 per processor, and the company charged the solution provider an additional 7 percent for standard yearly maintenance support. The total price using a two-processor server was $32,100.

For the larger project, Oracle advised adding the clusters, partitioning, diagnostics, tuning and change management packs to the Enterprise Edition. Each pack was sold on a per-processor basis, costing an average of $546 per processor. Oracle also offered the solution provider a 10 percent discount on the sale price of the larger solution. Still, the price came to a whopping $321,530,about $130,000 more than the second-most-expensive solution,using only a four-processor server with the discount. Oracle would not release margin information.

Oracle recommends presales classes and provides them for free as long as the solution provider becomes a partner. The company also encourages newcomers to take three courses on administration fundamentals. The total cost of those courses is $6,500.

IBM
For the smaller project, IBM recommended a four-processor Intel-based system using DB2's UDB Workgroup 8.1 Edition. Solution providers receive a 5 percent discount on the total price and, through the Top Contributor Initiative (TCI) co-marketing program, could be eligible for margins of up to 18 percent. In addition, solution providers receive a 5 percent co-marketing reward with a 50 percent accrual of all future sales. The discount percentage also increases with each purchase. Yearly database maintenance costs were 12.5 percent of the total discounted price.

DB2 8.1 includes a standard search engine available in the developer's version but doesn't include a natural-language search algorithm engine. Instead, it sells a separate search product, DB2 Net Search Extender, which costs $5,000 per processor and performs free-text, fuzzy and proximity searches. It also is capable of maintaining text in memory for fast searches and can be used for thesaurus-like searches of structured documents. Net Search Extender was included in the price of the larger project.

IBM's maintenance plan includes authorization to sell new DB2 releases; access to technical, installation and code-related support; and 24x7 emergency support. A dedicated manager is also assigned to the account. IBM also offers various levels of implementation support. The total price for the smaller project, including discounts and the maintenance plan, came to $32,062.50.

For the larger project, IBM recommended DB2 Enterprise Server Edition running on an eight-processor Intel-based system. The company provided a deeper discount of 15 percent and offered a total price of $191,250, which included the same basic yearly maintenance plan as the smaller solution. The type of OS on which the database is deployed does not affect the price, IBM said.

Of the five vendors reviewed, IBM offered one of most comprehensive technical training programs. The company offers a full variety of how-to manuals for every expertise level, including practical tips on deployment and development. IBM also discounts up to 25 percent of its technical and sales training courses for TCI members. There is no licensing agreement required for membership.

For an additional purchase of $2,000 worth of training through the DB2 certification program, solution providers are refunded the cost of a course if they pass. The $2,000 also entitles solution providers to various implementation support programs, including technical mentoring and Web-based solution development.

MICROSOFT
Microsoft did not recommend specific hardware for either project, saying that many Intel-based vendors have SQL Server sizing programs online. Microsoft's Web site also offers white-paper guidelines to help solution providers decide which server to purchase.

SQL Server 2000 offers English-like queries for searching as a standard feature, so no additional tool purchases are required. Of the two pricing schemes offered by Microsoft, the Test Center found its license-per-processor plan to be the most flexible, since the maximum number of simultaneous connections was left as an approximation in both projects. For the SQL Server Standard Edition, Microsoft charges $4,780 per processor. Microsoft did not recommend its Enterprise Edition for the second project, saying that the standard edition would suffice. But because of the Enterprise Edition's failover clustering capabilities and the possibility of large connection demand from users, Microsoft offered it as an alternative. Its price per processor was $17,279. Both prices do not include support or licensing maintenance.

Microsoft's yearly software licensing maintenance is 25 percent of the total price of the product. Solution providers have a variety of maintenance support options, from per-incident programs to a premier 24x7 connection to an account manager. With a dedicated account manager, all issues are tracked and escalated, and most development problems are resolved over the phone, according to the company. Microsoft does not offer a standard pricing scheme, since the configuration of the maintenance packages vary widely. But sizing a deployment with an eight-processor server and the Enterprise Edition with just the licensing maintenance would cost $172,790.

Unfortunately, Microsoft did not disclose margins on SQL Server, citing a new policy to not release any information regarding SQL Server margins.

Microsoft outstripped the other vendors in the number of technical courses and the vast variety of technical material it offers solution providers.

The courses range from a one-day session for $99 to five-day courses costing between $1,000 and $5,000. Exams cost about $100 each. Solution providers can earn certifications in administration and database development. Microsoft also offers online seminars and workshops at no additional cost and has perhaps the largest Web site of technical material of all of the vendors reviewed.

Microsoft also offers a number of technology centers to help partners architect their solutions. Solution providers can either pay for the technology center tests, or Microsoft will foot part of the bill if the solution provider engages with the company in a joint sales effort.

SYBASE
For the initial project, Sybase suggested a single server, two-processor solution, driven by its Adaptive Server Enterprise (ASE) edition. On the larger project, Sybase recommended a two-node, four-processor system with a cluster high-availability option. The solution provider was required to purchase an Internet-access license per processor for $4,500. The Internet license covers an unlimited number of external clients.

Sybase charges $745 for a single-server license and $145 for every concurrent user connection. The user-connection price was based on the deal the solution provider made for the two projects combined.

Sybase charged about 14.5 percent of the total cost for one year of maintenance support. The company also gives solution providers discounts of up to 50 percent on additional post-implementation technical support if their customers require it.

Sybase offered the solution provider a margin range of 30 percent for the first project. For implementations with more than 400 concurrent users, the margin can reach 40 percent. Volume purchases can be discounted by as much as 15 percent. Sybase offers other discounts between 30 percent and 35 percent, as well as volume curve discounts.

Using the same software for both projects reduced the overall project cost by more than $11,000. For this RFP, Sybase provided purchase discounts on the cluster solution of up to 10 percent and a partner discount of 30 percent, reducing the total for the first project to $11,231. Sybase's price for the larger solution was the lowest among all of the vendors, coming in at $136,105.

INTERSYSTEMS
Although not known as a database heavyweight, InterSystems' Cache offers a unique database engine and development platform that deserves the attention of solution providers. Because its engine uses a very efficient storage model, InterSystems said hardware recommendations would not play a major factor but suggested that a two-processor server delivers an adequate solution based on the two projects proposed.

For the first project, InterSystems recommended a 50 concurrent single user license at a price of $305 per user. One year of maintenance came to $3,354 and included new product releases and 24x7 technical support over the phone.

The second project required an enterprise multiuser license costing $825 per user. A trade of the initial license agreement reduces the price to $520 per user for the first 50 concurrent users. Because of the large number of connections required in the second project, InterSystems' price exceeded that of all of the other vendors by about a factor of 10, making the solution more suitable for smaller projects. The company said large-scale projects are priced on a per-deal basis and declined to disclose the total.

InterSystems, which boasts an aggressive channel program, was the most forthcoming regarding margins for the smaller project. Solution providers earn discounts of between 24 percent and 40 percent for sales ranging from less than $50,000 to more than $4 million. Discounts on technical assistance range from 50 percent to 65 percent. This year, the company is offering a one-year full refund on a license if a solution provider can't successfully deploy a Cache application.