Oracle increases prices 15 to 20 percent: The joys of pricing power

Oracle is increasing prices while simultaneously hoping to make its prices lower through open source. Double standard?

And you thought Oracle was already pricey...

In a demonstration of what can happen when a company consolidates the industry such that there's far less competitive pressure on it, Oracle has significantly raised its prices. Many of its products saw a 15 to 20 percent price increase.

While the rest of the industry sees price declines through pressure from open source and SaaS, as well as a shift away from license revenue toward maintenance revenue, Oracle is happily raising prices and, presumably, its customers are (un)happily paying. Dave Rosenberg suggests this is a good move since Oracle discounts so much, this is a way to keep discounting but make 15 to 20 percent more.

He may be right, but then, why is Oracle beating on the Unbreakable Linux drum (somewhat feebly these days, to be sure)? Oracle wants everything in the software stack to be cheap...except for its own software. This isn't a criticism, but it's telling that Oracle started slapping Red Hat around when it couldn't get the Linux vendor to drop the price of RHEL to make Oracle database prices appear lower.

It will be interesting to see if Oracle buys into various parts of the software stack in order to effectively drop the price for its databases, applications, etc. Make the infrastructure free so that everything else Oracle sells...is not. Anyone surprised as to why Red Hat wasn't jumping up and down with glee at this prospect?

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About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.

     

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