complicated cost structure may get a little
easier to swallow next week, with the world’s second largest software
company releasing a transparent view of its pricing and licensing on the
The Software Investment Guide, as the company is calling the release, is a
global pricing initiative by Oracle to help current and prospective
customers better understand and manage their enterprise-wide software costs.
The company, who is battling it out with IBM
for the top
space in the database market, has come under criticism for confusion over
its pricing structures.
The height of this criticism followed an April 17th California
state auditor’s report which found that a six-year, $95 million, no-bid
contract brokered by Oracle and Herndon, VA-based Logicon would have end up
costing state taxpayers $41 million instead of saving $16 million for the
software, as the groups had led the government to believe.
“It’s a good move for Oracle,” said Tyler McDaniel, managing director of
research and consulting firm, the Hurwitz Group. “Given the bad press they
have got, they need to say ‘we are going to be straightforward, we are going
to be as honest with you as possible.'”
While many tools and application server software have published baseline
pricing, when one factors in different licensing, support, outsourcing,
consulting, and education options across multiple departments, lines of
business and subsidiaries, the schemes can be exceedingly complicated.
The new guide is expected to address many of the complicated issues that
emerge in planning software, although some question just how rigid the
standards will be.
“In infrastructure software pricing continues to be a major challenge for
customers to understand, primarily because there is so much value-based deal
making going on that is hard to get repeated pricing,” said McDaniel. “For
Oracle to come out and publicly say this is going to be our foundation is
much needed, but the reality is that when companies get into a situation
things get tweaked and software may get added to cut a deal.”
The Global Oracle Software Investment Guide will be available at the Oracle
pricing and licensing Web
site beginning next week.