Oracle's Offer Of A Lifetime - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Software // Enterprise Applications
News
10/3/2005
12:23 PM
Connect Directly
Twitter
RSS
E-Mail
50%
50%

Oracle's Offer Of A Lifetime

Offering customers "lifetime support" sounds so charitable. Oracle made that pledge last month to reassure users of Siebel, PeopleSoft, and JD Edwards applications. But that stream of support and maintenance revenue is part of why Oracle bought those companies, along with the chance to upgrade their customers. And third-party support competitors are vying for those customers.

Here are the economics, laid out by Oracle's VP of licensing strategy, Jacqueline Woods: In the first five years after a purchase, a company pays what amounts to 22% of the software's purchase price. In year six, the annual price goes up 10%, and for years seven and eight, it's another 20% hike. In year nine, it reverts back to the price of the first five years, but support doesn't include updates that keep an application in line with regulatory changes. Seth Ravin, president of Rimini Street Inc., a startup selling Siebel support, says: "What they're really doing is charging a premium price for a declining level of support."

Woods says most firms aren't going to use a 9-year-old payroll system, and those that do can access Oracle's self-service sites. And of course, Woods says, they can upgrade to a new Oracle app.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Commentary
Get Your Enterprise Ready for 5G
Mary E. Shacklett, Mary E. Shacklett,  1/14/2020
Commentary
Modern App Dev: An Enterprise Guide
Cathleen Gagne, Managing Editor, InformationWeek,  1/5/2020
Slideshows
9 Ways to Improve IT and Operational Efficiencies in 2020
Cynthia Harvey, Freelance Journalist, InformationWeek,  1/2/2020
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
The Cloud Gets Ready for the 20's
This IT Trend Report explores how cloud computing is being shaped for the next phase in its maturation. It will help enterprise IT decision makers and business leaders understand some of the key trends reflected emerging cloud concepts and technologies, and in enterprise cloud usage patterns. Get it today!
Slideshows
Flash Poll