Tuesday, January 24, 2012

Oracle Exalytics Pricing explained - a wonderful product at a wonderful price

Warren Buffet famously said and I quote (with some edits) “It's far better to buy a wonderful company (product) at a fair price than a fair company (product) at a wonderful price”. Conventional wisdom has it – quality doesn’t come cheap. Well in this day and age where conventions are broken every day - time to think differently. What-if the best analytics solution in the world was available at the bargain basement price.

Oracle recently announced the pricing for Exalytics, the industry’s first in-memory analytics machine and as conventional wisdom would have it a number of articles were published with Exalytics pricing in millions of dollars of range. But once again continuing with the glowing tradition of “WHY NOT “, Oracle is out to prove the conventional wisdom wrong. Drum rolls please….NOW YOU CAN GET EXALYTICS FOR MUCH LOWER THAN THE MILLION DOLLAR MARK. No gimmicks, no discounts, all based on the list price.
Exalytics includes 3 components – hardware, software and support.
Hardware Cost:
1)      The List price for Exalytics hardware is : $135,000
Software Cost:
Exalytics includes two software components:
2)      TimesTen In-Memory Database for Exalytics: Priced at $300 per named user/ 100 user minimum OR $34,500 per processor
3)      Oracle BI Foundation Suite: Priced at $3,675 per named user/100 user minimum OR $ 450,000 per processor       
Support Cost:
4)      Annual support cost includes support for Exalytics hardware ($ 29,700), TimesTen In-Memory Database for Exalytics ($66 per user OR $7,590 per processor), Oracle BI Foundation Suite ($808.50 per user OR $99,000 per processor).

So, what’s the total cost of deploying a analytic system with 100 users?
Exalytics Cost for a 100 user system = 1 + 100*2 + 100*3 + 4 = $135,000 + 100*$300 + 100* $3,675 + ($29,700 + 100*$66 + 100*808.50) = $135,000 + $30,000 + $367,500 + $117,150 = $649,650

Now, discounts of up to 50% are quite common in the software world. I don’t know how much Oracle discounts but assuming a conservative 50% discount rate we are looking at a 100 user system powered by 1 TB of RAM and 40 CPU cores and market leading BI and In-Memory database technology for under $300 K. That’s $3K per user. Compare this to reoccurring $3K per user per year Salesforce charges for their Sales Cloud and the $5K per month pricing offered by a cloud based BI provider.

In this day and age where we are moving away from “Whys” to “Why Nots”, I think Oracle Exalytics definitely proved the conventional wisdom wrong by delivering best value for best price. Well this would even make Warren Buffet revise his quote – “a wonderful company (product) at a wonderful price”.

1 comment:

  1. But what are the support costs and the cost to upgrade and implement the thing? staff costs etc?