Paul Kedrosky points out "Oracle (ORCL) plans to phase out license sales in the next 18-36 months, First Albany says in a note citing "industry contacts." License sales, which reflects new business, has always been a key figure for software companies, but ORCL has recently been encouraging analysts to take a closer look at the more stable maintenance streams."
As Oracle offers to move them to subscription or "all you can eat" terms, it is a golden opportunity for customers to play hardball on maintenance costs. That cost is broken out today - and over priced. Need to hammer that down (or move to growing third party options) and use that as the benchmark for the new pricing - once you move to subscription or buffet pricing it will be much harder to break out license, maintenance and in case of SaaS, hosting and other labor. You do not want to move over at today's inflated pricing..
Talking about 3rd party maintenance options, NetCustomer announced offerings for PeopleSoft and JD Edwards customers this week - at half of what Oracle charges for maintenance. If you are reasonably stable and primarily need bug fixes and help desk, third party maintenance options make a lot of sense for the next few years. Even if Fusion is on time, the reality is most customers will likely not migrate to that for 5-6 years. Do the math at 22% of license cost a year.
Update: Rick Sherlund of Goldman Sachs points out susbcription pricing is not happening any time soon at Oracle. It is interesting to read reasons why CA moved to that model in 2000. In many ways, Oracle today is like CA then. Lots of acquisitions. Confusing price book. Customers generally unhappy with value to price ratio.
