December 20, 2005 7:31 AM PST

Oracle lowers price for some multicore chips

Oracle has changed its database-licensing structure, giving customers a price break on servers that use new multicore chips from Advanced Micro Devices, Intel and Sun Microsystems.

The database heavyweight updated its licensing terms on Monday to reflect the changes. The shift was made because of the emergence of high-volume servers with multicore processors, according to Oracle.

"As technology evolves, we have adapted our licensing models to accommodate these changes," Oracle's vice president of pricing and licensing, Jacqueline Woods, said in a statement.

Multicore processors pack two or more "cores," or processing units, onto a single piece of silicon. Intel, AMD and Sun have each released dual and multicore chips this year.

Databases are often priced based on the number of processors on a server. Until July, Oracle designated each core as a single processor. In July, it changed its policy so that each core would be treated as three fourths of a processor when calculating database costs.

On Monday, the company scaled back the pricing again. Its new policy states that each core on an AMD or Intel chip will be considered half of a processor. Each core on a Sun UltraSparc T1 processor, which is used in the company's recently released servers, is considered a quarter of a processor.

The reduced prices at Oracle follow similar moves made by its primary database competitors, IBM and Microsoft.

In April, IBM shifted its policy and now treats dual-core chips from AMD and Intel as a single processor. But it continues to treat each core as a processor for IBM's own Power chips.

Microsoft does not charge a premium for software that runs on multicore servers.

In a research note sent on Monday, WR Hambrecht analyst Robert Stimson said Oracle's second database price cuts are in response to growing price competition in the database market.

"We believe that this latest round of price cuts may be indicative of pricing pressure Oracle is experiencing from low-cost database alternatives such as Microsoft's newly released SQL Server 2005 and open-source offerings," Stimson said.

Reuters contributed to this report.


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Multicore Systems.
It is a matter of the increased availability of multicore systems. Oracle certainly does not need to charge per core to make their sustained revenue. It does need to realize that if it is charging a substantially higher price than a competitor, they will lose a lot more revenue.

I'm sure this change is a premium on Oracle products running on multicore systems and not cheaper on the customers. The article doesn't provide any figures and is very vague.
Posted by zaznet (1138 comments )
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Pricing details...
The details are all at <a class="jive-link-external" href="" target="_newWindow"></a>

For example, the new T1000 and T2000 8-core servers will be charged a x2 price (using a 0.25 multiplier), the new X4100 and X4200 dual-core Opteron servers will be charged a x1 price (using a 0.5 multiplier) and everything else is priced using a 0.75 multiplier.

Personally I think it's a crazy pricing scheme and will cause many companies to look at MySQL, PostgreSQL, SQL Server or DB2 instead.
Posted by hutchike (157 comments )
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They changed their pricing because all other vendors don't charge more either

<a class="jive-link-external" href="" target="_newWindow"></a>
Posted by SqlserverCode (165 comments )
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Still not competitive
They still charge more than their competitors and now their demonstrated disdain for security in their product makes it even less attractive. Something is seriously wrong at Oracle.
Posted by aabcdefghij987654321 (1721 comments )
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How much is a gallon of gas..?
Well, that depends on how many cylinders your engine has, and how many passengers you carry.

This is insane. But then, it should help competing solutions quite a bit, so... GO ORACLE.
Posted by Had_to_be_said (384 comments )
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