Saturday, April 08, 2006

Oracle E-Biz suite

In one of my previous post, I mentioned about eye-opening licencing negotiations with Oracle with regard to their E-Biz suite of applications. My employer recently implemented Oracle Financials (11.5.10) and the project proceeded in two phases with the first phase being an package evaluation and selection followed by implementation. Well, in the first phase, Oracle E-biz was chosen over another product which is Microsoft based and the negotiation for licencing was completed with hardly any input from IT but basically we are licenced for Oracle E-biz (although the licencing details were a killer). Now, we found out much later that there are actually three major components to Oracle E-biz licencing which are the application itself, the middle tier of Oracle Application Server and the database tier. During our implementation done by a big consulting firm, my employer also looked at getting Oracle Supply Chain so an evaluation was done and licencing negotiations commences. During the course of the latest round of negotiations, we (in IT) found out that our Oracle Financials (in the process of being implemented) are only licenced for a single CPU Application Server licence! Yikes!! An emergency sizing exercise was done in conjunction with Oracle and our server vendor and we found that we are about 11 CPU licence short! I can tell you that the licencing for Application Server is not cheap and even though we got a very good discount on our first Application Server licence, this latest round of getting the additional 11 licences did not even come close to the original discount. You would think that we should be getting at the very least the same discount but unfortunately we are not in a position to demand a better deal as we have to buy the licences otherwise our Financials implementation will be in violation of Oracle licencing policy.

So, after spending an additional $300K for the additional Application Server licences, we are now in compliance but Oracle should take note that the refusal to provide a better discount rate (short term gain) than the original licence deal did not endear them to my employer and what goes around comes around. If we are asked to provide a referal for Oracle, it's probably going to be "watch out for the licencing".