Oracle user open to flat-fee licensing plan

At least one large local user of Oracle's applications is cautiously hopeful about the vendor's new flat-fee pricing, if it makes its software licences more competitive.

At least one large local user of Oracle’s applications is cautiously hopeful about the vendor’s new flat-fee pricing, if it makes its software licences more competitive.

Oracle has finally offered up qualification details on the pricing scheme, including companies having to standardise on Oracle’s e-business suite, a $US250,000 minimum purchase and buying software licences for at least 20% of their workers to qualify.

Three weeks ago Oracle chief Larry Ellison announced the flat-fee plan without fully spelling out what it would entail.

No New Zealand organisation has bought the entire suite, though companies such as National Bank and Fonterra use large portions of it. Fonterra, for example, also uses SAP, JD Edwards and vertical applications such as Vistera for export documentation.

Donald Moore, who is in charge of technology architecture and strategy at Fonterra’s milk products arm, NZMP, says the company is a very large Oracle user.

“We welcome anything to do with the quality of the product and competitiveness of pricing,” he says.

The new model replaces more than 20 different pricing criteria for various applications. From February 1, users can pay all-encompassing Oracle 11i licence fees of $US4000 for full-fledged users (more than 50 applications) and $US400 for workers who need to access only such things as e-procurement and employee self-service applications.

Applications specific to vertical markets such as public sector, university and financial services, communications or utilities are also not included in the new pricing regime. Though these fee rates and the $US250,000 minimum spend have been announced in the US, New Zealand pricing has not yet been set.

Customers will still have the ability to buy individual applications, though Oracle claims companies that are standardising on its e-business suite could cut the prices they pay by up to 75% per user through using the new pricing.

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