Oracle's Pricing Ploy

As of July 8, each core of new multicore Advanced Micro Devices, Intel or Sun processors will be licensed as if it were 75 percent of a CPU, Oracle confirmed. Until now, Oracle had counted each core as a CPU and charged accordingly. Thus, a four-way dual-core server running Oracle 10g Enterprise Edition at $40,000 per CPU had been $320,000 and will now be $240,000.

Partners said customers who bought Oracle wares in the most recent fourth quarter might not be too happy to learn about what amounts to a discount.

Oracle licensing guru Jacqueline Woods downplayed those claims. "We've been working with customers for several months. We were already considering this [move] and accounted for it in our discounts," said Woods, vice president of global pricing and licensing strategy at Oracle, Redwood Shores, Calif.

Partners had said that a two-core CPU does not really double performance and they thus didn't want to pay double for it. Several partners predicted Oracle would do what it has done, count each core as a partial CPU. They also said that would not be enough, especially since Oracle will round up.

Oracle's boilerplate reads: "All fractions of a number are to be rounded up to the next whole number. For example, a multicore chip with 11 cores would require a nine-processor license (11 multiplied by a factor of 0.75 equals 8.25 which is then rounded up to the next whole number which is nine.)"

On Friday, Woods said the exception to the rule would be single-processor multi-core servers running Standard Edition and Standard Edition One databases. "In SE and SE one, for those single processors, the license requirement would be for one, not two processors."

Ron Zapar, CEO of Re-quest, an Oracle partner in Chicago, said the company is starting to make the right moves. "We've had pushback from our customer base already around the current pricing strategy where a single processor that is dual-core equals a two-processor license for Oracle," he said. "This is a step in the right direction, but they'll have to do better."

Database rival Microsoft last October said it would count each processor as one CPU regardless of the number of cores. At that time, there were few multicore machines, and, of the top three databases, Microsoft SQL Server is more likely to be found in departments and SMBs that don't typically use such high-end machines. Redmond, Wash.-based Microsoft had less to lose than IBM or Oracle, both of which have more presence in high-end enterprise applications where multicore, multi-CPU servers are more likely.

But in April, IBM said it would count dual-core X86 AMD and Intel chips, as well as low-end PowerCore chips, as a single processor. Use of higher-end PowerCore chips costs more, based on a charge-per-performance basis. It is unclear what Armonk, N.Y.-based IBM will do when CPUs with more than two cores hit the streets.

One Oracle partner derided Oracle's response as "the least they could do." He added: "When someone goes to multicore, say to two cores, they only get a 1.5X increase [in performance]. So instead of Oracle charging 1.5X or 1.6X, they're charging 1.75X."