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Seems quite reasonable.

I sell a white label version of one of my products (Twiddla), with an API for integrating it into your site. From time to time I field requests from people who want to build their thing on top of our platform, asking if we do consulting.

I tell them yes, then quote what it would take to build what they want and 90% of them have a heart attack on the spot.

"But we have this quote from another developer saying he can do the whole thing for $1,500!"

I don't doubt it. But then I suspect his dev didn't build Twiddla. I did, so I charge accordingly. I recommend having your own team do your integration since really it's quite straightforward, but if you really need it to work right and you need it fast, you can go straight to the source (but it'll cost you.)

It's the same thing with Oracle. Sure you can find a guy to build your thing for $25/hr, and chances are he'll probably even do a good job. But if you want to remove all the "probably's" from that sentence you can pay 10x as much and have Oracle do it for you.

> But if you want to remove all the "probably's" from that sentence you can pay 10x as much and have Oracle do it for you.

It looks like you're assuming that the guys Oracle sends out to do the job are true domain experts, and that's a giant leap of faith.

You are also paying insurance. When the project fails and blame gets assigned, you did the "right" thing.

If you hire an incompetent, it's your fault. If you hire Oracle and they send you an incompetent, it's theirs. Good luck with getting the money back though.

You're not just getting insurance... if the project is delayed or just needs a hand or two, Oracle will throw more people in to meet deadlines. If a consultant leaves the project, they will be replaced to keep continuity. But it all depends on how strategic an account you are to Oracle.

But yeah, nobody gets fired for hiring Oracle consultants.

I've had some bad experience with consultants. So much so that I'm hesitant to use them now. They'll have a plane to catch to fly to the next client's site. And they'll rush to catch that plane and make mistakes on your project, etc. They have the mentality that this is "not their baby".

If you do hire one, make sure you have a maintenance agreement with them so they can't just set it and forget it leaving you with a big bill and problems.

Just my experience.

Edit: I've never used an Oracle consultant. My comment is meant at technical consultants in general.

And I've had bad experiences with clients who want to treat an external consultant as just another body they don't have to treat any differently with respect to communication.

There's pitfalls on both sides, but I've had people not give me information for 3 weeks, fiddling with other projects, then get upset, after our initial agreed on engagement timeframe is done, when they can't just have me stay involved for another month.

I've said before, and I'll say it again - almost all projects I've been involved with that failed or were extremely bad projects (consultant or employee or whatever) failed because of communication issues, not technical issues. Even when tech issues arise, there needs to be competent communication about the impact. Good communication - from all parties - is key. It's just that with full time employees I think many managers prefer to let things slide around longer.

There's a second advantage to vendors setting their consulting fees quite high, and that is not to undercut their professional services partners. It also leaves room for others to compete in that space.
The problem with not using the OEM is finger-pointing between the OEM and your non-OEM consultant. Also, I've negotiated with Oracle many times on behalf of customers, and it's safe to say that they are in the business of shifting risk back onto their customer while charging them a lot of money.
Also note the Oracle supplied GSA (Federal) price list: (see page 21)

http://www.oracle.com/us/corporate/pricing/gsa-pricelist-070...

Which means that's the cheapest rate Oracle is allowed to give. By law.

Those rates are about half of what I'd expect.
you don't know how long it takes them to do anything though.

hourly rates are one thing, but unless they've got reasonable time frames for building stuff, it doesn't really matter.

I typically charge 3-5x what 'regular' web developers do, and I catch flak for that from some potential clients. I also tend to get stuff done 5-10x faster than many other 'regular' web developers too, so I don't have any issues justifying myself. The people that care about hourly rates move on, the people that care about getting their problem solved quickly stay.

I imagine Oracle's got 'standard' implementation timelines for common scenarios.

I don't see any date anywhere, though. Those rates could be from ten years ago.
Comparing to current Euro rates (which I know), they look about right at today prices.
Yep, I'd like to see the rate card for SAP AG and compare hehe.
for the multiple comments like "omg that's outrageous!", this blog post will help understand the economics of consulting[1].

  [1] http://blog.asmartbear.com/consulting-company-accounting.html
I'd like to see the average salaries of the people providing this work. I expect most of them are in the range of $40-80 per hour (annualized), or about 20% of the total.

If that number is right, the customer is paying 25% for the work, 25% for the overhead of the consulting company, and 50% for the Oracle brand.

no that sounds about right. When you start consulting the recommended advice is triple your hourly rate. 1x to pay you, 2x to cover your benefits, and 3x to cover downtime between projects and when projects overrun. Consulting companies usually charge their customers 2.5-3x their consultants hourly fees.
It seems I'm the only one shocked at how much this is.

Going up to $484/hr as I read it, seems out of the ballpark to me reasonability-wise. I'm sure they do a good job, but just like a lawyer that might charge that rate, high rates don't mean mistakes are never made.

I'm pretty sure if I wanted to get a primary contributor to any open source database software to consult on a project, it would be far far less, and they'd know it just as well (if not better) than an Oracle consultant knows Oracle. I'm guessing the majority of these consultants don't touch the core code of the product that often.

I guess I still haven't been properly explained the real value of Oracle yet. We use it at my dayjob, and every time I have to deal with it I am frustrated. Its so expensive, but why again is this significantly better than PostgreSQL?

I'm pretty sure if I wanted to get a primary contributor to any open source database software to consult on a project, it would be far far less,

Of course you could. But there's a bit of a fallacy w/r/t hiring consultants, if you hire someone directly (ie not through a company or agency) you can expect to pay about half of what you'd pay for the same person through an agency . The benefits of going through Oracle (as stated above) is if your consultant disappears you have another a phone call away, and because "no one ever got fired for buying IBM". However you pay for this privilege.

Your boss has heard of Larry Ellison and figures if he's so rich he must be doing something right. (Or your boss's boss, or whatever, depending on the size of your company.)
That's about what it seems to come down to. I have yet to hear a compelling technical argument for Oracle aside from vague mentions like, "It's what an enterprise uses" or "It's so strong it could run X"

But then I find that companies with huge datasets like Amazon, Facebook, Twitter, etc... don't use it. And I go back to scratching my head.

Some of those companies are using Oracle for certain apps:

Oracle at Facebook: http://venturebeat.com/2010/12/08/tim-campos-dreamforce-comm...

Correct me if I'm wrong, Amazon (the retail online store) was using Oracle in the past. I don't know what DB they're using now.

Ditto with eBay.

There are two reasons most people use Oracle. In some cases, they have a product that requires it, and doesn't support anything else. If this product happens to be unique in the industry or core to their business, they will generally happily pay the Oracle tax and be done with it.

The other good reason is that Oracle hires some of the very best sales people in the world, and nobody is selling postgres, mySQL, etc to the same extent. There's a huge difference between being a 'technically better' product and being able to convince a PHB of that. Also, Oracle tends to support damn near everything, and damn near everything (Enterprisey) supports Oracle.

It's the 'safe' choice if you can afford it.

What does Oracle do that a programmer wouldn't write as compatible with other databases? Just trying to figure out why a product wouldn't be written to work with more things.
Lots of things, really. They don't have a real 'limit' capability that I've found that works in any way like mySQL's.

To mimic MySQL's "SELECT last_name FROM employees LIMIT 50,50" you have to do something like this:

SELECT last_name FROM (SELECT last_name, ROW_NUMBER() OVER (ORDER BY last_name) R FROM employees) WHERE R BETWEEN 51 and 100;

Aside from that, it's general operational differences and variations from the SQL spec on a pretty grand scale. The flip side to that though is that most serious Enterprise companies are generally using Oracle already anyway, so it's safe to target Oracle or MS-SQL and know that almost all of your customers will have one or both.

I need to charge people more for customisation and integration work.

I suck at charging people money for hourly work.

How did you get two urls in the title for this one?
HN automatically adds a [scribd] link when a PDF is posted.
Recently there were few (one for sure) postings with scribd.com listed in parenthesis and they had nothing to do with scribd (they were all pdf's if i remember correctly). This case sure is different - even stranger. Looks like HN script is behaving.

edit: Fresh example from /newest list: http://news.ycombinator.com/item?id=3190866

HN has been adding [scribd] links to pdfs for a very long time. Scribd is a YC startup.
Roger that. (Am kinda new here.)

Then, it looks like its uploading pdf to Scribd or looking for Scribd copy of a posted pdf ...or does something completely different.

http://www.scribd.com/vacuum? sure sounds mystic.

Anyway, not much to discuss.

I assume the script is called "vacuum" because it sucks in a url (and then displays it.)
I was expecting that to be a list of really, really expensive rates.

That's actually pretty cheap.

Yeah these are either old, or special rates for US Federal Whatevers.

I know quite a few senior (ish) consultants in Oracle who were billed at 3x this.

It makes sense that they give the feds a different rate though - I would assume federal contracts last much longer than a lay customer (3x longer?).

It may just depend on how the contracts were structured. For example, in the OP, travel, room and board were billed separately.

As you pointed out too, this contract was for 10 years, so there was probably a discount built in as part of a competitive bid.

I might be missing something, but the NY CIO is state, not federal. That said, while they likely have their products sold on some sort of GSA schedule, they're allowed relative carte blanche for their rates.

That said, I doubt that this is far out of date, or far off the mark for what they charge as standard consulting fees based on recent work with both parties.

I think these rates are low (and probably old). I worked for a systems integrator over 10 years ago and our bill rates for similar levels were higher.
Staff Consultant - 1-3 yrs of experience and the rate is $220/hr in NY. Wow, I wish I had that job!
I was expecting it to be more
What actually is "outrageous" about those rates is what will ends up in the pocket of the poor sob who will be doing all the work... because it won't be an actual Oracle employee but very likely just some small contractor.

I used to be a consultant working for a contractor for Sun (all big names in consulting do this, however. saves their hr costs) and Sun charged the customer about what you see on that card; the company I was working for, however, would end up getting about or less than half of that.

All Sun was actually doing was providing a "project manager" I never saw and I didn't get remotely the kind of information and access to information that actual Sun techs would get and have. So ultimately they just sold their "good name" and passed on the work and kept the lion's share and when one of the projects went south (nobody effectively got the customer under control), they made sure all their contracts were water-tight and passed all the blame right down to us and we had to pay them back.

Consulting is dirty, dirty business and you'll be swimming with sharks much, much bigger than you when working for the average small, highly effective and flexible IT company. And yes, you will sell your soul more often than you shall like.

wow, that's a lot more than an EE consultant can ever make.