Oracle confirmed a change to its multicore processor pricing and licensing model Friday after the news first appeared on the company's Web site.
The database and applications vendor will no longer charge an individual license for each processor core, instead defining each processor core on multicore chips as 0.75 of a processor, according to Jacqueline Woods, Oracle's vice president of global pricing and licensing. She said on a Friday conference call that Oracle had arrived at the decision after several months of discussions with customers and analysts on how best to address multicore pricing.
Under the new Oracle approach, a four-way, dual-core processor server previously costing US$320,000 (four times two times US$40,000) will now cost 25 percent less or US$240,000 (0.75 times eight cores times US$40,000), she said. The only exceptions to the new rule are Oracle Standard Edition One or Standard Edition programs that apply to single-processor servers with a maximum of two cores, which will be priced as a single processor, Woods added.
As for how many Oracle customers are likely to be impacted by the company's pricing change, Woods said. "Honestly, I don't know how many people will be affected and I wouldn't like to speculate."
"It's a step in the right direction," Martin Reynolds, analyst and vice president at Gartner said. "It's better, but still not perfect," he added, wondering whether Oracle plans to adjust the 0.75 model as multicore processors move to quadcore and beyond.
Woods wouldn't be drawn out on whether Oracle will need to alter its pricing model again once quadcore processors appear, though she expects those processors to start appearing in the market "next spring or summer."
Woods commented on different hardware vendors' approaches to server virtualization, positioning virtualization as further complicating licensing policies. "I do see a trend of a move back towards employee-based and user-based licenses [in future]," she said. "It may be easier."
Ultimately, the goal with licensing is to keep its revenue neutral, Gartner's Reynolds explained. "If you're offering extra value above what the hardware provides, the customer should expect to pay more," he said. If improvements in performance are "just the result of the advance of technology, historically there's been no extra charge" from software vendors, he said.