Update: Oracle Confirms Licensing Change For Multi-Core Chips

As of July 8, each core of new multi-core AMD or Intel processors will be licensed as if it were 75 percent of a CPU. CRN broke the news of the change on Wednesday.

Oracle pricing and licensing guru Jacqueline Woods said the company had been working on tweaks for months to reflect the reality of new, more compute-intensive CPUs that basically pack multiple chip capabilities on a single processor.

Up until now, Redwood Shores, Calif.-based Oracle had counted each core as a separate CPU and charged accordingly. Thus a four-way dual-core server running Oracle 10g Enterprise Edition at $40,000 per CPU had been $320,000 and will now be $240,000.

Woods will host a teleconference on the changes on Friday morning.

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Several Oracle partners said customers who bought Oracle wares in the most recent fourth fiscal quarter might not be too happy to learn about what amounts to a discount.

Woods discounted those claims. "We've been working with customers for several months. We were already considering this [move] and accounted for it in our discounts," said Woods, vice president of Oracle's global pricing and licensing strategy.

What most customers and partners had been saying is that a two-core CPU does not really double compute performance and they thus didn't want to pay double for it. Several partners predicted Oracle would do what it has done, count each core as a partial CPU. They also said that would not be enough.

Last October, database rival Microsoft said it would count each processor as one CPU regardless of cores. At that time there were few multicore machines and, of the top three databases, Microsoft SQL Server is more likely to be found in departments and small- and medium-sized companies less likely to use those machines. Thus, Microsoft had less to lose than IBM or Oracle, both of which have more presence in high-end enterprise applications where multi-core, multi-CPU servers are more likely to penetrate.

But in April, IBM said it would follow suit. Kind of. It said it would count dual-core X86 AMD and Intel chips, as well as low end PowerCore chips, as a single processor. Use of higher-end PowerCore chips would cost more, based on a charge-per-performance basis. It is unclear what IBM will do when CPUs with more than two cores hit the streets.

One Oracle partner on the West Coast derided Oracle's response as "the least they could do."

"When someone goes to multi-core, say to two cores, they only get a 1.5 X increase [in performance]. So instead of Oracle charging 1.5 or 1.6 X, they're charging 1.75 X," he noted.

And, Oracle will always round up. On its Web page, the boilerplate reads: "All fractions of a number are to be rounded up to the next whole number. For example, a multicore chip with 11 cores would require a 9 processor license (11 multiplied by a factor of .75 equals 8.25 which is then rounded up to the next whole number which is nine.)"

On Friday morning, Woods updated reporters and analysts. The exception to the .75 rule, will be in instances where a single, dual-core CPU running the server would be licensed as a single, not a double CPU. In theory, if Oracle did not make that exception, that machine running Oracle 10g Standard Edition or Standard Edition One, would have been calculated to be 1.5 processors, and thus charged as a dual-CPU box.

Ron Zapar, CEO of Re-quest, a Chicago-based Oracle partner, said the company is starting to make the right moves.

"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," he said. "This is a step in the right direction but they'll have to do better."

This story was updated Friday morning with Woods' clarification on single-CPU, dual-core licensing.