IT Business
Oracle jacks up prices
BEA customers worse hit by increase
By Chris Kanaracus, IDG News Service | Published 08:26, 20 June 08
Oracle is paying scant attention to the tough economic climate and has hiked its product prices significantly.
For example, a CPU licence for its database is now $47,500 (£23,800), up from $40,000, an increase of just under 19 percent. Other price hikes - including among Oracle's E-Business Suite applications - also fall into the 15 percent to 20 percent range.
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Customers of BEA (recently acquired by Oracle) products fare even worse, with price rises nudging 50 percent. The new price sheet states that a licence for the BEA WebLogic Server Enterprise Edition is $25,000. An official copy of an older BEA price list was not available, but one BEA reseller's site lists the higher-end version of the product at $17,000 per licence. Both sources have the low-end version at $10,000 per CPU.
An Oracle spokeswoman declined to comment on the price changes.
List prices aren't necessarily what customers pay for software products, as the cost often gets lowered dramatically through negotiations, said Ray Wang, an analyst with Forrester Research.
However, "these price hikes do raise the floor on pricing, and customers who would expect a 50 percent discount would have to ask for a 60 percent discount to get the same effect," Wang said.
Discounting has become so common and so dramatic that "the only way [vendors] can pass on any increase is to do it through the base," Wang said. "It's like when you buy a car and get $1,000 off the list price. You tell your friend and they say 'Hey, great deal.' But you paid $500 more than it cost last year."
Oracle is expected to release its fourth-quarter and fiscal year 2008 results on 25 June.
The company has been generally tight-lipped about its plans for the BEA product portfolio, but has scheduled a webcast for 1 July, saying executives will reveal additional information.
