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Thu 11 Jan 2007 10:48 AM

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Oracle moves to make price right

The enterprise software giant is streamlining pricing across its entire product portfolio worldwide to make it easier for customers to navigate its solutions set.

With the large number of acquisitions Oracle has made in the last couple of years — including that of PeopleSoft for US$10.3 billion in 2004 and Siebel for $5.8 billion the following year — the company’s pricing for its various solutions has become increasingly complex.

The new licensing model, unveiled last month, does away with the old, disparate pricing structures of products that Oracle acquired and consolidates them into four programmes that cover all its solutions.

The programmes include a component model based on named user metric; a custom application suite model based on customers’ specific needs; an enterprise applications model, based on metrics such as revenue or number of employees; and a small and medium-sized business (SMB) model that provides pricing for customers who generate less than US$100million in revenue a year.

Oracle said the new models created consistency across all product lines and ensured customers could find the pricing and licensing solutions that met their specific business needs.

The company added that customers could use either the new pricing models or previous licensing models when purchasing additional products from old price lists, while newly released products would be offered under the new pricing models.

“We are combining the best of Oracle, PeopleSoft, Siebel and JD Edwards licensing programmes to provide our customers with a variety of flexible licensing models from which to choose,” said Jacqueline Woods, vice president of global pricing and licensing strategy at Oracle.

The pricing scheme has reportedly met with mixed reactions from clients who want to see pricing comparisons before making up their minds.

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