Partners prompt Oracle's multicore price reduction

In response to requests from some of its distribution partners, Oracle Corp. has lowered the licensing prices for some of its multicore server software to be more competitive with database rival Microsoft Corp.

Oracle made the move a few weeks ago and chose not to publicize it, unlike two previous changes in its multicore licensing that took place in July 2005 and December 2005. Details of the most recent licensing changes can be found here.

An Oracle spokeswoman confirmed the move late Friday.

Oracle announced distribution agreements with Tech Data Corp. and Ingram Micro Inc. in 2006 as a way to attract more small and midsize business customers. Oracle used input from those distributors to put in place the right packaging and pricing to speed up its growth in the small business market, according to the Oracle spokeswoman. Oracle's reseller partnership with Dell Inc. has also increased sales of Oracle's software in the midmarket.

Under the new changes that came into effect Feb. 16, Oracle has removed some restrictions on the licensing of its low-end Standard Edition and Standard Edition One databases for multicore servers, making the cost of software substantially cheaper. The move brings Oracle more into line with Microsoft's pricing of its SQL Server database by charging per processor socket, not by number of processor cores.

Pricing for Oracle's higher-end Database Enterprise Edition remains the same and rather torturous since it depends on a formula that uses a variable processor factor multiplied by the number of processor cores to determine the price. The processor factor is 0.25 for Sun Microsystems Inc.'s UltraSparc T1 chips, but 0.50 for chips from Advanced Micro Devices Inc. and Intel Corp., and then 0.75 for all other multicore chips, including those from IBM.

In July 2005, Oracle announced it would no longer charge an individual license for each processor core, instead defining each processor core on multicore chips as 0.75 of a processor. Then in December of that year, the vendor changed that model to bring in separate pricing schemes for different vendors' chips.

At present, Oracle is without an executive to oversee its product pricing and licensing.

Jacqueline Woods, who was vice president of global pricing and licensing strategy at Oracle, recently left the company to join General Electric Co. A GE spokeswoman confirmed that Woods had joined the company as global director of segmentation. The Oracle spokeswoman wouldn't comment on Woods' departure or who will replace her.

Copyright © 2007 IDG Communications, Inc.

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