Conor O'Mahony's Database Diary

Your source of IBM database software news (DB2, Informix, Hadoop, & more)

A Closer Look at Exadata v2 Costs

with 9 comments

Oracle list the following costs for a full-rack Exadata system:

  • $1,150,000 for the hardware
  • $1,680,000 for the storage server software

However, there was an asterisk next to the storage server software price. In small print, it says that you must “Use your existing database licenses“. That of course assumes that you have available licenses of Oracle Database and all required add-on features. Of course, I probably don’t need to mention Oracle’s reputation for auditing customer environments and later discovering very large compliance issues. Business Week covered this very topic last week in a very interesting article titled Oracle Has Customers Over a Barrel. Here is a short excerpt from that article:

One sore point with customers is the company’s audits. Most software companies audit their customers occasionally, checking through their offices and tech systems to make sure they’re paying for all the software they use. But Oracle has a reputation for being unusually aggressive, says Jane Disbrow, an analyst at Gartner Research (IT). She says Oracle’s policies can be confusing, and contracts with customers often don’t clearly spell out their rights. As a result, some get presented with bills ranging from $200,000 to $4 million after they get audited. “It’s easy to be out of compliance with Oracle licensing. They do nothing to help people stay in compliance,” says Disbrow. “Then they audit you and hand you a big bill.”

I thought it would be interesting to to to figure out what a full-rack Exadata system would cost when you include all the required and recommended software. And, of course, when you include the first year of maintenance. Note that I am making some educated guesses here. For instance, it appears that Oracle require you to buy Advanced Compression because the compression now occurs in the storage. In time, I’m sure that details like this will be flushed out. In the mean time, here’s my current best guess at the math:

$1,150,000 for the hardware
+ $1,680,000 for the software on the storage servers
+ $369,600 for Support & Maintenance on the Exadata storage software (calculated at 22%)
+ $1,520,000 for Oracle Enterprise Edition ($47.5k * 8 servers * 8 cores * 0.5 Intel core factor)
+ $736,000 for Oracle RAC ($23k * 8 servers * 8 cores * 0.5 Intel core factor)
+ $368,000 for Oracle Partitioning Option ($11.5k * 8 servers * 8 cores * 0.5 Intel core factor)
+ $368,000 for Oracle Advanced Compression ($11.5k * 8 servers * 8 cores * 0.5 Intel core factor)
+ $160,000 Enterprise Manager Diagnostic Pack (recommended)
+ $160,000 Enterprise Manager Tuning Pack (recommended)
+ $728,640 for Support & Maintenance on the above non-storage database software (calculated at 22%)

That all comes out to a whopping $7,240,240 for license and first year support/maintenance, which is a little more startling that the $2.7M indicated in the Oracle materials. Of course, this is the list price, and does not reflect any discounts you may be able to negotiate. A couple of additional things to consider:

  • The list price for the annual support costs of the above software components is $1,098,240.
  • Don’t forget that these costs do not include installation, which is a custom quote.

Written by Conor O'Mahony

September 17, 2009 at 10:59 am

Posted in Cost, Oracle Exadata

9 Responses

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  1. + $1,680,000 for the software on the storage servers.hımmm…
    very high a score

    ehhu

    January 3, 2010 at 11:31 am

  2. Oracle recently made some price cuts… further details at A Closer Examination of Oracle Exadata Price Cuts.

    Conor O'Mahony

    May 28, 2010 at 8:43 pm

  3. Yes, you are ~ right. But as IBM employee you know very well, that IBM is far more agressive than Oracle in the area of license auditing. I am the customer of both of you, guys, btw… So this fact downgrades your article to cheap advertisment, sorry.

    Martin

    May 29, 2010 at 1:37 am

    • Hi Martin,

      There is no question that both IBM and Oracle perform software compliance audits. Comparing the two in this regard is a bit of a tangent from the main topic here, but I do appreciate you helping this blog present a more complete picture for its readers.

      You claim that IBM is far more aggressive than Oracle in the area of license auditing. Quite frankly, I have heard the opposite. But, given the fact that—simply by virtue of the people I am talking to—I am exposed to more disgruntled Oracle customers who are looking for an alternative, than the other way around. If you talked to my counterpart at Oracle, they may have the opposite viewpoint to me. The bottom line is that I don’t think I’m in a position to make an independent judgement. So I thought I would do some research and seek some independent viewpoints…

      Gartner does have a report titled “Gartner Polls and Surveys Show an Increase in Software License Audits” (Gartner ID Number: G00169933). As this is licensed content, I cannot present the contents. However, I can say that they cite both IBM and Oracle for increased auditing activity and they do not claim one is more or less aggressive than the other. The report is available from http://www.gartner.com.

      Gartner has another report titled “How Flexible IBM, Microsoft, Oracle and SAP Have Been With Software Customers During the Economic Downturn” (Gartner ID Number: G00170207). Again, I can’t reproduce the cxontents. However, I can say that Gartner report that Microsoft and IBM have shown more commercial flexibility to their customers in the downturn than Oracle and SAP. So, again there is no determination as to who is more aggressive, but there is a nod towards IBM for being more flexible when working with its clients. This report is also available from http://www.gartner.com.

      I don’t see recent research from other major firms on this topic.

      Perhaps your experience is that IBM has performed numerous and detailed compliance audits in your environment. But, as far as I am aware, there is no independent verification that in general IBM is more aggressive. If anyone knows of some, please share.

      Conor O'Mahony

      May 31, 2010 at 8:45 am

      • As an IBM/Oracle customer I can vouch that after a recent IBM audit our company feels like we’ve just had an unwanted colon cleansing. I’ve worked on a couple of Oracle and AIX environments over the last 10 years and “IBM Auditing” rates a big fat zero when it comes to custom service and common sense. ALthough I guess thats not in their job description. The worse thing about them is that no one in IBM seems to be able to talk to them about sorting out what would appear to be simple issues.

        Thanks

        Val

        September 20, 2010 at 4:08 am

  4. Admittedly, my specialty is Oracle’s software practices and policies, including compliance issues. I have written extensively about it here: http://oracleoptimization.com/

    Oracle seems unique in its reliance upon fields sales reps for everything from monitoring software usage to advising on contractual issues. This dynamic often results in mistrust, so it is the threat of being audited, rather than the actuality, that drives behavior. I could could go on about this topic, but I’ll stick to Conor’s assertions about Exadata pricing ;-D

    Exadata is at least a strategy by Oracle to secure high-margin, perpetual, nearly-impossible-to-terminate software maintenance contracts. Oracle typically extends ultra-deep discounts against sky-high list prices. This practice, combined with its infamous re-pricing policy, is what secures Oracle’s place within the operational budgets of its customers. Consequently, it also drives record-breaking cash creation.

    Software maintenance is not tied to the hardware contract, so those payments will live on forever regardless of the success, failure or eventual retirement of the Exadata hardware.

    oracleoptimizer

    June 11, 2010 at 11:11 am

  5. See the list price for Oracle Exadata compared with corresponding IBM Smart Analytics System configurations at Comparing Price for Oracle Exadata and IBM Smart Analytics System

    Conor O'Mahony

    October 19, 2010 at 12:07 am

  6. Great to see people like you spare time to share with public, really appreciate!!

    Varun

    March 21, 2011 at 8:51 am

  7. FYI, it looks like the Exadata hardware price increased as of 01 Sep 2011. These price increases are for the newer Exadata models (and not the older model featured in this post). Again, these are hardware-only prices. They do not include the database software, storage software, etc.

    Model    Old price    New Price
    X2-2, 1/4 rack $300,000 $330,000
    X2-2, 1/2 rack $550,000 $625,000
    X2-2, Full rack $1,000,000 $1,100,000
    X2-8, Full rack $1,500,000 $1,650,000

    Conor O'Mahony

    September 7, 2011 at 9:10 am


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