Oracle charged with overcharging

Oracle is under fire from analyst houses over inappropriate sales and licensing pitches. Both Gartner Group and Meta Group have recently issued warnings to clients that Oracle’s salesmen may be pressing unnecessary licences on to their customers.

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By  Neil Denslow Published  March 31, 2002

Oracle is under fire from analyst houses over inappropriate sales and licensing pitches. Both Gartner Group and Meta Group have recently issued warnings to clients that Oracle’s salesmen may be pressing unnecessary licences on to their customers.

The two analyst houses have both reported clients approaching them to complain about Oracle’s sales tactics. Examples include salesmen limiting customers’ choices by forcing them to pick the most expensive licensing option —whether it be processor-based or named-user pricing— and pre-selling more licences than a company will ever need through five to seven-year enterprise license agreements.

The company’s sales team has also been accused of trying to get businesses to buy extra named user licenses for data sourced from an Oracle application database into a data warehouse. Some Oracle salesmen are reportedly claiming that the data warehouse has to be licensed even if it is not Oracle-based.

Patrick Wheeler, an IS manager for a US-based interactive TV company, told theregister.co.uk about an example of this kind of problem. His company aggregates data from millions of clients into several middle tier servers that feed an Oracle database, but only after at least three different massaging and aggregation processes.

“They (Oracle) consider it to be a multiplexer all the way to the client. But each and every one of these set-top boxes we work with is not talking to Oracle directly. It’s one-way traffic. This is not a two-way communication, like, for example a web user hitting a database, by any stretch of the imagination.”

However, Oracle still demanded a steep multiplexing license fee for the use of the application. Wheeler eventually negotiated a per-processor license that cost considerably less than Oracle’s initial price and a tiny fraction of what a multiplexing license would have cost.

Ayman Abouseif, Oracle’s marketing director for the Middle East & Africa, criticises Meta’s report and says that the company’s multiplexing licensing arrangements have not changed since he started working for the company. “I don’t know why Meta have suddenly started hating something we have done for years,” he says.

He adds that there have been no complaints within the region about over-selling licences and says it is “not acceptable to Oracle management… If there have been any cases, we would like to know about them,” he concludes.

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