Oracle licensing

Oracle Changes its Licensing to Subscription: Speculation

This article is a view into what would the the impact if Oracle changed its licensing from on-premise licensing 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

oracle licensing changes subscription

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 already 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 were to adopt 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. Such a strategy, if implemented, would mark a radical shift in 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.
  • No ability to purchase additional licenses or renew support. Taking a card from Broadcom playbook. Honoring existing agreements, but once they expire customers need to migrate to subscription-based.

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 costs for customers, 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, the path Oracle chooses will be crucial in defining its future and that of software licensing models.

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, enhancing organizational efficiency.