Exclusive Oracle customers could soon be the beneficiaries of an unlimited, all-you-can-eat licence for its core database, with the giant understood to be readying a deal that would grant use of its database in perpetuity at a flat rate.
Oracle’s prospective licence is being referred to as the Perpetual User License Agreement (PULA).
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Whatever the nomenclature, the deal differs to the existing Unlimited License Agreement that runs for a limited time, between one to five years typically.
At the end of an Unlimited License Agreement term customers count what they’ve used and reach settlement with Oracle for under or over use. But the licence in the works at Oracle blows away any time limitations.
Rather, the user will pay a fee – calculated by Oracle estimated on the size of your estate – for each year of unlimited deployment for database and options.
The only apparent requirement is that the customer follows through and commits to using Oracle’s software instead of that of rivals.
Oracle did not respond to request for a comment about the new licence. However, one source told The Reg Oracle is responding to aggressive competition from Postgres and others.
The proposed model would allow customers to plan their spending on Oracle’s software and to transfer it from a capital to an operational expense.
It would cut the up-front hurdle of capex and eliminate the potential for nasty surprises, such as when Oracle claims you’ve used more than you were entitled to following an audit.
The idea for Oracle’s licence is believed to have come from those who’ve joined the company from its nimbler cloud rival Salesforce. It’s not clear when the new licences will show up in Oracle’s official price list although one Register source reckoned it could be within a month.
Another, meanwhile, told The Reg Oracle had been offering such bucket pricing to customers for about 18 months as an option that was “off price list.”
Qualifying customers are those deemed either “large” or with a “significant” investment in Oracle.
An unlimited, all-you-can-use, flat licence based on an estimate would be a major departure for Oracle. It seems it's actually willing to give up on accurate measures of what customers are consuming and to trade that for an estimate.
This is a big change for a firm famed for its efficient licence compliance business, whose raison d'etre is to make sure customers are paying what’s owed.
Another major factor is the fact that Oracle would allow customers to shift the burden of paying for its software into a predictable open line item – precisely the move achieved by Software-as-a-Service firms like Salesforce and reckoned to have helped them.
The new model would be used to kick-start Oracle’s core business. The firm (again) missed analyst expectations in June, reporting a 5.4 per cent drop in revenue to $10.71bn in its fourth quarter, with a drop in net income of 24.4 per cent to $2.76bn.
And it’s software like the database that’s proving the millstone.
Software accounts for 73.1 per cent of Oracle’s business and sales of new software licences fell 16 per cent to $3.14bn in the quarter.
The driving factor seems to be a growing realisation that in turning to database rivals, Oracle risks losing vital customers and key accounts forever.
The analogy is Microsoft, when the giant was forced improve the way open-source apps worked on Windows or risk losing Windows platform sales to Linux. ®