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

An Insider’s View: Oracle Technology Pricing and Licensing

Agenda  Overview  Database Basics  On Migrations  Resources  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 it seemed easier

Client Server: Desktop Client Database

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

Licensing Snapshot 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 Current Environment:

Now it’s more… sophisticated, more complex sophisticated, more complex

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

Is there a holy grail for pricing and licensing?

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

Perception is Everything… 1.Pricing is complex 2.Too many changes Perception 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 Reality

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

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  Named User Plus – Based on users and non-human operated devices accessing the Database – Used in environments where users can be counted  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  Is your user population countable?  Is your user population greater than 50 Named User Plus per Processor?  Does your user population often change and thus makes it difficult to track?  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  Individuals: include users accessing the database & users operating devices that access the database  Non-human operated device examples: temperature devices in a warehouse  Minimum: – 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  Minimum: 1 Processor  Maximum: 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

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

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

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

Oracle Financing Monthly Price* 3.0% 2.6% * 36 months Flexible solutions Oracle Payment Plans Oracle Leases Customer Benefits Overcome budget constraints Conserve capital Simplify with fixed, predictable payments Flexible & Affordable Acquisition Options

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 Named Single Server Named User Multi Server Universal Power Unit Concurrent Device Network Licenses 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 e-Business Support fee or “old” support fee

Oracle Software or ‘Shelfware’ Today’s reality: Many Customers are Downsizing –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 What’s happens to unused software?

Resources

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

The Software Investment Guide Evaluate Our Pricing Read the Software Investment Guide to understand pricing & licensing policies …

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 Customer Pricing Inquiries

A Q & Q U E S T I O N S A N S W E R S

Accounting for Data Transfers  Definition: data transferred from a database to a database  Licensing rule: batching included with the Processor and Named User Plus licenses  Historical: prior to Named User Plus and Processor, batching was counted at the front end Batching Licensing rule was changed to avoid having customers pay twice: once for Oracle and once for another relational database vendor

Accounting for Data Transfers  Definition: data transferred from an interface to a database  Licensing rule: users and/or devices must be counted at the multiplexing front end  Comments: – A multiplexor concentrates and masks users, thus making it impossible to count users, unless counting at the front end – Industry-wide licensing practice Multiplexing

Accounting for Data Transfers  Definition: Data exported/imported to a database  Licensing rule: User and/or devices importing/ exporting flat files must be counted as actual users  Historical: Named User metric: users who were creating, updating, importing and exporting flat files were required to be licensed Flat Files Importing/exporting flat files is a highly manual process and Oracle did not want to penalize customers by charging users who were only creating files and not accessing the Database

Energy Sector Example Meter RTU House Remote Terminal Unit RTU Communication Server In the energy sector, meters are counted as Named User Plus licenses Oracle Database EE

Automated Batch 2,500 users are uploading flat files (txt) via FTP sent manually to communication device once a day Data stored on the communication device is automatically batched into the Oracle Database Example #1 Oracle DB EE 4 CPU Communication device 2,500 End-User

The communication device is consolidating the flat files and concentrating actual users and actual usage  the communication device is acting as a multiplexor Each user at the front end of the multiplexing process must be counted (the 2,500 users are counted) 4 Processors or 2,500 Named User Plus (minimum = 25 * 4 Processors, actual users = 2,500 users) Answer #1 Licenses required:

2,500 users are uploading flat files into a flat file database (non-relational database) once a day Data stored on the flat file database is automatically batched into Oracle Database Flat File Database Example #2 Automated Batch Oracle DB EE 4 CPU 2,500 End-User

Answer #2 Similarly to the communication device, the flat file database is consolidating the flat files and concentrating actual users and actual usage  the communication device is acting as a multiplexor Each user at the front end of the multiplexing process must be counted (the 2,500 users are counted) 4 Processors or 2,500 Named User Plus (minimum = 25 * 4 Processors, actual users = 2,500 users) Licenses required: