#OOW16 News: Oracle selling on-prem software licenses on-line. Is cloud really cheaper?
Oracle selling on-prem software on-line.
In a surprise announcement this week at OOW, Oracle announces that it has developed a new on-line shopping experience for easily purchasing software…. Not only cloud solutions but a marketplace for on-premise licenses as well.
On Premise Software includes:
- Database Server
- Database enterprise products (RAC, Partitioning, Dataguard)
- Database Security
- Database Management: Tuning pack, Diagnostic Pack, Lifecycle Management Pack)
- Berkeley DB
FUSION MIDDLEWARE SOFTWARE
- Application Server (Weblogic, Coherence, Glassfish)
- Data Integration (Data Integrator, GoldenGate)
- Business Intelligence (OBI standard, OBIEE, Publisher)
- Development tools (Forms and Reports, Internet Developer Suite)
- Enterprise portal
- Hyperion BI (Financial Reporting, Interactive Reporting, SQR, Essbase Plus)
- Identity Management
- Middleware management
- Real-Time Decisions (Crystal Ball)
- Service Oriented Architecture (SOA Server, Oracle Service Bus)
- Transactions Processing (Tuxedo, MessageQ, SALT)
- Applications Management packs for BI, EBS, PSFT)
- Application Quality Management (Load and Functional testing)
- Oracle VM
- Sparc Servers
- Storage devices
- Engineered systems including Exadata, Exalytics, Exalogic
- Spare parts (can search by SKU)
They even are selling components for the MICROS point of sale system and some consulting services.
Of course you can also purchase a lot of their cloud offerings as well like the database, middleware, java, GoldenGate, and BI Cloud Services.
So lets look at the Hyperion Software:
The ONLY Hyperion products that are currently offered is Oracle Essbase Plus, Financial Reporting, Interactive Reporting, and SQR. Not sure where the other products are or if they intend to add them or not – I’ll try to find out.
You might ask if this going to upset the Hyperion Sales Reps or take away from their commission/structure. Nope. Why? In a recent change within Oracle, many Oracle sales reps are now only getting compensated for CLOUD purchases and receiving nothing for on-premise.
Lets take a look at the pricing model. I’ll use Essbase plus as an example
You have the ability to purchase an on-prem license by processor or Named user. You can also purchase the license for a term limit or perpetual.
Checking out is really simple. You simply add what you want to your cart and checkout with a similar and easy interface. When it comes to payment, you can upload a Purchase Order.
So let’s compare a full use Essbase license vs what it would cost for the SaaS Essbase Cloud Service when it comes available. We will a full use on-premise Essbase license would be $580/year per user – which is about half the cost of the rumored $100/month for the Essbase cloud service, however, there is the licenses and support fee of $638. So for one year, 20 licenses – the total would be about $24,000.
Unfortunately we do not have pricing information on Essbase cloud service for comparison. The rumor is that it will be a tired system depending on the configuration,size, environments, etc. But for the purpose of the exercise, lets assume the average would be $200/user. So for the year the total would be $48,000, twice the amount of the on-prem license.
Of course, the Oracle’s Cloud Services, you get the Hardware infrastructure as well, and that certainly needs to be taken into consideration.
At MTG, we could host a small 20 user system for roughly $3,000/month, or $36,000.
Updating the comparison:
Owned Licenses (20, 1 year) : $24k license + 36,000 hardware: 60,000
Rented SaaS (estimated): $48,000
So the difference from renting to owning is $12,000/year, or $1,000/month, or roughly 20% higher.
So it’s possible that you could outsource the Infrastructure to a third party as a managed cloud, AND have a full use, unlimited transferable software asset all for relatively small incremental cost increase. Would it be worth it? Some would say absolutely! There are significant advantages to owning a licenses rather than simply renting the use of web site.
Advantages of owning the software
- Completely transferable to any hosting vendor or on-prem, or combo.
- Full access to servers, logs, utilities
- Hosting providers create a dedicated highly secured VPN tunnels to your corporate network that gives seamless integration, drill-back, and ETL to source systems without the need to upload flat files.
- You can schedule patches/upgrades when you want and are not forced to suffer downtime. (MTG does all patching complimentary for all our customers, on-demand and scheduled)
- Can easily add resources and scale at will. Tweak and tune performance as needed.
- Get full transparent insight and visibility into server, network performance and utilization
- Can use any hardware, software, operating system, or database you choose
- Can install additional products or components that are not available as a SaaS cloud.
- You get access to the full Oracle product support system, not just the cloud support desk.
- Can create you own customizations, automation, scripts, utilities, etc.
- Can choose a hosting provider that meets specific regulatory requirements, compliances, change control, uptime, security standards.
Of course, this is a HUGE swag made with simple assumptions. The point is to just go through the exercise.
The moral of the story? There are many considerations when looking at deploying EPM and BI and there are many different kinds of “Cloud”. Due to current Oracle sales incentives you undoubtedly will be strongly pushed into the cloud from Hyperion reps. A lot of reps will be very resistant in selling you on-premise licenses as it’s not worth the time for the paperwork for them. It will be 100% up to you do your due diligence to fully compare all options in a holistic and unbiased fashion.
Beyond simply surface level costs, it important to evaluate the results of making decisions. For example, If you convert on-premise licenses to Cloud, are you making a one-way trip? Are you, in essence, selling your license asset back for pennies on the dollar and loosing your entitlement to come back on-premise? If you decide to leave the SaaS cloud, will you have to re-buy the software licenses? Important questions to ask.
Of course SaaS is a no-brainer choice for some customers. However, It’s important to evaluate EVERYTHING when choosing a deployment platform and understand peoples motivations an biases when you are being advised. Smart companies look at more than just cost-per-user and learning lessons from some early adopters that are now seeing the affect on burden of maintenance, integration, performance, security, flexibility, and functionality that could potentially cost them more in the long run.
Take a look! When you are ready to shop… check out the new site: http://shop.oracle.com
Mercury Technology Group (MTG) provides managed private hosted cloud solutions specializing in Oracle EPM, BI, EBS and associated products. Better performance, exceptional 24-hour rapid response support, and proprietary capabilities, all for a lower cost of on-prem or leading hosting providers.