Oracle Moves to Flat Fee for E-Biz Suite

By Renee Boucher Ferguson  |  Posted 2002-02-04

Oracle Corp. is trying to lure enterprises into licensing its entire Oracle 11i E-Business Suite of applications with a new pricing structure.

The flat-fee pricing is largely a way for Oracle to back up its message that integrating disparate applications is more expensive than buying its entire enterprise suite.

Beginning March 31, the Redwood Shores, Calif., developer will charge a $4,000 license fee per application module for Professional users of E-Business Suite and $400 per application for Self-Service users.

A Professional user is defined as anyone who uses an application or module to do his or her daily job and make decisions. A Self-Service user is defined as anyone who is able to perform a task—say, changing the number of dependents in a human resources application—by logging on to the Internet and interfacing with an application.

The pricing policy applies to all 18 E-Business Suite modules. It does not apply to applications for verticals: Communications, Utilities, Public Sector, University and Financial Services.

The pricing plan, which CEO Larry Ellison announced at Oracle AppsWorld in Amsterdam, Netherlands, last month and was clarified last week, could represent a 25 percent to 75 percent savings for companies licensing E-Business Suite, according to Jacqueline Woods, Oracles vice president of global practices pricing.

The caveat is that a minimum number of licenses must be obtained under the pricing structure: 10 percent of a companys employee base for the Professional or Self-Service user fee to apply.

"For you to realize that type of discount, you would need to standardize on the entire suite," Woods said. "If youre not going to be using more than one application and you have a big company, you should probably license [the software] on a component basis."

An example of E-Business Suites current pricing can be found online at the Oracle Store. The Manufacturing module, which includes six applications, is listed at $15,970 per user, while the Human Resources module, which includes seven applications, costs $275 for the module.

Oracle will take into account those users who have purchased software and want to migrate to E-Business Suite by crediting them for what they originally paid for the software, minus any discounts they received. However, customers still must meet the licensing minimums.

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