Analyst firm slams Oracle pricing

The Meta Group Inc. says its phone lines are blazing hot from irate Oracle Corp. customers over apparent changes to that company’s licensing scheme.

According to reports from Meta, a research and consulting firm based in Stamford, Conn., Oracle customers are being told that the Redwood Shoes, Calif.-based database and enterprise software vendor has re-interpreted its definition of multiplexing.

In response, Meta is urging Oracle users who are being told that they are not in compliance with its existing contract based on the company’s new interpretation to refuse to pay any extra licensing fees, and to even take legal action if necessary.

In a prepared statement, Oracle responded by saying “Oracle pricing and licensing policy, with respect to the treatment of multiplexing or batch processing, has been consistent and in effect for several years.” It went on to say that Meta’s findings only represented a “handful of misunderstandings about the policy.”

Multiplexing is the use of software such as a Web server or TP monitor that uses a shared pool of connections to the back-end database that masks the actual number of users that are physically connected. In such cases, customers either licensed the Oracle database through a per-CPU model or paid for all the users at the front end.

However, Meta says Oracle is trying to expand the definition to include batch feeds from non-Oracle applications into Oracle databases. This change would significantly impact current customers who utilize the database for data warehousing applications that require large servers with few users.

The issue began last January when Oracle suddenly began performing random audits that the company called “licensing management services” in order to inspect if its clients were compliant. At which point, even after customers were seen as being in accordance, Oracle began clarifying its stance, saying that any batch processor or computer-to-computer connection was now seen as multiplexing, said Mark Shainman, senior research analyst for The Meta Group in Weston, Va. This forces organizations to include all its clients at the front end, a proposition he estimated would cost companies five times the amount to convert to a per-processor model.

He added that because of the original vagueness of the contract, it can now be re-interpreted unjustly.

“The reality of it is (Oracle has) seen little to no growth in their licensing revenue, so they need to find revenue somewhere since they’re such a quarter by quarter-driven company. This is a way to dig for that extra revenue. When I hear somebody saying a bulk load is multiplexing, I think that’s insane. I need to look into my front end for my data warehousing,” Shainman said.

“This is with clients that have name user contracts that go back before there was even such a thing as a per processor or power unit,” he added. And for many of its customers, unless they find themselves in an environment that is completely, 100 per cent Oracle, the only alternative under this model will be to convert to a per-processor model for data warehousing, said Shainman.

The Meta Group in Stamford, Conn., can be reached at

Redwood Shoes, Calif.-based Oracle Corp. can be reached at

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