Oracle modifies pricing and bundling of apps

Oracle has unveiled new software licensing terms which, it claimed, would make it easier for users to qualify for the flat-fee...

Oracle has unveiled new software licensing terms which, it claimed, would make it easier for users to qualify for the flat-fee pricing the company put in place 14 months ago.

But Oracle has also removed some products from the software bundle covered by the flat fee, which allows users to license a set of the company's E-Business Suite applications for a single price.

The modules that were cut - which are, primarily, user self-service tools in areas such as human resources - will now have to be bought separately.

On the plus side, Oracle has eliminated a requirement that customers spend at least $250,000 to qualify for the all-encompassing pricing. It's also reducing the minimum number of employees for which a company needs to buy licences, from 20%  to 10%.

"We've streamlined [the pricing] and made it more flexible, not only for smaller customers, but larger customers," said Jacqueline Woods, vice president of global practices at Oracle.

Company officials decided that the previous user-licensing minimum "was more than the market could handle under the current economic conditions", she added.

The changes could help some companies reduce their licensing costs, but users will still be able to buy any of Oracle's applications individually if it worked out less expensive than the flat fees.

Like SAP, Oracle has had a mishmash of pricing structures because it offers such a wide range of applications, said Joshua Greenbaum, an analyst at Enterprise Applications Consulting. The flat-fee pricing scheme was designed to address that, but Greenbaum said the $250,000 minimum buy-in figure had acted as a deterrent to smaller companies.

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