Sunday, July 19, 2009

Oracle raises prices again

Despite the unassailable growth of low-cost and open-source database solutions, Oracle (ORCL: NASDAQ) commands a huge share of the enterprise class database market. It's no surprise to me that they are looking for ways to capitalize on this by raising prices on ancillary products. The basic entry point for their database software hasn't changed much. But add-ons such as Tuning Pack and Diagnostic Pack have seen jumps by as much as 40%.

Will large businesses be willing to pay these prices? I think so. The improvements in performance gained by the effective use of these tools will more than justify the cost. And when making a purchasing decision, companies don't often look at what the price used to be -- that information isn't often available anyway. They look at the current need, the current solution, and the current expectations of benefit. So, Oracle has made a smart play here. By keeping the cost of entry competitive, they have placed a bet on getting more value out of the products that make their core product even better. This will make their core products even harder to displace, and help to fortify their position in the market.

Current Pricing from Oracle
Other insights from the blogosphere

1 comment:

  1. I would really encourage you to thoroughly investigate "The Innovators Dilemma" - particularly the part where the discussion turns to the dominant firm retreating to the high ground in the face of low cost, disruptive competition.