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Analyst Firms Take Oracle to Task on Licensing

Oracle Corp. customers are calling IT analyst firms to complain that Oracle sales reps are trying to reinterpret their contracts to charge more for Oracle's database software.

Both Meta Group, which first publicized the issue last week, and Gartner, which weighed in this week, urge customers to push back against the software giant.

The problem arises from a contract provision called "multiplexing" that is designed to protect Oracle revenues in cases where a Web server or transaction processing monitor uses a shared pool of connections to the database. Although the users access the database, they do not connect directly. In those cases, Oracle requires that users buy licenses for all the users accessing the database from behind a Web server or TP monitor. Most customers resolve this issue by moving to per-CPU pricing.

However, Oracle sales reps apparently are now broadening the definition of multiplexing to include batch processes, according to the analysts. For example, when data is extracted to an Oracle data warehouse from a non-Oracle application with 5,000 users, Oracle sales reps are now saying customers must pay Oracle for all 5,000 users.

"This bizarre interpretation of multiplexing and subsequent attempts to gain revenue from Oracle's existing client base add momentum to users' displeasure with Oracle pricing," Meta Group analyst Charlie Garry said in a statement.

According to Meta Group, several of its clients are considering moving large data warehouses off Oracle databases after being confronted with the licensing clarification.

In a paper of its own on the topic, Gartner suggests that Oracle's declining year-over-year database revenues in each of the past four quarters is motivating the "highly inappropriate" sales calls.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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