Oracle Bends (A Bit) On Multi-Core Licensing

multi-core CPUs

Whereas the company had previously counted each core as a full processor, it will now count each core of a multi-core chip as three-quarters of a processor.

That would mean that Oracle 10g Enterprise Edition database running on a four-way server with dual-core processors which had listed for $320,000 (four times two cores times $40,000) will now list for $240,000 (or 0.75 times 8 cores times $40,000 per core), according to sources.

Oracle would not comment but partners have long said the company had to respond to competitive challenges issued by database rivals. Both Microsoft and IBM have already made licensing concessions for the new world enabled by multi-core chips from both AMD and Intel.

Sources said the new model kicks in as of July 8.

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Last October, Microsoft announced it would charge for SQL Server licenses by the processor, not by that processor's component cores. In April, IBM followed suit, saying that for X86 multi-core chips and lower end PowerOpen chips, it would likewise charge by the processor, not core. (For higher-end Power4, Power4+ and Power5 CPUs, however, IBM said it would charge for "two processors worth of performance". The rationale for was that the higher end chips are optimized to provide far more performance per core that can be fully exploited.)

Up until now, Oracle has stuck to its contention that each core is basically a processor into and of itself and charged accordingly. Clearly that is a huge pricing issue when the enterprise database goes for $40,000 per CPU and the Standard Edition for $15,000 per CPU, observers said.

The basic problem with Oracle's reasoning, even its own partners said, is that a two-core CPU does not actually give the user double the compute capacity.

Oracle partners were excited to hear the news. "This is a very important move and it will be interesting to see how customers react," said one West Coast Oracle partner.

Another long-time integrator reacted with laughter. "Holy [expletive]! We're back to UPUs!" he exclaimed, referring to Oracle's widely criticized Universal Power Units, a past model which ratcheted up database price based on the speed of the underlying CPU.

Ron Zapar, CEO of Chicago-based Re-quest, a longtime Oracle partner said this move is in the right direction. "We've had pushback from our customer base already around the current pricing strategy where a single processor that is dual-core equals a two-processor license for Oracle. This is a step in the right direction but they'll have to do better."

This news comes just after Monday's release of Oracle 10g Release 2 database. All the database SKUs are now generally available on Red Hat Enterprise Linux 3.0 with Windows, Unix, and other Linux versions due in 30 to 90 days, the company said.