Oracle's Database Machine: How much will it really cost?

When CEO Larry Ellison unveiled the Oracle Database Machine at its OpenWorld show last week, he made a claim that probably surprised many Oracle watchers and customers: that its new $2.3 million (£1.3 million) data warehouse-in-a-rack was far cheaper than competitors' wares.


According to Larry Ellison, the database Machine -- a pre-configured rack of 14 new, intelligent Exadata Storage Servers that were also introduced at OpenWorld, along with 8 Oracle Database 11g servers, all connected via high-speed InfiniBand pipes -- costs $14,000 per TB (terabyte), less than half comparable products from two leading data warehousing appliance vendors, Teradata and Netezza

However, analysts and competitors say Oracle used aggressive assumptions to come up with its price calculations. Using more realistic assumptions that factor in Oracle's penchant both for upselling so-called optional features as well as offering discounts, they say the Database Machine will still prove substantially pricier than competing products for all but large, existing Oracle database users.

"If you're buying from scratch, you'll have to add an extra $3 million," said Randy Lea, Teradata 's vice president of product and services marketing. "[Oracle] has done good marketing on their part to confuse the pricing issue."

"Oracle's typical pricing announcements talk about the most scaled-down, vanilla option," said Eliot Colon, President of licensing strategy firm Miro Consulting. "But there is always the option recommended by Oracle, and that always costs a great percentage higher."

Database Machine: nearer $5.55M, than $2.33M?

An Oracle spokesman declined to comment, instead directing Computerworld to a slide during Ellison's presentation last week (see 28:20 in the keynote video) comparing the Database Machine versus Netezza 10100 and the Teradata 2550.

Netezza's 43 TB data warehousing appliance lists for $1.25 million, or $29,000 per TB; while Teradata's 43 TB appliance costs $1.5 million, or $35,000 per TB.

Meanwhile, Oracle's costs $650,000 for the hardware and $1.68 million for the software, for a total of $2.33 million. A higher total price, but Ellison said with 168 TB of storage, the Database Machine's price-per-TB of $14,000 was cheaper than the others.

"We are closer to the price of a disk array," Ellison said. "And the price will continue to go down while performance goes up."

That keynote slide did have an asterisk next to its software price with a small note at the bottom, "Use your existing database licenses and 0% discount on storage server software."

That is a key assumption, say experts such as independent database analyst Curt Monash and Miro Consulting's Eliot Colon. Based on Oracle's recommended configuration and price list, customers who do not already own transferable enterprise Oracle database licenses with the given options would need to pay an additional $3.2 million (see Monash's detailed calculations.)

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