As widely reported, Oracle has announced a new pricing scheme which it says makes it more affordable for customers to run Oracle software on multi-core chips. Or does it?
The issue arises because many software vendors have historically charged customers based on the number of processors their applications run on. But several of the chip manufacturers have started wringing more power from their processors by adding an extra core, instead of simply trying to make the chip faster and faster. IBM started the trend with its dual-core Power4 chips in 2001, and HP and Sun duly followed suit, with AMD and Intel now doing the same with their Opteron and Pentium D processors.
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That in turn saw Oracle initially saying that each core is counted like a single processor as far as its licensing is concerned, so running a dual-core chip costs twice as much as a single core chip. Since then it’s faced a certain amount of pressure from the chip vendors, who consider that charging double for a dual-core chip could reduce demand for their latest processor architectures, and who point out that other major applications vendors still treat multi-core chips as a single processor.
Seemingly responding to this mounting pressure, Oracle announced a new pricing scheme last week to cover multi-core chips. Each core is now counted as 0.75 of a processor as far as pricing is concerned, with the catch being that the result is rounded up to the nearest whole number. That means that a dual-core processor is charged at 2 x 0.75, which comes to 1.5, which is then rounded up to 2. So a dual-core processor is still charged the same as having two physical processors.
Admittedly, the maths start to offer customers a discount when you move up into the area of 4 or 6 cores on a processor, whereupon the scheme does see considerable discounts on Oracle’s previous pricing policy. For instance a 4-core processor is charged the equivalent of 3 processors, and a 6-core processor is charged the equivalent of 5 individual processors.
But with dual-core processors likely to be the most common for at least the next few years, and Oracle’s new pricing strategy still charging customers the same for a dual-core chip as if they had two separate processors, the question remains whether Oracle is really keeping up with the times. Just as importantly, will Oracle look expensive compared to the rival applications vendors who will continue to charge per chip, and not per core? We shall have to wait and see.
