Tuesday, April 29, 2008

Core blimey!

The Register reports on the latest developments in Oracle's multi-core licensing policy:
"Oracle, we hear, is charging a factor of .75 for Sun's T2 and T2+ systems even though they're running at about the same speed as the T1s. The major difference with the new chips is their support for more threads and the fact that the T2+s can go into multi-socket servers making them more useful for, er, databases. And by 'more useful' here we mean 'useful at all' since no one in their right mind would have thrown the older T1 systems at Oracle.

The .75 T2 factor comes as quite a shock to Sun customers who have upgraded their hardware only to have the Oracle tax man come along and tell them that the solid price/performance they were expecting via the hardware will be eroded via the software."
Of course Oracle is entitled to price its licences however it wants. But trebling the fees for customers who move to a different server with the same number of cores as their old kit doesn't seem like the best way to maintain loyalty. It also alienates Sun, who have previously used the favourable licensing terms to sell T1 boxes.

I disagree with Ashlee Vance's conclusion that Oracle's licensing policy will drive customers into the arms of IBM. If you're going to take the pain of moving to a new DBMS and if licensing costs are the main driver then free is a lot more attractive than DB2, no matter how sane IBM's fee structure. In his blog Sun CEO Jonathan Schwartz recounts a pertinent story from a recent visit to a large commercial institution:
"We had just closed the acquisition of MySQL, so before I wrapped up, I asked, 'And would you like a quick update on the newest addition to our family, MySQL?'

The CIO responded categorically with 'we don't run MySQL, we run [name withheld to protect the proprietary].' The CISO said, 'We can't just let developers download software off the net, you know, we've got regulation and security to worry about.' The CTO smiled. Everyone else appeared to be sitting on their hands. I was going to leave it at that. Thanks for the business.

Until a (diplomatically) assertive Sun sales rep piped up, 'Um... no, I connected with a buddy of mine over at MySQL, and had him check - you've downloaded MySQL more than 1,300 times in the last twelve months.'

After a profoundly awkward silence, one of the individuals from their internal development team piped up, 'Actually, everybody uses it. Why bother hassling with license agreements when MySQL's got you covered. We're stoked you bought them.'"
As we all know, purchasing decisions are frequently made on the basis of which product is the most cost-effective rather than which product is the best. The danger for Oracle is that Sun's purchase of MySQL lends the free database a lot more credibility than it had before. If Oracle won't give Sun any more sweetheart deals then Sun has more reason to start trumpeting the price-performance advantages of running MySQL on their new multi-core boxes. Oracle has made a lot of play about the benefits of free when it adopted Linux as its OS of choice. So it's not like it doesn't understand the allure. Which is probably why Oracle has restricted the price gouging to the Enterprise Edition licences whilst the Standard Edition is charged per socket. The jump from the SE feature set to MySQL is probably a lot less daunting than the equivalent jump from EE.


Over at the Service Architecture - SOA blog Steve Jones considers the implications of the Register article for Software licensing in a virtual world.

Footnote #2

At the time of writing, the Multi-Core Processors - Impact on Oracle Processor Licensing document hurls an 404 error. This may indicate that Oracle are updating it to reflect the new chip sets.

Footnote #3

Also worth a read is the Register's recent interview with Mark Shuttleworth, Ubuntu's rentaquote-in-chief. Amongst other things he makes this prediction about Oracle's Unbreakable Linux strategy:
"Oracle will find themselves in a position where, if this business is successful or strategically important to them, they will need to fork or buy Red Hat. They will do one of those things within three to five years."

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Blogger Noons said...

"At the time of writing, the Multi-Core Processors - Impact on Oracle Processor Licensing document hurls an 404 error."

LOL! How web-2 is that!
Seriously, though: it's been like that for quite a while now...

29 April 2008 at 16:58:00 GMT-7  
Blogger JCFlack said...

Oracle has struggled with how to price and license their software for years. It is extremely difficult to find a pricing model that earns a reasonable profit without antagonizing customers. Price by number of users? Problem - we're on the web and we don't really know how many users we have or will have. Price by CPU power? Problem - desktop machines now have the power that once required a mainframe, but you aren't going to pay mainframe prices for a desktop. Price by number of CPUs? Problem - desktops are now routinely using processors that are really two (or more) CPUs on a single chip.

30 April 2008 at 05:50:00 GMT-7  
Blogger Mike King said...

Pricing @ the core level is insane. When intel comes out w/ a 4 socket pizza box w/ 16 cores per socket people won't be able to put Oracle on it even if they muck w/ the multipliers again. Microsoft has superior pricing @ the socket level. Oracle only has it for the bait & switch offerings. Socket based pricing is inevitable. Oracle will ultimately capitulate to it. Sadly they will wait until their revenue growth flatens & turns negative.

2 May 2008 at 07:39:00 GMT-7  

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