Update: Oracle to cut price on lower-end database

Oracle Corp. has announced a price cut for a lower-end version of its database, part of an effort to lure potential midsize market customers, the company said during a teleconference Wednesday.

The 10g version of Oracle’s Standard Edition One database, aimed at small and midsize companies, will be listed at US$4,995, a US$1,000 price drop, the company said. It will also allow customers to run the software on up to two processors. Currently, Standard Edition One is for use on only single-processor machines.

Oracle also announced it has added Real Application Clusters (RAC) capabilities to the Standard Edition of its 10g database, which is also aimed at small and midsize businesses, for no additional charge. The Redwood Shores, Calif.-based company introduced an additional promotion for its management packs. Originally priced at US$3,000 per CPU, now when customers purchase all four management packs and both application server packs as a bundle, the cost per pack is US$2,500. The company has positioned the technology, which lets companies run their database across a group of servers, as an important differentiator from its competitors.

“When we launched Oracle Standard Edition One in October, we said it was the introductory price and we alluded to a consideration of having a capacity of two processors,” said Jacqueline Woods, Oracle vice-president of Global Practices, Global Pricing and Licensing Strategy. “Now it is the appropriate time to lower the price if Standard Edition One and make it more widely available….”

Oracle president Chuck Phillips alluded to the price cuts in a presentation to financial analysts this week. Having established itself as an ardent Linux supporter, the company is going to make more of an effort to promote its database on Windows in the hope of stealing some business from Microsoft, he said in a speech that was Webcast from San Diego.

“This is the first time ever we’ve had the same list price per processor as Microsoft,” Phillips said, apparently preempting Tuesday’s announcement. Pricing for SQL Server 2000 starts at US$4,999 per processor.

Microsoft did not immediately respond to requests seeking comment.

While Oracle’s database is known for performance and its ability to scale, the company has battled a reputation for complexity and high costs when compared to Microsoft, Phillips acknowledged in his speech. New ease of use features in Oracle 10g, combined with its pricing strategy, will help the company compete more effectively with Microsoft, he said.

Oracle’s Standard Edition One database was released in October. A few months earlier IBM Corp. also released a version of its database software for the midmarket. It retails for US$499 for the base server package plus US$99 per user, and is available for one- and two-processor systems.

— With files from Carly Suppa, IT World Canada.

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