IBM sets price increases on DB2 enterprise version

IBM is adding a variety of features to the next version of its DB2 relational database, due for release in November. But it's also boosting the price of the enterprise edition of the software.

IBM officials this week disclosed that Version 8 of DB2 Universal Database will ship Nov. 21 for Unix, Linux and Windows systems.

As part of the rollout, they said, IBM plans to consolidate its DB2 Enterprise Edition and DB2 Extended Enterprise Edition packages into one offering priced at US$25,000 per CPU -- $5,000 more than the company now charges for the base version of the software.

In addition, database clustering support will now be sold as an add-on feature costing $7,500 per CPU. Clustering is currently included in the extended version of the enterprise edition.

IBM isn't just raising prices: The per-CPU cost for the workgroup version of DB2 will be cut from $14,000 to $7,500, the company said. And IBM officials pointed to new functionality that's coming in Version 8 in an attempt to justify the price increases at the enterprise level.

"There's a little bump in price for the enterprise version, but we added 432 new features to this release," said Jeff Jones, director of strategy at IBM's data management solutions unit. "This is a major, major upgrade for us."

DB2 Version 8, which was announced two months ago without pricing details, includes new self-managing tools, a redesigned user interface, a built-in configuration adviser and other enhancements.

Despite the price increases, an IBM spokeswoman said DB2 will still cost users less than the $40,000 per CPU that rival Oracle Corp. charges for the enterprise version of its Oracle9i database.

But Jacqueline Woods, vice president of global pricing and licensing strategy at Oracle, said via e-mail that DB2 still falls short of Oracle9i on functionality. "As such, no one should expect the price to be the same," Woods said.

Oracle reported this week that database revenue fell 9 percent year to year in its first quarter, which ended Aug. 31. IBM claimed that it has had 21 consecutive quarters of database revenue growth as of this year's second quarter.

David Beulke, president-elect of the Chicago-based International DB2 Users Group, said he doesn't mind the price increase, given the new features IBM is promising. "The total cost of ownership for DB2 continues to be cheaper than competing platforms," said Beulke, a consultant and developer at Pragmatic Solutions Inc. in Alexandria, Va.

"I expect they need to pay for development, and the features are worth it," said Martin Hubel, a database consultant in Toronto who uses DB2 Version 7.2 to run a Web site and plans to upgrade to Version 8 as soon as the software is available.

But Mike Schiff, an analyst at Current Analysis Inc. in Sterling, Va., said some users may choke on any price increase in the current IT spending environment. "I can see Larry Ellison having a field day," Schiff said, referring to Oracle's CEO. Nevertheless, he added that price often "is a relatively small consideration" in database purchases.

James Niccolai of the IDG News Service contributed to this report.

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