Oracle’s new licensing model could give AWS a run for its money

In a bold ambitious move, Oracle’s executive chairman and CTO, Larry Ellison announced two new programs aimed at lowering costs and increasing flexibility for its cloud customers.

The new cloud programs include Bring Your Own License (BYOL) to PaaS, and Universal Credits. The programs enable customers to get more value from their existing software investments.

With the new Bring Your Own License program, customers can use their existing software licenses for Oracle Platform-as-a-service (PaaS) offerings, including Oracle database, middleware and analytics.

The customer is then entitled to use that money on any cloud service, including IaaS and PaaS services. They can switch services or drop certain services without notifying Oracle, and can apply their credits to new services when they are made available.

Bring Your Own License, and Universal Credits are revolutionary in the way they have been designed.

Save money by leveraging your investment

The rationale behind the move is to maximize and leverage the investment a customer has made in Oracle on-premise licence, so that they can get the same cloud service at a significantly lower price.

“It depends on the service they’re going to use, but roughly, customers can save up to 75 percent with BYOL,” says Mitesh Agarwal, VP – solution consulting and CTO, Oracle India.

In the past, if customers took a license for the public cloud, they wouldn’t be able to use the same license for on-premise versions. “So if you are a license holder from Oracle, you can continue using on-prem the way you were, and in addition to that, you can start using the equivalent PaaS on Oracle public cloud at a fraction of the cost,” says Agarwal.

Why Universal Credits could be a game changer

With Universal Credits, the customer gets one single passcode or SKU which gives access to the entire suite of Oracle’s PaaS or IaaS. They can unlock a particular service at any time they want.

“This is not restricted to the current PaaS and IaaS offerings, but also for new services we’ll launch in the future. So in addition to flexibility, we’re also making it hugely affordable for them,” says Agarwal.

Under the Universal Credits model, you can either pay as you go, or subscribe to a monthly model, or you can also opt for the annual subscription.

Where Oracle scores over AWS

Oracle’s new rollout could result in a pricing war among cloud service providers in India. By allowing customers to save a significant amount of money and giving them freedom and flexibility, Oracle is now in direct competition with its formidable competitor, AWS.

Agarwal explains how the revamped licensing model beats AWS. “First of all, AWS doesn’t have any option of providing you the Bring Your Own License model. The second part is that they do not provide universal credits at all. Customers have to tell AWS upfront about services they will use, and then they are locked into that service. If that doesn’t suit you, too bad, your money is gone,” he explains.

“The flexibility we are offering is game changing in this respect. The Universal Credits model makes it extremely simple for the customer,” he adds.

What customers can expect with a fully automated database

In addition to BYOL and Universal Credits, Oracle also launched the Autonomous Database Cloud that aims at eliminating complexity, human error, and manual management. This helps ensure higher reliability, security, and more operational efficiency at the lowest cost.

One of the key issues you’ll find with the adoption of any technology is how you maintain, upgrade, or patch issues. One example that can be highlighted is the recent data breach in a large American company. The breach occurred because one of the administrators did not patch the database.

“Most of this is because of human error. What we’re doing is deploying a fully autonomous database that can patch vulnerabilities and carry out upgrades on its own. Nowadays waiting for an additional few hours can prove to be costly for a company,” says Agarwal.

What channel partners think about Oracle’s new rollout

Punit Thakkar, CEO of Shivaami Cloud Services says that it makes things much easier for the customer. However, he believes that channel partners will not benefit much.

“Channels would be interested if there is a recurring revenue model. That is the essence of the cloud. With this kind of a one-time payment story, there is hardly an option for recurring revenue. Customers would benefit out of it, but partners will not,” says Thakkar.

Sunny Sharma, Cloud Evangelist at Foetron opines that for Oracle, it’s definitely a competitive advantage. “People have already invested in a particular technology. If they get an upgrade roadmap, it becomes financially beneficial as they have already invested. Now that the cost is lower, retention is easy as there is no migration happening. So when a competitor comes in, not only does it have to give a better product, but bear the cost of migration as well.” 

Sharma explains that as the market is going towards maturity, this strategy will bring simplicity and drive adoption, in addition to driving retention. The market will respond well, as they got what they wanted.