Oracle Getting ‘Serious’ About SMBs

In a bid to show it’s serious about getting its database software into small- and medium-sized businesses (SMBs), Oracle has announced price reductions and giveaways along with the general availability of its Database 10g for Linux and Unix servers.

A Windows version will be available in a few weeks, Oracle officials said.

Officials at the Redwood Shores, Calif.-based software company cut license pricing on the Database 10g Standard Edition One from $5,995 to $4,995. The entry-level database, first
announced in October
, is designed to compete with Microsoft’s SQL Server, which is popular among SMBs because of its price tag targeted at the mid-market, and IBM’s DB2 Express, a scaled down version of its enterprise offering at a similar price.

Jacqueline Woods, an Oracle vice president, said making the company’s entry-level pricing the same as Microsoft’s shows that “we’re serious about competing head on with SQL Server.”

Under development since mid-2003, Database 10g was designed with the
mid-market customer in mind, said Robert Shimp, Oracle’s vice president of technology marketing. Improvements to the application include ease of management, increased automation and an install
process that boils down to one CD and 10 minutes to get Database 10g up and running.

“(The mid-market) is an area we have done traditionally well but continues
to be a significant growth opportunity,” he said during a conference call Tuesday. “We can compete with any database product out there in the mid-market.”

Officials also made changes to Standard Edition One’s features, now allowing companies to run two processors on the database as opposed to its previous limitation of one processor. The company’s also knocked the pricing for end users from $195 to $149 per user, with a minimum of five users.

For medium-sized businesses, Oracle is offering its Real Application Cluster for Database 10g Standard Edition purchases, at a maximum of four processors
per cluster. To date, the clustering technology was only available to enterprise edition customers and costs $20,000 per processor and $400 per user.

Enterprise database companies like Oracle and IBM have been expanding their product base to meet the reduced demands of smaller businesses, a market that’s expected to grow enormously in the next couple years.

Kathy Quirk, a technology analyst with Nucleus Research, said the price cut is a great idea in order to build the Oracle brand with the SMB market.

“Certainly it makes it more attractive to evaluate Oracle, whereas
previously it could have been something (SMBs) thought was out of their
price range or had more horsepower than they needed,” she told “But it certainly makes the evaluation process more interesting for them.”

Oracle’s betting low prices and its reputation as a big-name database
company will fare well against Microsoft’s entrenched presence in the
mid-market and IBM’s $500 million
partner program
with independent software vendors (ISVs) aimed at SMBs.
IBM released a database product geared for SMBs, DB2
, last June.

Outside its price reductions, Oracle is doing little to increase its
presence in the SMB arena. Shimp said the company was “ratcheting” up its deals with ISVs in the mid-market to get 10g out in the marketplace, while Woods pointed to the company’s Embedded License Option for Database 10g, also announced in October.

“We feel very strongly that we’ve got the relationships with system
integrators, ISVs and partners to bring some very exciting solutions into the marketplace,” he said. “We can do a lot of different things and we can bring that down to the mid-market.”

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