The big Oracle swindle?

Oracle has always come under fire for its complex pricing structure. Analysts have said it, customers have said it, and last year Oracle itself said it. It's all just so confusing.

At Oracle's Openworld event last year, the company introduced a new database pricing structure based on a per processor model. Customers paid a licence fee depending on the number of processors in a computer. Previous pricing structures had charged on factors such as speed and power.

At the time Oracle admitted its complex approach had played right into the hand of industry rivals, providing them with fodder for aggressive marketing attacks.

Now they've done it again. Changes to database pricing, introduced in 2000 and 2001 and now being implemented have raised the wrath of customers and analysts.

Yesterday the Meta group issued a report questioning the legality of Oracle's latest move, recommending that customers affected by the pricing changes refuse to pay the extra charges.

Some of Meta's US analysts have even suggested customers fight the company in court.

The dispute centres on Oracle's decision to 'redefine' the terms of some contracts. Users that were once covered by a batch licence now need individual user licences. For some customers that means a bill of millions of dollars.

Meta points out that Oracle has targeted 'a handful' of large, corporate accounts - or customers with money. Meta also points out that Oracle has increased the number of contract reviews it has conducted over the past two quarters.

In the same two quarters Oracle has seen revenue and profit drastically fall. In third quarter results, announced last week, licensing revenue was down 30 per cent on the same quarter in the previous year.

All this despite the launch of its new 9i database in June of last year, new CRM applications, and a closer focus on hosted software.

Clearly, cynics hold that Oracle is clamping down on licensing charges to boost revenue. Oracle's view is that nothing has changed. Its pricing policy has been consistent - and complex for several years now, and some customers are just a bit confused about minor changes that are just now being implemented.

Still confused? Contact Oracle headquarters in California and they'll be glad to clarify the situation.