Conor O'Mahony's Database Diary

In March 2010, Oracle reduced the price of the Exadata v2 hardware by 15%. The first thing that went through my mind when I read this is that high prices must be hampering Exadata adoption. This was reinforced by articles like Oracle users like Exadata idea but balk at price. But, after digging into the pricing a little more, we discovered that there are some very interesting alterations to the fine print in the Oracle price list that accompanied these changes. Here is the fine print that was in the price list prior to the pricing changes on 16 March 2010 (the highlighting is from us):

And here is the corresponding fine print in the current Oracle Exadata USA Price List:

You will notice that only 1 year of Mon-Fri, 8am-5pm basic “warranty” is included now. Previously, 3 years of 24×7 support was included. Of course, if you want, you can purchase 3 years of 24×7 support for an additional fee. It’s just that Oracle has decided to remove this from the base system and therefore reduce the value provided to clients.

Disk Retention Services are also no longer included in the Exadata price. And I also believe that Linux O/S support is no longer included in the Exadata software support. Finally note that hardware installation is no longer included in the price.

Oracle have indeed reduced the initial acquisition costs for the Exadata hardware, but they have also reduced what they are providing for those costs. Let’s have a look at those costs, highlighting the removed items. Here are the 3-year costs for the different Exadata systems before 16 March 2010:

Note: These Exadata prices do not include the cost of the Oracle Database software that is required. For more information, see A Closer Look at Exadata v2 Costs.

And here are the 3-year costs to purchase the same Exadata configuration. I’ll leave out the bundled hardware installation prices, but be aware that these are additional costs.

Now, let’s compare the two:

Some customers may be happy with a Mon-Fri, 8am-5pm hardware warranty. However, even in this case, those customers will now have to pay for coverage in years 2 and 3. And, of course, they may also need to pay for Disk Retention Services, Linux support, and installation. The worst case scenario (if they purchase the equivalent of the base system from before 16 March 2010) is that these customers end up paying an additional 40% or so more over 3 years. The best case scenario is that these customers will still pay a significant amount more for Exadata over 3 years. And this is after a supposed price reduction

Oracle list the following costs for a full-rack Exadata system:

• $1,150,000 for the hardware
• $1,680,000 for the storage server software

However, there was an asterisk next to the storage server software price. In small print, it says that you must “Use your existing database licenses“. That of course assumes that you have available licenses of Oracle Database and all required add-on features. Of course, I probably don’t need to mention Oracle’s reputation for auditing customer environments and later discovering very large compliance issues. Business Week covered this very topic last week in a very interesting article titled Oracle Has Customers Over a Barrel. Here is a short excerpt from that article:

One sore point with customers is the company’s audits. Most software companies audit their customers occasionally, checking through their offices and tech systems to make sure they’re paying for all the software they use. But Oracle has a reputation for being unusually aggressive, says Jane Disbrow, an analyst at Gartner Research (IT). She says Oracle’s policies can be confusing, and contracts with customers often don’t clearly spell out their rights. As a result, some get presented with bills ranging from $200,000 to $4 million after they get audited. “It’s easy to be out of compliance with Oracle licensing. They do nothing to help people stay in compliance,” says Disbrow. “Then they audit you and hand you a big bill.”

I thought it would be interesting to to to figure out what a full-rack Exadata system would cost when you include all the required and recommended software. And, of course, when you include the first year of maintenance. Note that I am making some educated guesses here. For instance, it appears that Oracle require you to buy Advanced Compression because the compression now occurs in the storage. In time, I’m sure that details like this will be flushed out. In the mean time, here’s my current best guess at the math:

$1,150,000 for the hardware
+ $1,680,000 for the software on the storage servers
+ $369,600 for Support & Maintenance on the Exadata storage software (calculated at 22%)
+ $1,520,000 for Oracle Enterprise Edition ($47.5k * 8 servers * 8 cores * 0.5 Intel core factor)
+ $736,000 for Oracle RAC ($23k * 8 servers * 8 cores * 0.5 Intel core factor)
+ $368,000 for Oracle Partitioning Option ($11.5k * 8 servers * 8 cores * 0.5 Intel core factor)
+ $368,000 for Oracle Advanced Compression ($11.5k * 8 servers * 8 cores * 0.5 Intel core factor)
+ $160,000 Enterprise Manager Diagnostic Pack (recommended)
+ $160,000 Enterprise Manager Tuning Pack (recommended)
+ $728,640 for Support & Maintenance on the above non-storage database software (calculated at 22%)

That all comes out to a whopping $7,240,240 for license and first year support/maintenance, which is a little more startling that the $2.7M indicated in the Oracle materials. Of course, this is the list price, and does not reflect any discounts you may be able to negotiate. A couple of additional things to consider:

• The list price for the annual support costs of the above software components is $1,098,240.
• Don’t forget that these costs do not include installation, which is a custom quote.