Licensing

Oracle Changes its Licensing to Subscription: Speculation

Licensing

Oracle Changes its Licensing to Subscription: Speculation

This article examines the impact of Oracle changing its licensing from on-premise to subscription-based, similar to what other software vendors have done in the past few years.

Oracle Changes its Licensing to Subscription

Understanding the Potential Shift

The software industry is abuzz with the idea that Oracle changes its licensing to subscription. While this remains speculative, such a move would reflect a growing trend among software giants.

Companies like VMWare and Citrix have transitioned from selling perpetual licenses to subscription models, ostensibly simplifying the licensing process.

This shift also hints at a strategic move to increase revenue streams, with VMWare projecting a revenue doubling within three years. If Oracle adopted a similar approach, the implications for the technology sector could be significant.

Oracle’s Current Position: A Foundation for Change

Oracle, known for its robust customer base, especially in database technologies, stands at a pivotal point.

The speculation that Oracle would change its licensing to subscription raises questions about its potential to double revenue by reselling licenses.

If implemented, such a strategy would radically shift Oracle’s approach to software licensing and customer engagement. But we see other software vendors making similar decisions; why wouldn’t Oracle?

Speculating Oracle’s New Subscription Model

  • Employee Metric or vCPU-based Licensing: If Oracle changes its licensing to subscription, it might opt for novel metrics like employee count or vCPU usage in VMware environments. Each method presents its unique advantages and challenges in implementation and customer acceptance.
  • There is no ability to purchase additional licenses or renew support. This is taking a card from Broadcom’s playbook. We are honoring existing agreements, but customers must migrate to subscription-based once they expire.

Evaluating the Hypothetical Impact on Oracle’s Market and Customers

  • Customer Reception: The reaction of Oracle’s extensive customer base to a subscription model is uncertain. Shifting from perpetual to subscription licensing could be met with mixed responses, demanding strategic communication and transition plans.
  • Financial Implications for Users: This speculated shift may lead to increased long-term customer costs, challenging the notion of subscription models being more cost-effective than traditional licenses.
  • Adapting to New Technology Trends: If Oracle changes its licensing to subscription, it could influence the pace and nature of technology adoption among its users, potentially spurring innovation or pushing customers to seek alternatives.
  • Oracle’s Market Position: Such a strategic change could redefine Oracle’s competitive landscape, impacting its rivalry with other technology giants.

Conclusion: Oracle at a Crossroads of Speculation and Strategy

The idea that Oracle changes its licensing to subscription is rife with speculation and potential. While the prospect of increased revenue is tantalizing, Oracle must weigh this against the broader implications for its customers and the technology market.

This strategic decision, if taken, could reshape the landscape of software licensing, underscoring the importance of a balanced approach that considers both financial goals and customer satisfaction.

As the industry watches, Oracle’s path will be crucial in defining its future and that of software licensing models.

Top 3 Reasons Why Oracle Solutions Might Not Be for You

  1. High-Cost Oracle’s software is pricey. Market alternatives often offer similar features at a lower cost. The value Oracle provides doesn’t always match its high price.
  2. Poor Customer Treatment Many users report negative experiences with Oracle’s customer service. Frequent software audits can lead to unexpected costs. Oracle often demands more money through these audits, using technicalities to justify their claims.
  3. Inflexible Agreements Oracle is known for locking customers into rigid contracts. These agreements can force customers to pay for unused software.

Author

  • Fredrik Filipsson

    Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, improving organizational efficiency.

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