July 18, 2009 1:25 PM
Oracle licensing: a game too far?
Oracle seems to be playing a dangerous game. Its latest price rise shows that it continues to see its customers as a rich resource to be milked - even at a time when mostorganisations are feeling the pinch. And this just a year after it raised the price of its 11g database by 20 percent - considerably above the rate of inflation.
It appears that Oracle is banking on two factors - its dominance in the market means that its customers have little choice. There’s also the more intriguing policy that the price rises are not realistic ones - in the same way that the initial price in a used car lot is just invitation to start some haggling. So, by introducing the possibility that the latest price hike can be negotiated down more than usual, CIOs can be presented as heroes intent on saving their companies money, leading them to be eternally grateful to Oracle, buying its products until time immemorial
It might seem to Oracle that it can't lose on this given that so many organisations' key systems are based on Oracle technology. But one wonders how long customers will swallow these price hikes indefinitely.
A CIO may be able to 'negotiate' big savings but it's also a possible that a few astute CFOs will start asking questions about whether their companies should be implementing products from vendors whose licences are among the least-customer friendly in the business but who routinely raise their prices by many times the cost of inflation - at a time when other vendors are cutting prices. There is now closer scrutiny than ever of costs across the enterprise and I wonder when exactly the point will be when a CIO decides enough is enough and looks to a new platform. There has been plenty of noise from open source vendors that they’re ready to take on Oracle and it could be that we’re a price rise or two away from a major shake-up in this market.
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