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 US$240,000--eight cores times a processor factor of 0.75 times the US$40,000-per-core license rate. A Sun T2000 server with a single eight-core UltraSparc T1 "Niagara" processor costs US$80,000--eight cores times a 0.25 processor factor times the US$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 US$40,000, they'll support you site-wide."
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