Oracle has come under fire after it emerged this week that companies running its databases on Sun servers can pay over $1m more than those using equivalent IBM systems.

Some companies are even considering new Oracle installations on IBM's hardware instead of Sun's because of the difference, said Mark Shainman, a senior research analyst at Meta Group.

"It's the nature of capacity-based pricing. Doubling processor speed means doubling the price of Oracle licences, but doesn't mean twice the performance," he explained.

Oracle confirmed that its software pricing is based on hardware performance using a model called universal power units (UPUs), which are determined by the speed and number of processors.

IBM's top-of-the-range Unix server, the eServer p680, has up to 24 600Mhz Risc processors, giving it a UPU rating of 21,600. According to Oracle's website, the Oracle database enterprise edition costs $1.5m for this IBM system.

Sun's equivalent server, the E10000, has up to 64 400Mhz Risc processors with a UPU of 38,400. Oracle prices the Sun enterprise edition licence at $2.6m.

Tests performed on equivalent Oracle database systems by independent benchmarking firm TPC show that IBM's p680 rates 220,807 transactions per minute while Sun's E10000 only produces 115,395 tpm. Oracle's licensing model means that the more powerful IBM system costs over $1m less than the Sun offering.

Sun acknowledged the price difference, but pointed out that the E10000 can be partitioned into multiple domains, saying that Oracle will sell licences based on the number of processors in just one domain to reduce the cost.

First published in Computing