Words one could use to describe Oracle include:
- Expensive
- Litigious
- Audits
- Arrogant
- On-premise
- Enterprise
- Legacy
And now we can add ‘confused‘ to the list. Oracle is now selling an on-prem set-up of its Oracle Dedicated Region Cloud, completely managed by the company itself, using the same architecture, cloud services, APIs, and SLAs as its equivalent regional public and private clouds. Oracle’s new on-prem cloud options are only available under subscription licensing. Any current perpetual licenses for applications or databases must move to the subscription model to take advantage of them, even though they might be running in the same data center.
The catch – money
Prices for the Oracle Dedicated Region Cloud@Customer start at $500,000 per month = or $6M minimum per year.
Craig Guarente, founder of licensing advisory firm Palisade Compliance and former Oracle veep for contracts and business practices, said
“users should understand that Oracle has a $20 billion/year support business on which it makes roughly 95% margins. While customers might be looking to reduce costs in moving to the cloud, Oracle’s margins in the cloud were around 60%.“
“For Oracle to make the same dollar in the cloud as it does on-premises, it might have to double cost.” states Mr Guarente.
Software Audits?: Regis Louis, exec veep of product management for Oracle Cloud Platform in EMEA, when pressed on whether the transition could incur an Oracle audit on existing perpetual licenses, said:
“That’s all based on trust. This is the way we’ve worked: that customers are declaring they have a licence for [the software].“
Gartner’s Raj Bala – Gartner research director – But given the scale of the commercial commitment to Oracle, customers would be wise not to transfer small workloads.
“You cannot start small. With this, you really have to go all-in and make a commitment,” he said, “…demand for on-premises cloud from Oracle had not been strong.”
Options
Oracle Clients have 3
- Maintain Status Quo – keep paying to keep old on.
- Trust Oracle and make this move – and we all know it isn’t that easy starting at $500,000/month.
- Run out the Oracle applications as you migrate the database to something else – taking advantage of cloud and open-source to transform.
- Postgres as a complete binary compatibility option that would save anyone 85%.
The opportunity to take <pause> and consider what makes sense is where Platform 3 Solution focuses for clients. Assessing the current state, formulating options that would include a combination of archiving, migrating and complete decommissioning and give clients a better and more economic option.
FOOTNOTE: This new Oracle option also has a 3 year minimum commitment – so now the number on the table starts at $18,000,000 – and what happens after 3 years?
Bibliography: Excerpts of this blog originated from THIS ARTICLE