Oracle Does The Math

As of Dec. 19, the Redwood Shores, Calif.-based database power started calculating each core of an Intel or Advanced Micro Devices multicore CPU as one-half of a CPU (each core times 0.50). Each UltraSparc T1 core counts as one-quarter of a CPU, and all other multicore chips will be counted as three-quarters of a CPU.

The changes were telegraphed a week before the announcement when Oracle talked of a special “promotion” for new Sun Microsystems servers running new UltraSparc T1 chips that would count each core as one-quarter of a CPU.

Last July, in the face of competitive pressure from Microsoft and IBM, Oracle adjusted licensing so that each AMD/Intel core would thereafter be licensed as three-quarters of a processor.

Microsoft, Redmond, Wash., had already said that for its SQL Server database and other server applications, it would charge per processor, not per core, even though many pundits said a dual core nearly doubles processor performance.

Armonk, N.Y.-based IBM followed suit on Wintel and low-end PowerOpen chips but continues to charge a premium for high-end multicore PowerOpen chips.

The fact that Oracle appears to be blessing Sun as the favored platform—given the new core equation—raised more than a few eyebrows.

Santa Clara, Calif.-based Sun and Oracle historically have been tightly allied, with Oracle powering most databases in the Sun Solaris world. But in the past few years, observers say Oracle got blade server and Linux religion and began pushing Linux aggressively on Intel platforms as a way to cut the total cost of Oracle solutions—while preserving its own price points.

Partners and analysts alike said Oracle has realized that a good chunk of its installed base remains on Sun Solaris, despite all the Linux sweet talk, and it was time to pay those customers more attention.

One longtime Oracle partner said the vendor needs to mend fences with Sun for that reason and also because the Sun sales force has been evangelizing IBM DB2 over Oracle databases in their accounts, at least in some geographies. Such a trend would have been unheard of a few years ago.

“Sun people pushed the hell out of DB2, and that&'s been happening for a while,” said one West Coast Oracle partner, who requested anonymity. “I can only speculate that might have bubbled up to the top and maybe that&'s the reason for the kiss-and-make-up.”

This partner said the per-core licensing changes could have a big impact because the bulk of his tenured customers license on a processor, not a named-user, basis. Newer customers purchasing Linux solutions are more likely to buy on a named-user basis, he said.

One Oracle executive said competitive pressures did not drive the move. “What we&'ve always said is that as hardware vendors change, our licensing models will also change to accommodate that,” said Jacqueline Woods, vice president of global pricing and licensing, in a conference call late last month. Charles Garry, an independent analyst in Simsbury, Conn., was not overly impressed by Oracle&'s move. “Slowly but surely they&'re getting to where they need to be,” he noted.

But he likened this current multitiered core price as a return to controversial Power Unit pricing that Oracle axed a few years back. Under Power Unit pricing, customers who moved to faster chips were required to pay more for the use of their Oracle software, even if the software itself was not upgraded.

The same scenario could play out here, Garry noted. “If, in a couple of years, you want to go from a four-processor dual-core to a two-processor with 10 cores—which is likely—you&'ll have to pay Oracle more money for the same software,” he said.

But Woods said charging a premium for multicore chips is justified. “The processing power of multicore servers is that they provide more performance than single-core servers. Most agree that the relationship is not linear, so a dual-core [chip] in terms of processing power is not 2X that of a single core, but most agree it&'s between 1.5 and 1.75 times more processing power,” she said.

In other Oracle news, CRN has learned that Hilarie Koplow-McAdams, who had been senior vice president in charge of the Oracle Direct sales operations, has resigned to move to Intuit. She has been with Oracle for 18 years, most recently heading up its huge direct sales and telesales effort. While the company searches for a successor, Oracle Direct personnel will report to Rudy Corsi, according to documents examined by CRN.

An Oracle spokesman said the company does not comment on personnel issues.