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App server price slashed as Oracle discovers midmarket

Oracle is close to launching a half-price version of its application server for small and medium-sized businesses.

Called Oracle Application Server Standard Edition One, the bundle will include Oracle's app server, web server and portal software. Oracle plans to charge $5,000 (£2,750) per processor for deploying Standard Edition One on a maximum of two servers.

There are no other restrictions on the software's use, according to Oracle's Thomas Kurian, who said it would be launched at the Oracle OpenWorld conference in London in September.

Kurian said Standard Edition One furthered Oracle's strategy of increasing the licensing options for customers interested in buying only part of its application server suite, which the company sees as an underserved market.

IBM, one of Oracle's biggest rivals, has been offering a discounted version of its application server software and other midmarket technology for the last two years. And application server specialist BEA has talked about a midmarket version of its WebLogic platform.

Microsoft competes heavily in the midmarket, but Oracle sees an opening in Microsoft's Windows-only stance. Kurian said Standard Edition One would support both Windows and Linux and undercut Microsoft on licensing costs.

Forrester Research analyst John Rymer said Oracle could do well as long as the bundle - which he has not yet seen - was well-integrated and easier to manage than rival products. In recent tests of competing enterprise application server suites, he found Oracle's better integrated.

"IBM's midmarket offering is aspirational more than anything else," Rymer said. He added that cheap or free products from companies like JBoss wouldn't appeal to all companies because of the development expertise required to use them. With so many suppliers deeply discounting prices, what really mattered for users was the cost of maintaining and using software, he said.

Oracle already uses the Standard Edition One label with a midmarket version of its 10g database software. Kurian said Oracle would encourage channel partners selling the Standard Edition One database to tout the application server bundle.

Stacy Cowley writes for IDG News Service


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