Oracle revamps pricing with 9i release

Oracle Corp. launched a new version of its flagship database Thursday, a product that includes high-end features designed to help Oracle shore up its narrow lead against arch rival IBM Corp. The company also said it has revamped a controversial pricing scheme that had come under fire from some customers.

Called Oracle 9i, the database includes a new clustering feature designed to make it easier for customers to add new servers as demand increases. It also includes business intelligence tools for analyzing data, and new manageability features designed to cut costs for users and make its product easier to use, Oracle officials said.

Perhaps more interesting for Oracle's current users is that the vendor has introduced a new pricing system. The new scheme, based on the number of processors a customer uses, replaces Oracle's "power unit" model, a more complicated system that took into account the speed of each processor, and required users with faster chips to pay more.

"We're trying to make it comparable to IBM," Larry Ellison, Oracle's chairman and chief executive officer, said of the new pricing system at a press conference here. IBM has criticized Oracle for being five to six times more expensive than IBM's own database, and so switching to a similar pricing model to IBM's will make it easier for customers to compare prices, he said.

Oracle's existing 8i customers will be able to switch to the new pricing scheme, Ellison said. The company will publish a "simple conversion formula" in the next few days that will allow customers to calculate how much they will be paying under the new system, he said. Meanwhile, it wasn't immediately clear whether customers will end up paying less or more for Oracle's database under the new model.

Under the new system, the Enterprise Edition of Oracle 9i is priced at $40,000 per processor, while the Standard Edition is priced at $15,000 per processor, Ellison said.

The change can't come soon enough for some customers who have complained that Oracle's power unit method, which was introduced last year, was unpredictable and hard to fathom, said Betsy Burton, a database analyst with Gartner Inc. In fact, Burton said, Oracle's pricing model "left the door open" for IBM and Microsoft Corp. to steal business from the database market leader.

"Over the last six to nine months I've been hearing clients say they're making the decision for DB2 because of pricing," Burton said. "I've talked to a customer who said, Look, we understand (Microsoft's) SQL Server isn't as scalable or reliable, but at 10 times less the price of Oracle we're going to make do."

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