29 August 2002 Database giant Oracle is to release a guide to its software licensing policy in a bid to address criticism of its pricing practices from customers and analysts.
Oracle’s Software Investment Guide will include pricing information on all of its products as well as its services, including outsourcing and consulting. The guide will be available on the company’s web site from 2 September 2002.
Jacqueline Woods, vice president of Oracle’s global pricing and licensing strategy, said the guide will help its customers to “compare Oracle’s products and associated licensing options with those offered by other software and hardware vendors”.
Oracle’s move is a direct response to a wave of criticisms about its pricing policy from both customers and analysts – as well as a recent slump in sales. For its latest fourth quarter of 2002, Oracle reported revenues down 16% to $2.8 billion (€2.8bn), compared to $3.3 billion (€3.4bn) in the same period a year earlier.
One of analysts’ main criticisms relate to database licences issued before January 2000, when Oracle offered its database software on a per-user basis. The crux of this argument centres around how Oracle defines licence categories known as “multiplexing”, which has traditionally covered a pool of users that share a single database connection.
But in March 2002, analyst Charlie Garry at Meta Group slammed Oracle for changing the terms of some of its multiplexing licences to include everyday batch data feeds from non-Oracle applications into Oracle databases.
Shortly after this attack, analysts at Gartner warned customers to check the terms of their Oracle database licences. Gartner said that “highly inappropriate” fees were being charged by sales teams in a misguided attempt to boost revenues.
However, Oracle is not the only large software vendor that has frequently been lambasted over its pricing strategy. Other vendors include Computer Associates, Microsoft and Siebel Systems. Most analysts responded positively, but cautiously, to Oracle’s pricing guide.