Oracle Succumbs to User-Based Pricing

Wednesday Jan 28th 2004 by Staff

By overhauling its pricing model, the business software giant could expand beyond its traditional high-end customer base.


Oracle (Quote, Chart) on Tuesday laid a path to lead its customers toward using its outsourcing tools and services in their enterprise.

The Redwood Shores, Calif., business software maker is now offering user-based pricing, letting companies license its software as a managed option on a per-user basis. In the past, some have complained that Oracle's licensing fees were too expensive and its terms too long. In reality, the company's previous model only lumped a 5 percent hosting fee into the cost of a software licensing fee for applications like Oracle's E-Business Suite.

Now, Oracle customers will have a simplified model to work with, says vice president of global pricing and licensing strategy Jacqueline Woods. The company is offering one or multi-year contracts with a 30-day cancellation, choice in hardware location, and outsourcing offerings that include its entire product line. The model lets customers better forecast how to allocate an IT budget throughout the year, Woods said.

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