Oracle Fusion Applications pricing revealed

Oracle has posted an initial price list for its long-awaited Fusion Applications, and the news is mixed

Oracle has quietly revealed pricing information for its long-awaited Fusion Applications, suggesting the software may now be generally available or will be soon following a six-year development process.

No formal announcement of Fusion Applications' release has been made. An Oracle spokeswoman did not immediately respond to a request for comment Monday on the price list, which has been posted to the company's website.

Fusion Applications are supposed to combine the best attributes from Oracle's various ERP (enterprise resource planning) and CRM (customer relationship management) product lines into a next-generation suite that will be available in on-premises and cloud-based form.

The list gives pricing information on Fusion Applications modules for financials, procurement, PPM (project portfolio management), HCM (human capital management), SCM (supply chain management), CRM, PRM (partner relationship management) and GRC (governance, risk and compliance).

In many cases, it appears that Fusion Applications are priced the same as corresponding modules in Oracle's other ERP suites. For example, Fusion Financials and E-Business Suite Financials are priced the same, at US$4,595 per application user license.

But a Fusion CRM Base license is priced at $4,910 per user, compared to $3,750 for a Siebel CRM Base license.

Meanwhile, Oracle has heavily emphasized the fact that Fusion Applications will feature pervasive BI (business intelligence) throughout the user experience, but that feature may have to be purchased separately. A number of Fusion Application categories on the price list include an entry for a "transactional business intelligence" license, priced at $2,000 per user.

Overall, an extensive pricing comparison is difficult to make, given the different names used for some of the Fusion Applications modules, as well as what appears to be a number of entirely new capabilities.

Then there's the question of how meaningful price lists really are, given the heavy discounting that typically takes place during contract negotiations.

Customers shouldn't bank on bargains with Fusion Applications, however, according to analyst Ray Wang , CEO of Constellation Research. "Prices are going up right now, unless the deals are competitive," he said. "Oracle's achieving pricing power in the market."

Oracle has said existing applications customers will be credited for "like-to-like" functionality when upgrading to Fusion Applications, a number of users previously told IDG News Service.

"I think the real question is what migration rights customers will get," Wang said.

"There are a few scenarios," he added. "Net-new customers will negotiate as with any other new Oracle deal. Customers with some components will want to see how much credit they get for upgrade rights and what functionality is included. Full-suite Oracle customers will need to identify which like-like functionality is migrated forward."

It's unclear how strongly Oracle's sales force will push Fusion Applications to existing customers.

Oracle CEO Larry Ellison has said E-Business Suite, PeopleSoft and J.D. Edwards users can move to Fusion at a time of their choosing. This stance must be placed in context, however, since Oracle would continue to collect lucrative annual maintenance fees from customers who decide to stay put.

But more recently, Ellison indicated Oracle expects big sales from Fusion Applications, and soon.

"We think this is going to be a huge contributor this year and the following year and the year after that, and it's going to allow us to take a significant amount of share from SAP and some share from our friends at Salesforce.com," he said during Oracle's fourth-quarter earnings conference call last week.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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Tags IT managementOraclebusiness issuessoftwareapplicationsSAPit strategy

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Chris Kanaracus

IDG News Service
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