Jacqueline Woods VP Pricing Licensing Strategy Office

Jacqueline Woods VP, Pricing & Licensing Strategy Office of the CEO Oracle Corporation

An Insider’s View: Oracle Technology Pricing and Licensing

Agenda Ÿ Overview Ÿ Database Basics Ÿ On Migrations Ÿ Resources Ÿ Q&A

Overview

“The ability to gather, arrange and manipulate data with computers has given business people new tools for managing. ” - Peter Drucker

In the beginning… it seemed easier

Client Server: Desktop Client Database

Current Business Climate Ÿ Increased Complexity & Highly Sensitive Ÿ Heightened Security Concerns Ÿ Worldwide Economic Downturn Longer than Expected Ÿ Increased Scrutiny On All Business Transactions -- Corporate Governance

Licensing Snapshot Current Environment: • Today’s Customers want to buy software as needed; eliminate shelfware • Customers say they need more flexibility • More inquiries about Utility models, Capacity and Subscription models • License compliance industry problem causing customer anxiety

Now it’s more… sophisticated, more complex

Multi-tier Climate: E-Commerce Database Application Server Desktop Client

Is there a holy grail for pricing and licensing?

Objectives Simple Flexible Transparent Technology changes …. are catalysts to licensing changes

Perception is Everything… Perception 1. Pricing is complex 2. Too many changes Reality 1. Pricing is rich with nuances to treat everyone fairly Oracle was 1 st vendor to publish price list and its licensing policies 2. Licensing is an evolutionary process – IT environment is dynamic –

Price is not Just a Number Metric Term Named User Plus Processor Perpetual Term (1, 2, 4 year) License Type Full Use Application-Specific Embedded Support Software Update Product Support There is a license suitable for every customer’s needs

Database Pricing

Goals: Streamline Costs • Select the most suitable licensing metric • Determine appropriate product and license terms to meet your needs • Evaluate maintenance fees • Financing • Promotions

Database Metrics Ÿ Named User Plus – Based on users and non-human operated devices accessing the Database – Used in environments where users can be counted Ÿ Processor – Based on the number of processors in the server where the Database is installed and/or running – Used in environments where users are uncountable

Named User Plus or Processor? Important Things to Consider Ÿ Is your user population countable? Ÿ Is your user population greater than 50 Named User Plus per Processor? Ÿ Does your user population often change and thus makes it difficult to track? Ÿ Do you need unlimited access to the Database?

Counting Named User Plus Count all individuals and non human operated devices accessing the program or minimum, whichever is greater ŸIndividuals: include users accessing the database & users operating devices that access the database ŸNon-human operated device examples: temperature devices in a warehouse ŸMinimum: – – – Database EE: 25 Named User Plus per Processor Database SE: 5 Named User Plus IAS EE or SE: 10 Named User Plus per Processor

Counting Processors • All processors on the server where the program is installed and/or running must be counted – Exception: server is hardware partitioned ŸMinimum: 1 Processor ŸMaximum: only applies to the Database Standard Edition where it can be deployed on a server with a maximum capacity of 4 processors

Term Licenses Perpetual 4 Year Term 60% of List 2 Year Term 35% of List 1 Year Term 20% of List

Support Offerings Software Updates Ÿ Software updates and upgrades Product Support Ÿ 24*7 phone support Ÿ Email support Ÿ Software Updates mandatory Advanced Product Services Ÿ Customized support E-Business Support Pricing constant since 2000

License Type More rights Full Use More value ASFU / ESL Less rights Less value Restricted Use

E-Business Discount Transaction Band Discount $0 - $25, 000 0% $25, 001 - $50, 000 5% $50, 001 - $100, 000 10% $100, 001 - $250, 000 15% $250, 001 - $1, 000 20% $1, 000, 001 + 25% • Mandatory discount given to every customer • Based on the size of the transaction (includes license and support fees)

Flexible & Affordable Acquisition Options Oracle Financing • Flexible solutions • Oracle Payment Plans • Oracle Leases Monthly Price* 3. 0% 2. 6% * 36 months • Customer Benefits • Overcome budget constraints • Conserve capital • Simplify with fixed, predictable payments

Migrations

Migration “Architectural changes drive software license changes” Concurrent Device may be measurable in a 2 tier environment (older architecture), but isn’t measurable in a multi-tier environments New metrics must be introduced to address new needs

Database Metric Evolution Concurrent Device Network Licenses Named Single Server Named User Multi Server Universal Power Unit Named Users Plus Processor

Conversion Factors for Current e-Business Database Metrics Objective: Protect Customers’ Investment 50 Named User Plus = 1 Processor 75 Concurrent Devices= 1 Processor 1, 000 Universal Power Units = 1 Processor 1 Concurrent = 2 Named User Plus

Simple Example Licenses Owned: 300 Concurrent Device licenses Need: Unlimited number of users Proposed conversion: Concurrent Device is no longer adequate metric for desired usage, customer should migrate to the Processor metric Conversion factor: 300 Concurrent Devices /75 = 4 CPUs • If the Oracle DB is running on a 6 Processor machine, you will need an additional 2 Processors: – 2 * $40, 000 per Processor = $80, 000 list license price – 2 * $8, 800 per Processor = $17, 600 list support price – Migrated CD support is the lesser of migrated licenses Business Support fee or “old” support fee e-

Oracle Software or ‘Shelfware’ Today’s reality: Many Customers are Downsizing What’s happens to unused software? – When should you reduce your number of licenses? – Only if the employee reduction is a long term plan – Not cost effective to cancel support and license, if having to re-purchase both a year later

Resources

A N N O U N C E M E N T Specialty Pricing Seminars

The Software Investment Guide For an explanation of: • Pricing & Licensing Practices • Software & Service Offerings • Total Cost of Ownership analysis • Links to Supporting Documents …and much more, download the SIG

Where to Get More Information…… Pricing and Licensing Website www. oracle. com/corporate/pricing Customer Pricing Inquiries Pricinginquiry@Oracle. com

Q & A QUESTIONS ANSWERS