Oracle plays catch-up on multi-core pricing

Oracle announced it was revising prices for multi-core processors again on Monday, as it tried to find the right formula for both its customers and its bottom line.

The launch of Sun Microsystems Sun Fire T1000 servers has prompted Oracle to change the way it currently licenses software for machines with multi-core processors.

Under Oracle's previous licensing strategy, each eight-core "Niagara" T1 processor would have been licensed as if each core was three-quarters of a single-core processor so the "Niagara" would have been charged at the equivalent of six systems. Rather than make its databases on Niagara prohibitively expensive, Oracle will now charge one-quarter the licence fee of a processor per core, or the equivalent of two systems.

Intel and AMD multi-core systems are now are charged at 50 percent of a processor per core, but for high-end chips such as Power PC Oracle will continue to charge 75 percent of the processor rate per core. Only Sun's multi-core machines will enjoy the lowest price point of 25 percent of a processor per core.

It has taken the launch of the Sun Fire T1000 to finally prompt Oracle to establish a workable license model for multi-core processors. After the first multi-core processors launched last year, Oracle initially said it would charge on a per-core basis, so that each core would cost the same to licence as another processor.

In July the company relented and said that it would in future charge for each core as if it had three-quarters the power of a processor, making software on a dual-core system cost one and a half times the price of a single-core system.

But while Oracle took this tough stand, other software vendors offered more generous terms. Microsoft made it clear from the launch of the first multi-core chips that its prices would remain the same regardless of the number of cores. In August, VMware said it would follow Microsoft's lead.

IBM adopted one price regardless of the number of cores for its Intel and AMD systems, while charging a premium for its Power PC-based machines.

Earlier this year, Jacqueline Woods, vice-president of global pricing and licensing strategy at Oracle, roundly defended the policy of pricing on a per-core basis arguing that if you "order two apples, it doesn't matter how the server delivers the apples to you... you will consume two apples. Processor licensing works the same way."

That story has changed now and Woods argued this week that "as technology evolves, we have adapted our licensing models to accommodate those changes".