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Are price hikes in store for Sun software support?

Observers predict that Oracle will raise prices for Sun software support over time after the acquisition closes

Oracle’s pending purchase of Sun Microsystems may not have an immediate effect on what customers currently pay to use Sun software, but changes are likely coming, observers said this week.

Sun’s open-source software strategy has included offering applications like the MySQL database at no cost, but customers who want official support must buy a maintenance contract.

That’s a sharp contrast to Oracle, which, in the practice of proprietary vendors, imposes license fees plus an annual support charge, generally 22 percent of total license costs.

But it’s not likely that Oracle will immediately ratchet up Sun support contract-pricing wholesale, said Redmonk analyst Stephen O’Grady.

“I would imagine that the pricing changes, if any, will happen on a product-by-product basis,” he said. “Oracle is very good at understanding when it has the upper hand in terms of a product’s importance.”

Oracle, which declined to comment for this article, imposed license price increases of 15 percent to 20 percent last year, just as the global recession was escalating. “They can get away with that because it’s going to be cheaper for customers to continue running [Oracle] than go through the pain of migration,” O’Grady said.

In contrast, Sun customers may not have the “same level of dependence” on Sun’s products, which also include identity management and the Glassfish application server.

“With the exception of MySQL, none of the products are really popular enough where they can dictate pricing to the market,” he said.

Forrester Research analyst Ray Wang does not expect Oracle to quickly raise prices either, in part because Sun customers have more options.

“If they do make changes, they’re going to have to show more value. Someone else can provide open-source maintenance as well,” he said.