Oracle Under Pressure

Oracle, which charges software licensing fees per processor core rather than per processor as many of its competitors now do, is likely debating a move and will certainly need to make changes at least by early 2006, according to industry executives. They said Oracle is fielding complaints from chip and server manufacturers, solution provider partners and customers.

“Everyone is upset about it,” according to PCPC COO Joe Vaught.

In fact, Oracle&'s pricing policies for dual-core blade servers have become such a sticking point for the Houston-based solution provider that Vaught has called a meeting for later this month with Oracle and PCPC&'s blade server partner IBM to discuss pricing options.

Oracle declined to comment for this article beyond a statement that said, in part: “As platforms change and market opportunities arise, we continue to examine our pricing structure.”

Sponsored post

When Oracle cut its pricing to 75 percent of a full license per core in July for multicore pricing, solution providers said it was a step in the right direction. At that time, only Advanced Micro Devices was shipping dual-core processors. But next year, both Intel and AMD will work to phase out single-core processors, and the first quad-core parts are due at the end of 2006.

“I think [Oracle&'s pricing strategy] will impact the lower markets more than the enterprise because the enterprise is still willing to pay the big fees,” said one Oracle partner who asked to remain anonymous.

Oracle earlier this month reduced the price of its software license to 25 percent of a full license per core for servers based on Sun Microsystem&'s new eight-core T1 processor. Oracle has characterized this strategy as a “promotion” but declined to say how long it will last. Sun is thought to be underwriting part of the discount.

Microsoft already licenses SQL Server by the processor. IBM this year unveiled per-processor pricing for DB2 and WebSphere for x86 multicore processors, although it still charges a premium on higher-end RISC CPUs. Now, all eyes are on Oracle.

BARBARA DARROW contributed to this report.