Oracle to lower multi-core pricing?

Oracle looks set to announce changes to its pricing strategy for dual-core processors that will result in lower prices for end users.

Until now the company has insisted on charging the same cost for software running on a dual-core processor as it does for software running on two separate processors.

An Oracle spokeswoman told ZDNet UK on Thursday that the company would be making a statement on Friday about "changes to multi-core pricing".

The company has been heavily criticised by the proponents of multi-core machines, including IBM and Intel. The problem, they say, is that as more cores are squeezed into each chip the software licences will increase in cost accordingly — but out of all proportion to the cost of the hardware.

There has been widespread speculation that Oracle is increasingly finding that its position had become untenable with users who would like to see more flexibility from Oracle on pricing in general, and on multi-core pricing in particular.

According to Information Week,  Oracle "will now count each core of a multi-core chip as three-quarters of a processor", resulting in a 25 percent price cut for users of multi-core chips.

Oracle refused to confirm this, but said that an announcement about its dual-core pricing would be made on Friday by Jacqueline Woods, vice-president of global pricing and licensing strategy at Oracle.

Earlier this year Woods roundly defended Oracle's strategy, using the analogy that if you "order two apples, it doesn't matter how the server delivers the apples to you… you will consume two apples. Processor licensing works the same way."

James Governor, principal analyst with consultancy Red Monk, believes that changes in pricing for multi-core chips will be part of the overall trend to reduce costs and simplify licensing. "There is no way that Oracle will tell anyone to go away rather than try to accommodate them on pricing on multi-core system", he said, "just as it will in other areas."