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Oracle Raises Prices Significantly for Some Products

By Chris Kanaracus

June 19, 2008 — IDG News Service —

Amid tough economic times and about a week before its fiscal year earnings report, Oracle has pushed through a number of significant price increases on its products.

For example, a CPU license for its database is now US$47,500, up from $40,000.

Other price increases -- including among Oracle's E-Business Suite applications -- also fall into the 15 percent to 20 percent range.

Oracle also appears to have raised prices for software it gained through its recent acquisition of BEA.

The new price sheet states that a license for the BEA WebLogic Server Enterprise Edition is $25,000. An official copy of an older BEA price list was not available, but one BEA reseller's site lists the higher-end version of the product at $17,000 per license. Both sources have the low-end version at $10,000 per CPU.

An Oracle spokeswoman declined to comment on the price changes on Thursday.

List prices aren't necessarily what customers pay for software products, as the cost often gets lowered dramatically through negotiations, said Ray Wang, an analyst with Forrester Research.

However, "these price hikes do raise the floor on pricing, and customers who would expect a 50 percent discount would have to ask for a 60 percent discount to get the same effect," Wang said.

Discounting has become so common and so dramatic that "the only way [vendors] can pass on any increase is to do it through the base," Wang said. "It's like when you buy a car and get $1,000 off the list price. You tell your friend and they say 'Hey, great deal.' But you paid $500 more than it cost last year."

Oracle is expected to release its fourth-quarter and fiscal year 2008 results on June 25.

The company has been generally tight-lipped about its plans for the BEA product portfolio, but has scheduled a webcast for July 1, saying executives will reveal additional information.

 

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