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Pricing Wars

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Date: Tue, 13 Jun 2000 09:32:24 -0400
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Hey, For those of you who have been as baffled by Oracle's Power Unit pricing scheme as I have been, give a read from InformationWeek:

Microsoft is changing the way it licenses server products to bring its pricing in line with the expectations of E-businesses. Starting with this fall's release of SQL Server 2000 database, Microsoft will start charging customers by the number of processors running its software, instead of according to the number of end users.

The change, which will apply to five additional server products, is designed to replace a complex licensing scheme and to match more streamlined pricing practices of its database competitors. Under the current system, companies buy from Microsoft resellers a combination of server licenses, client-access licenses for named users, and Internet-connector licenses for unnamed users, such as shoppers on an E-commerce site or guests at a marketplace. More confusing, the rights associated with each type of license differ by product.

"Most customers were probably not getting it right," says Barry
Goffe, group manager for Windows DNA at Microsoft. "Customers said, 'How do I know how many people are connecting to my Web site?' And our answer was, 'Guess.' Customers never knew if they were in compliance."

Under the new system, companies buying SQL Server 2000 and the upcoming Application Center 2000, BizTalk Server 2000, Commerce Server 2000, Host Integration Server 2000, and Internet Security and Acceleration Server will pay a fixed rate per CPU, regardless of the number of end users for an application. Companies will need only to calculate the total number of CPUs running the platform software and discontinue buying separate server, client-access, and Internet-connector licenses, Goffe says.

"Microsoft is raising prices in the enterprise market," says
Terilyn Palanca, a director at Giga Information Group. That's OK, since moving the price of its database closer to offerings from Oracle and IBM will help ease customers' perception that SQL Server is a departmental product, she says. "As you get into large-scale deployments, pricing on a client-access basis would be so onerous to calculate. If you want the recognition of an Oracle or an IBM, you'd better be priced like that." - Aaron Ricadela Received on Tue Jun 13 2000 - 08:32:24 CDT

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