Is Oracle technology too darn expensive?

Mark Brunelli, News Director

Nearly half of all respondents to a new member survey say they'll at least consider lower-cost alternatives to Oracle technology this year -- and the main reason they cite for doing so is recently surveyed 683 IT professionals who have a say in the IT decision making process at Oracle shops representing a wide variety of industries and found that 48% are more seriously considering alternatives to Oracle technology than they were a year ago. Among that group, 73% say that the high cost of running Oracle database or business applications technology is the primary reason why. Some of the other reasons respondents are considering Oracle alternatives include ease of use, support and functionality issues.

But according to IT industry experts and Oracle customers, a software company cannot be judged by list prices alone, and it's important to remember that large software vendors like Oracle frequently give out major discounts to qualified customers. It's just a matter of knowing how to get them.

Support: Do you get what you pay for?

IT industry analysts point out that the Oracle Database boasts the most expensive list price of any major database management system (DBMS) on the market, at $40,000 per CPU. In comparison, Microsoft SQL Server starts at $25,000 per CPU, they said.

The reason that Oracle is able to command such a premium for its products has to do with its respected brand name and the fact that customers can count on getting superior technical support for their mission-critical database workloads, said Tony Iams, a vice president and senior analyst with Ideas International in Port Chester, N.Y.


But those words are of little consolation to people who find Oracle's support offering to be less than satisfactory -- people like Rob Guest, a senior database analyst with the British Columbia Institute of Technology (BCIT), a Canadian polytechnic school.

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BCIT is currently in the process of upgrading from Oracle Database 9.2 to Oracle Database 10g, the latest version of Oracle's flagship DBMS, but dealing with Oracle support during the transition has been "terrible," Guest said.

"Communicating with Oracle support has probably been our largest issue. They're just not a good vendor to deal with as far as support," Guest said. "We've had Oracle since 1994 and they're making strides to get better -- and I would say they've become better in the last year or so -- but there are still many cases where you phone support and they don't seem to know anything more than you do."

Guest, who uses Oracle Database to back up BCIT's SunGard Student Information application implementation, said the most frustrating aspect of Oracle support is that support technicians tend to rush through support calls and close tickets too quickly. He said it has gotten to the point where he now believes that Oracle technicians are given incentives based on how many support tickets they close.

"They're trying to give you the quick answer and trying to close the contact as quick as they can," he said. "They don't really seem to listen to what the problem is."

Guest said it's equally frustrating when the support person they're dealing with on a particular problem gets sick, is transferred or goes on vacation and a new person is assigned to the issue -- a frequent occurrence which results in redundancy and wasted time, he said.

"I've had contacts where somebody new takes over and they'll tell us to do something that we've already done four or five days earlier," Guest said.

How to get a good deal on Oracle systems

One of the main reasons that Oracle is able to stay in business despite its high list prices is the fact that, like other major technology vendors, it often gives steep discounts to qualified customers.

As with any seller of goods, the best way to get a discount from Oracle is to buy in bulk whenever possible, says Noel Yuhanna, an analyst with Cambridge, Mass.-based Forrester Research Inc.

"If you're looking at acquiring new licenses, you have to group the licenses together," Yuhanna said. "Typically you don't get higher discounts on lower contract prices, so you want to group them together maybe over three years."

Ray Wang, another analyst with Forrester, adds that smaller organizations may be able to get a discount on Oracle business applications by taking part in Oracle's Accelerate program or by purchasing the technology from a reseller that offers its own small and midsized business (SMB) discounts.

"There are some great programs that are out there that are designed to help Oracle SMB customers acquire Oracle products at a reasonable price," Wang said.

A unique approach?

While Oracle may be just too darn expensive for some users, at least its list prices are easily accessible. That's more than can be said for some DBMS vendors, said Jason Bloomberg, a senior Web services analyst with ZapThink LLC, headquartered in Baltimore.


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