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Defining The Business Value Of Technology
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December 4, 2000 |
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Database Grudge Match
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Oracle, on the other hand, rated low in the price and value category. Company officials generally dispute any suggestion that Oracle's databases cost more than others, but the perception continues to exist among IT managers. Survey respondents gave the vendor a low 5.5 for pricing and value--the lowest score Oracle received in any of the categories, and dead last in that particular category. "I think Oracle's power unit [capacity-based] pricing is causing many users to consider another database," Gartner analyst Burton says.
Oracle has long been known as a vendor with complex licensing and pricing policies, and it's trying to do something about that. During the last two years, the company has established standard prices for its software, eliminated many discounts, and introduced a pricing structure that's based on the number of processors used in database servers. In an interview in September, CEO Ellison acknowledged that some customers might have seen prices actually rise with the elimination of discounts.
"Sometimes the price goes up for a customer; sometimes the price goes down," Ellison said at the time. "Maybe the better negotiators [of the past] are paying a little more and the poor negotiators are paying a little less. At least everyone is paying the same." In general, Oracle executives say, the company's moves have resulted in lower prices overall.
Green Mountain Coffee Roasters is one company that experienced sticker shock earlier this year when it licensed Oracle8i using the new capacity-based pricing scheme. Because the company's IT system is linked to the Internet, CIO Prevo was told the fee would have to be based on capacity pricing rather than on concurrent users, even though Green Mountain derives less than 1% of its revenue from Internet sales. Oracle's quoted price: $560,000.
"That's pretty steep just for a PC server to talk to the Internet," Prevo says. "It's very unreasonable pricing. Microsoft SQL Server for our entire enterprise, including the Internet connection, would be $70,000. When you start talking about magnitudes of greater cost like that, it's going to compel more CIOs to invest time and energy in evaluating SQL Server as an alternative."
Prevo was able to negotiate a lower price with Oracle and went ahead with Oracle8i. But he makes it clear that he'll take another look at SQL Server when it's time to upgrade.
IT managers judged IBM to be No. 1 and Oracle to be No. 2 in some of the other categories covered in the survey, including industry expertise, strategic business advice, vendor reputation, and customer referrals. "We have found in our market research that one of the key decision-making items is customer references," IBM's Perna says.
Sybase CEO and president John Chen expressed surprise at his company's low ranking in the survey, including sub-par scores in technical areas such as scalability and availability and in customer service.
Sybase executives maintain that product reliability, availability, and scalability have always been high on the company's priority list, as has customer service. Chen notes that Sybase is focused on a limited number of vertical markets--financial services in particular--and IT managers in markets where Sybase doesn't have a strong presence may have "biased or uninformed" opinions. "Or maybe we don't do as well in marketing our advantages," he says.
But it's safe to say that there's room for improvement in the quality and features of Sybase's database-management system, and in the way it supports its customers and adds value to the deal. Indeed, the same could be said for all the companies evaluated.
Ease of administration and finding qualified administrators are the biggest problems IT executives face with databases, according to our survey. Other top challenges include compatibility with other enterprise software and hiring qualified programmers.
"The primary things we look for are cost and ease of use," says Tri-Cor Industries' Clark. In particular, easy installation and maintenance are attractive qualities in a database, he says.
Some of Tri-Cor's clients are military agencies that are migrating from Sybase to Oracle databases, so the company is rewriting many of its applications to accommodate that migration. But that can be a difficult undertaking, "especially if you use the special features in each database," Clark says. "Then you're really left out to dry."
Tri-Cor isn't alone in hoping for improvements. GE Capital's Vossbrinck has gripes about each of the different database systems in use at that company. One recent project ran into problems transferring data from Oracle7 to Oracle8, and Oracle itself wasn't as helpful as Vossbrinck would have liked. Says Vossbrinck, "I'm sorry we don't use DB2."
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