Oracle has become one of my most potent sales tools with government agencies. True, the talk in Washington these days is the threat of furloughs, and that looming reminder to cut costs has helped drive more inquiries. And to be sure, the US government under the Obama Administration has been working hard to adopt more open source technologies.
But one of the biggest things motivating federal IT chiefs to look me up has been Oracle’s own pricing policies. They run counter to the US government’s efforts to cut costs and modernize, especially when it comes to hardware.
Processing power, and more importantly how much of it you can pack into a single box, has skyrocketed. Boxes that had two cores five years ago now have eight and before long replacement boxes will have even more than that. The bad news is that Oracle licensing is based on the number of cores in your server. With that kind of licensing scheme in the mix, adding more power to your back end doesn’t mean faster data, it means your data just costs you more. A lot more.
Let’s look at how much more, shall we? I love this part.
Imagine you bought a server four years ago with a two-socket dual core. Today, the same money you spent will buy a server with two sockets and six cores. This change in hardware means your Oracle licensing costs double. We license by socket, and we’re less than $10,000 for two sockets. Your licensing costs with our Postgres Plus Advanced Server would not go up. But based on the list price for Oracle of $47,000 per core, just to upgrade your hardware means paying $94,000 for the same two cores you had before PLUS another $188,000 in new licensing fees for the power boost you got from two additional cores in the server. Now multiply that by the number of servers in your favorite farm and you’ll be calling me too.
Updating and Upgrading
Government agencies are working to modernize their infrastructure as well as upgrading according to obsolescence schedules. The Department of Defense is particularly aggressive with its Plan for Modernization. We’re working with one government organization that is modernizing its entire environment. We’re talking about a massive data center with multiple sites. They came to us because they discovered when running the numbers for new servers using Oracle math, their hardware upgrade was going to require millions more in new Oracle licensing fees.
Not surprising they came to us. The database, when it’s from a traditional provider, can easily represent about 60 percent of cost of the enterprise software stack based on common pricing estimates. So cutting that cost to a fraction has a big impact. I can thank the database giant for a big chunk of the 40 percent increase in government deals we’ve signed in 2012, with integrators and agencies alike. We’ve also reached the kind of critical mass of customers and prospect inquiries that make your email inbox resemble a stock ticker.
So next time a hardware vendor announces a hot new server with huge gains in processing power and loads of cores, you’ll know I’ll be watching my email and keeping my phone glued to my ear.Tweet