Oracle Challenges Microsoft in Low-End Database Market

Computerworld - Taking aim at Microsoft Corp.'s low-end database dominance, Oracle Corp. last week slashed the price of the entry-level version of its 10g software to slightly undercut the cost of Microsoft SQL Server.

Oracle said the list price of the 10g Standard Edition One release has been reduced to $4,995 per processor, a $1,000 drop from the company's previous low-end database pricing. In comparison, SQL Server starts at $4,999 per CPU.

Oracle also cut the price of its named-user license for Standard Edition One, which is designed for small businesses and departmental applications. In addition, it doubled the number of processors that the software can support to two.

In a related move, Oracle said it will throw in its Real Application Clusters (RAC) technology at no extra charge for users of 10g Standard Edition, another release that supports up to four processors. The 10g databases were announced in September and became available late last month.

Oracle's new pricing "is leveling the playing field, and the competition is not so much based on dollars as features," said Kim Floss, a database administrator and president of the database-oriented International Oracle Users Group in Chicago. The ability to run 10g Standard Edition One on two-processor servers is also a big gain for users, Floss said.

Seeking Savings

Pat Dues, project officer for the city manager's office in Las Vegas, said the pricing moves should help Oracle compete against both SQL Server and IBM's low-end DB2 offerings.

The Las Vegas municipal government next year plans to upgrade to the upcoming Version 11i.1 of Oracle's E-Business Suite of business applications and add new modules, such as its project management software. Dues said she will consider using the new database pricing to cut costs as part of the upgrade process.

"We think it's a very positive announcement," she said. "Everybody wants to look at ways to save money."

Chuck Phillips, one of Oracle's two presidents, said in a meeting with analysts two weeks ago that the company planned to take on Microsoft aggressively in the low-end market .

The new pricing was designed to be "extremely competitive," said Jacqueline Woods, vice president of global practices, pricing and licensing strategy at Oracle, in an interview last week. Woods said 10g also comes with a simplified management interface, and she noted that the RAC technology wasn't even available for the Standard Edition release before.

Tom Rizzo, director of SQL Server product management at Microsoft, downplayed the pricing moves. Even if Oracle lowered the price of its database to nothing, the maintenance and support costs would still outweigh the cost of running SQL Server, Rizzo claimed. "What about reporting, OLAP and data mining? That's all included in SQL Server," he added.