Oracle admits to pricing chaos

Database giant Oracle admitted today that it played right into the hands of industry rival IBM with its complicated pricing model.

However, the database giant immediately went on the counter attack as it unveiled details of its new pricing policy, which it claims is 65 per cent cheaper than IBM's DB2 offering.

Prompted by criticism from analysts and customers, along with ridicule from competitors, Oracle's new pricing policy will move to the CPU model, which charges customers according to the number of processors in a computer.

The move brings it into line with industry competitors, and replaces the former pricing structure - based on the power and speed of processors - which was slammed for being overly complicated and expensive.

Releasing details at Oracle's OpenWorld event in Berlin today, UK product marketing manager Gary Pugh said that competitors had used the fact that Oracle's pricing structure was perceived to be complicated as a marketing ploy against the database company.

"Competitors have used the pricing model against us and they've used it to confuse customers and keep them away from us," he said.

But he insisted new customers will flock to Oracle's 9i suite as the new pricing model makes it easier for them to make cost comparisons between industry leaders.

Dissatisfied Informix customers are particularly being targeted as IBM works to migrate them onto DB2.

According to Pugh's calculations the implementation of a four processor enterprise database would cost $160,000 compared with a $264,000 price tag for IBM's DB2 database installed on a similar system.

While Oracle has always denied that its databases are more expensive than IBM products, the 9i pricing model does see a 30 to 40 per cent reduction on old 8i costs.

Databases will start at $15,000 for a standard edition, going up to $40,000 for an enterprise version.

Application servers will cost $10,000 for a standard version and $15,000 for an enterprise version.