Eye on Oracle

Jul 1 2009   2:02PM GMT

Is Larry getting a little SaaSy?

Shayna Garlick Shayna Garlick Profile: Shayna Garlick

The last time we looked at Oracle’s SaaS strategy, Oracle chairman Larry Ellison had largely rejected the idea of software-as-a-service, saying it wasn’t profitable enough. He said this, despite the fact that more than a few of his competitors have enthusiastically embraced the on-demand industry.

So has Ellison had a change of heart?

A year later, it looks that way. Oracle announced today SaaS for ISVs, a new pricing model that allows Independent Software Vendors (ISVs) to pay for its Oracle SaaS platform by the month rather than make an upfront investment.  This also allows ISVs to adjust their SaaS offerings to meet customer demand, according to Oracle.

Analyst China Martens calls this new licensing option part of the “continued gradual easing of Oracle into the SaaS arena,” according to the IDG’s Chris Kanaracus in this article.

Oracle has over 10,000 partners that are active ISVs in its partner program, said Judson Althoff, senior vice president, worldwide alliances and channels, in his video post on the Oracle site.  Althoff says that while Oracle has mostly serviced the “higher end of the SaaS market,” the new model will “allow us to reach a much broader base of ISVs, and better cater to you, the partner who wants to roll out a SaaS offering.”

Althoff also said the monthly cost structure will help the ISV “better manage cash flow” and “only pay for just the actual elements for the Oracle platform that (it) used in the previous month.”

Oracle has also begun promoting SaaS for ISVs on its SaaS Knowledge Zone and a new ISV and SaaS blog by Oracle’s Kevin O’Brien, Senior Director of ISV and SaaS Strategy for Oracle’s Worldwide Alliances and Channels organization.  According to an Oracle data sheet, the new pricing model will apply to the Oracle SaaS Platform from the Oracle Database, Oracle Fusion Middleware, Oracle Enterprise Manager and Oracle VM.

Oracle isn’t the only vendor to have made recent on-demand developments. SAP recently released its latest SaaS strategy, which includes on-demand applications for Business Suite customers that use a multi-tenant architecture rather than an isolated tenant model.

Where do you think Oracle stands in the SaaS market? Will this latest SaaS for ISVs offer help Oracle? Or, as some are saying, despite the new pricing model, is Oracle software just too expensive in the first place?

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