March 2, 2007 4:00 AM PST

Multicore move cuts Oracle database cost

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Server makers and chipmakers, constrained by spiraling chip power consumption, have turned toward multicore processors rather than higher clock frequencies as a way to boost performance. Software companies accustomed to basing license fees based on processor tallies preferred to count processor cores, but hardware companies such as Sun Microsystems, Intel and Advanced Micro Devices urged a definition of a processor as that which plugs into a socket, regardless of how many cores it employs.

In the new licensing document, Oracle touts its pricing as "simple and flexible," but some might consider that a stretch. For example, when purchasing the company's flagship Enterprise Edition database, the price is based on a formula that multiplies processor cores with a "processor factor" that varies from one chip to another.

An Oracle Enterprise Edition license for an IBM p5-570 server with four dual-core Power5+ processors, for example, costs $240,000--eight cores times a processor factor of 0.75 times the $40,000-per-core license rate. A Sun T2000 server with a single eight-core UltraSparc T1 "Niagara" processor costs $80,000--eight cores times a 0.25 processor factor times the $40,000 rate.

Flexibility is another challenge for software pricing. Oracle's prices are geared toward servers as static entities, but with partitioning and virtualization technologies, a server foundation is becoming ever more mutable. Unix servers from Sun, IBM and Hewlett-Packard permit partitions to be expanded or shrunk at will, while virtual-machine technology from companies such as VMware permit operating systems and their accompanying software to be moved from one server to another while running.

Oracle isn't the only software company facing these pricing challenges. Indeed, Microsoft, while it seized the offensive with per-processor-socket pricing rather than per-core pricing, faces accusations from VMware that its licensing isn't flexible enough for the coming era of virtualization.

Oracle's new structure essentially is a partial accommodation of today's new realities, said Redmonk analyst Stephen O'Grady.

"They're trying to go half way," O'Grady said. "Oracle has always been at one end of the spectrum. They've come a little bit down the path. But if the underlying philosophy is (still charging per processor), there's only so much adjustment you can make."

Ultimately, software licensing and support fees will move toward models where customers can use as much software as they want, O'Grady predicted, a change that Oracle competitors such as open-source database specialist MySQL are pushing.

"Open source is pressuring (Oracle) not just from a technology and adoption perspective, but also from a licensing perspective," O'Grady said. "If you compare MySQL's pricing, they'll give you site-wide license for the cost of single CPU's worth of Oracle. For $40,000, they'll support you site-wide."

 

Correction: This report miscalculated the price of an Oracle Enterprise Edition license for an IBM p5-570 server with four dual-core Power5+ processors. It is $240,000.

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7 comments

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this change was made LAST year
seriously. this is old.
Posted by rbte (5 comments )
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Reporter responds: No, the per-socket pricing is new
Oracle indeed started making some adjustments to multicore chips in 2005, but the per-socket pricing for SE and SE1 is new. Those changes went into effect in February 2007.
Posted by Shankland (1858 comments )
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This was a big mistake, anyway
I think this was a wise move on Oracle's part.

Charles R. Whealton
Charles Whealton @ pleasedontspam.com
Posted by chuck_whealton (521 comments )
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Quad Core has been shipping for a while
This is great news. We received our Intel Quad Core server from Dells last Decemebr. Been waiting for the licensing to drop. Oracel is very smart to do this.
Posted by Arminsky (1 comment )
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Number of license for dual core servers
I need a clarification on number of Oracle license required for total 8 processor servers. For two boxes of quad core P550Q server, S1 & S2, housed in a rack. Each has two partitions, A & B. S1A & S2A will have Oracle 10g application server. S1B & S2B will have Oracle 10g EE DB in RAC mode. Please tell me number of Oracle DB & AS licenses required would be, 4 or 3? Keeping in mind Oracle multi-core licensing policy.
Posted by rajeevgairola (1 comment )
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