Oracle database aims to fill SMB niche

After much umming and ahhing, Oracle said it will offer a less-costly version of its database for small and mid-size businesses.

Called Oracle Standard Edition One, the SMB version is based on the current Oracle9i code and is priced at US$5,995. It is limited to use on one-processor servers, according to Oracle.

Alternatively, Oracle Standard Edition One can be sold for US$195 per named user with a minimum of five users. Support and maintenance add 22 percent of the licence cost, and Oracle's eBusiness discounts apply, an Oracle spokesperson said. So support and updates for Oracle Standard Edition One would cost US$1,319 for the one-CPU licence and US$214 for five named users.

The new offering brings Oracle's total number of database editions to three. The Enterprise Edition costs US$40,000 per processor for a perpetual licence or US$800 per named user. The Standard Edition is US$15,000 per CPU or US$300 per named user.

In contrast, Microsoft is now offering Small Business Server 2003 with SQL Server for US$1,499, or about US$4,500 less than Oracle Standard Edition One.

'In the small and mid-size business space, a US$6,000 Oracle database server would not interest me versus [Microsoft's] SQL Server, especially with what Microsoft is doing with Small Business Server,' said Ben Holtz, president of Green Beacon, a US-based reseller.

Oracle's SMB database is in the same price range as IBM's DB2 Express, which sells for US$499 per server plus US$99 per named user, not including support. Microsoft SQL Server 2000, a huge force in the mid-market, costs US$4,781 per CPU for the standard edition, or US$667 per server plus US$146 per device.

Oracle has said it plans to ship its next major release, Oracle 10g, by year-end, and customers with up-to-date licences and maintenance typically get the next major revision at no extra charge.

Oracle pricing has been under scrutiny of late. While the vendor is strong in enterprise accounts, it has struggled to price aggressively for departmental or small-business use.

At OracleWorld last month, Oracle Chairman and CEO Larry Ellison said published price changes were imminent, but they never came. Industry observers say they still expect Oracle to offer more aggressive prices on its Real Application Clusters, which now cost US$10,000 per CPU over and above the database price.