Oracle Tackles Licensing

Database giant kicks off a series of pricing workshops designed to clarify its software licensing schema.

Oracle Corp. on Tuesday tackled licensing, an issue that has long bedeviled users and that experts say could trip up customer acceptance of the companys recently unveiled 10g grid technology.

On Tuesday, the Redwood Shores, Calif., company held the first of a series of pricing workshops that are designed to clarify Oracles intricately knotted software licensing schema. The workshop, which was held at the OAUG (Oracle Applications User Group) conference in San Diego, tackled licensing issues that typically trip up customers, such as when to migrate or convert licenses to a new model and how to figure out if its cost-effective; when to buy an applications suite vs. components; and how to determine support and product maintenance costs.

Officials at Oracle declined to comment on 10g pricing, although CEO Larry Ellison reportedly admitted last week at OracleWorld that the company might move to an annual subscription model, as opposed to current per-user and per-CPU models.

Despite Ellisons remarks, Jacqueline Woods, Oracles vice president of Global Pricing and Licensing Strategy, last week told eWEEK that there wont be any change to licensing fees with the advent of grid, in spite of the fact that the technology will usher in a more flexible architecture in which CPU usage will fluctuate with computing demand.

"The only way youd pay more is if you were to increase CPUs or named users," she said. "Then youd buy more licenses, same as today."

Carl Olofson, an analyst with IDC, in Framingham, Mass., says that that attitude has to change if Oracle wants to more effectively address the midmarket. "If you think of this in terms of a cluster which is of variable size, at certain times of the year [when enterprises do end-of-quarter number-crunching, for example], lets say I want to add two more servers," he said. "Thats eight more processors. I go from 16 to 24 processors total. Do I need a perpetual-use license for 24, even though I only use [the extra eight] one month per year? Customers are going to expect that if the configuration will be flexible, then the licensing should be as well. The way it stands now, youd have to license for the high-water mark."

Ian Abramson, CTO of Red Sky Data Inc., in Toronto, agreed that grid complicates licensing. After alls said and done, however, he trusts Oracle not to price itself out of competition. "The grid does confuse things," he said. "It complicates pricing because of the ability to add additional CPUs. "But they have to stay consistent, and they have to stay competitive. If they price themselves out of the market, thats not a good thing. Hopefully the grid will make it more affordable. As long as my licensing costs stay the same or get better, everybody will be happy."

Packaging is another issue Oracle has to work on with 10g, IDCs Olofson said. The company now offers Standard and Enterprise editions of its database. The question is, how will features and functions of 10g map to those two editions, and will there be additional editions?

A preferable path for 10g would be to put out editions that offer a more graduated path from entry-level to enterprise-level than is now offered, Olofson said, so that Oracle can match the low cost of entry for IBMs DB2 and Microsoft Corp.s SQL Server databases.

"Theres a lot of functionality with Oracles Standard Edition," he said. "Im not saying thats the weak version. But it seems it might make more sense to have a graduated approach that allows people to come in with the Standard Edition and add functionality to take them to the Enterprise Edition in smaller increments than just taking the large leap from one to the other."

An Oracle spokeswoman did not name a date for the next workshop in the series, but an Oracle release did say that future pricing workshops will be held quarterly in select locations throughout the world.

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