Falling Dollar Leads to Oracle Enterprise Software Price Increases
Oracle recently announced a 15 percent hike in prices for some enterprise applications, and Forrester Research predicts there's more price increases from other U.S. vendors on the way.
"With Forrester's estimate that more than 50 percent of Oracle's sales and sales expenses are incurred outside of the U.S.," Wang writes, "the currency issue has hampered this margin objective and created pricing arbitrage." (Wang notes that Forrester and other analysts firms have recommended that their clients purchase enterprise software in non-dollar currencies to "take advantage of the currency arbitrage.")
As of late, Oracle's financial results have come to signify the relative strength of the U.S. technology marketplace, as viewed by Wall Street. Therefore, enterprises should figure that more U.S.-based software companies may be increasing prices on their software and products.
"Dollar devaluation not only affects the price of oil, but now enterprise software as well," notes Wang. "Expect other US-based software vendors with a global presence and single global price list to make changes to the 'Silicon Dollar' equation and raise prices accordingly."
