Oracle Defends Its Math on Multicore Discount

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Oracle defended the math behind its new and comparatively stingy 25 percent rebate on multicore processors, saying that customers are now getting charged for what they in fact get: a 1.5 to 1.75 times performance boost from a dual-core chip.

Oracle Corp.'s vice president of pricing and licensing defended the math behind the company's new and comparatively stingy 25 percent rebate on multicore processors, saying that customers are now getting charged for what they in fact get: a 1.5 to 1.75 times performance boost from a dual-core chip.

"We have done quite a bit of research on this," said Jacqueline Woods, in a conference call on Friday with press and analysts. "There is incremental value to the dual-core processor, in terms of performance. It's not a one-to-one relationship. Look at our [pricing per core] in the past … if you had two cores, you had to pay for two processors. Our research has determined that, essentially, the performance you get on the dual-core processor [averages between] 1.5 and 1.75 times [that of a single-core processor], so performance is aligned with value received by the customer."

The company on Thursday tweaked licensing terms on its online Oracle Store. Customers were, up until now, charged on a one-to-one basis, where each core on a chip counted as a processor. Oracle has updated that policy so that each core is multiplied by 0.75. Fractional results are rounded up to the next number to determine the amount of processors for which customers will be charged.

Exceptions are made for Oracle Standard Edition One or Standard Edition programs on servers with a maximum of one processor with one or two cores, for which Oracle will count only one processor for licensing purposes.

As software licensing grows more complicated with the advent of power multicore processors, enterprise software buyers search for simpler licenses that bring cost savings. Click here to read more.

Both IBM and Microsoft Corp. have in the past nine months announced that they will essentially treat dual-core as single-core when it comes to licensing. Oracle, however, isn't worried that its new licensing model will send customers scampering to its competitors as they seek more generous terms for multicore licensing.

Woods pointed to IBM's licensing of dual cores, which is slightly different according to the platform involved. On the P series and the IBM/Unix platform, for example, IBM is licensing per core, she said. In those particular instances, Oracle would be charging for 25 percent fewer processors.

As it relates to the Intel Corp. environment or Advanced Micro Devices Inc. chips, though, IBM and Microsoft are in fact charging per processor, regardless of core count. Oracle is sticking by its guns, however, in depicting its pricing as fair.

"We think this is the right processing for that environment," Woods said. "We tend to be agnostic on hardware providers, not differentiating between IBM, Sun or anyone else. We want to be consistent with that and, for the most part, treat all hardware vendors the same. Our software [pricing] in any hardware environment would be consistent."

When it comes to the upcoming prospect of virtualization technologies and the complexities virtualization will bring—a much hairier prospect than multicore, according to licensing experts, due to the difficulties in tracking usage—Oracle is looking to per-employee pricing as the answer, Woods said.

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Lisa Vaas is News Editor/Operations for eWEEK.com and also serves as editor of the Database topic center. Since 1995, she has also been a Webcast news show anchorperson and a reporter covering the IT industry. She has focused on customer relationship management technology, IT salaries and careers, effects of the H1-B visa on the technology workforce, wireless technology, security, and, most recently, databases and the technologies that touch upon them. Her articles have appeared in eWEEK's print edition, on eWEEK.com, and in the startup IT magazine PC Connection. Prior to becoming a journalist, Vaas experienced an array of eye-opening careers, including driving a cab in Boston, photographing cranky babies in shopping malls, selling cameras, typography and computer training. She stopped a hair short of finishing an M.A. in English at the University of Massachusetts in Boston. She earned a B.S. in Communications from Emerson College. She runs two open-mic reading series in Boston and currently keeps bees in her home in Mashpee, Mass.

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