Oracle to post pricing policies online
Published: 28 Aug 2002 15:13 BST
Oracle, the world's second-biggest software maker, said on Wednesday it will make its global pricing policies public next week, in a move analysts said could benefit both the company and its customers.
"Pricing is one of the last frontiers of transparency in the software industry," said Joshua Greenbaum, principal of industry research firm Enterprise Applications Consulting.
"They really are trying to make some sense out of what is a pretty complex set of products and buying options... The more the customer knows, I think, the better for everybody," he said.
Oracle officials said they had been planning to release company pricing policies, in a document called the "software investment guide," for some time and that the move is not in response to any particular incident.
"It's not to address an issue... It's really to provide more information to people so they can make better business decisions," Jacqueline Woods, Oracle's vice president of global practices, told Reuters.
The move, however, arrives on the heels of several high-profile and unflattering news stories about Oracle's selling and pricing practices.
In July, California scrapped a $95m software contract with Oracle after a lengthy and highly politicised controversy over the deal's terms, and potential conflict of interest charges against senior aides to Gov. Gray Davis.
In March, some Oracle customers complained that company representatives told them they were not paying enough for their use of the Oracle's data warehouse software, which creates reports from reams of information culled from various sources.
The negative publicity also came amid stubbornly weak corporate demand for technology products, prompting several analysts to question whether it might compound Oracle's woes at a time when sales at big high-tech shops already are hurting.
"I think it's a positive move," META Group senior analyst Mark Shainman said of Oracle's soon-to-be public pricing policy.
"Oracle realises they don't want this to be a centrepiece issue when they deal with their clients. They want the centrepiece to be their technology and how sophisticated it is," said Shainman, who had not yet seen the document that Oracle expects to post to its Internet site early next week.
The document aims to answer about 90 percent of the questions Oracle customers would have, Woods said.
Among other things, it will provide standardised prices, definitions, illustrations and guidelines that customers can use to make buying decisions.
"It's really important that people understand they have choices," Woods said.
Woods added that Oracle is not changing its pricing or volume discounts with the release of the document, nor is the company planning a wholesale move to the subscription model of software pricing.
Shainman said he would be going through Oracle's published pricing and policy terms with a fine-toothed comb.
"Are they going to be positive or negative to the end user? We're going to have to wait and see," he said.
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