Oracle pumps up prices, BEA takes the hit

Oracle's latest price list for its growing portfolio of applications software contains significant increases across the range, and a particularly large price rise for its BEA software.

The company's core software has risen in price by around 15 to 20 per cent in the US, and European users can expect local increases to reflect those rises.

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The price of the main Oracle Database Standard Edition product has gone up from $15,000, according to published information from Oracle resellers, to $17,500, according to Oracle's published price list.

The price of the Enterprise Edition has risen from $40,000 to $47,500.

However, the biggest rise appears to be in the costs of BEA software. The price of the Premium or Enterprise Edition of the WebLogic Server has gone up from $17,000 to $25,000: a rise of $8,000. However, the cost of the Basic or Advantage Edition remains unchanged, at $10,000.

Trying to find other prices in order to check 'like for like' can be challenging for users, as analyst Tony Lock, programme director at Freeform Dynamics, explained on Monday. "One of the issues with Oracle is the complexity of the company's price list and pricing structure," he said. The current price list for Oracle's core products, but not its whole portfolio, runs over eight closely typed pages.

Many Oracle customers only became customers of the company when its fraught takeover of BEA Systems was finally agreed in January this year. BEA shareholders had originally resisted the takeover before finally agreeing to a purchase price of $8.5bn - up from an original offer of $6.7bn.

Overall, the recent price rises have been high, said Lock, adding that this is a regular issue with Oracle. "We have been conducting surveys of software vendors for some years now and, in those surveys, Oracle is always at or near the top of vendors that concern users [over issues like price]," he said. "These price increases look very high."

Lock said he believes Oracle is risking a lot by going for above-inflation price rises, especially when virtualisation is proving popular with companies. He said: "A large price increase just gives the [chief financial officer] another reason to look at the deal [between their company and the software vendor] again. Virtualisation means that customers expect more flexibility in their systems and in their pricing."

James Governor, an analyst at RedMonk, agreed that Oracle's actions were no surprise but took a tougher view, claiming the company is out to "sweat" its software assets.

He told silicon.com sister site ZDNet.co.uk: "Having acquired a number of assets, it is not surprising Oracle would sweat them. Customers shouldn't panic though; even given the unfortunate timing of the news, given the current state of the economy, they should simply take a deep breath and play the game."

The "game", said Governor, is the trade-off between price rises on the one hand and deep price discounts on the other. "Oracle claims it doesn't discount its software but customers tell a different story at the end of each and every quarter," he said.

Oracle declined to comment.

Original article: BEA bears the brunt as Oracle hikes prices from ZDNet UK