Oracle has come under considerable fire over the years for its restrictive license terms and aggressive audit program, but it appears at least some change is on the way.
Companies using Oracle’s namesake database may soon have the option of choosing a new license that offers flat-rate pricing for unlimited use of the product in perpetuity, according to a recent report, and at least one consultant confirms the news.
“We have seen them in the wild,” said Craig Guarente, co-founder and CEO of Palisade Compliance, which helps Oracle customers negotiate with the database giant. “It’s not a rumor—Oracle is putting that in front of customers.”
Oracle did not immediately respond to a request for comment.
Oracle has long offered what it calls its Unlimited License Agreement, which spans a limited time—typically three or four years. At the end of that time, customers must certify their usage to Oracle and pay for anything extra that got used along the way.
The new Perpetual User License Agreement (PULA), on the other hand, removes that time requirement and is also priced as a yearly fee according to estimated usage instead, according to The Register, thereby minimizing the risk of audits or demands for additional payment down the road.
The new license could also give customers the ability to transform expenditures on Oracle’s software from a capital expense to an operational one, much the way the increasingly popular software-as-a-service (SaaS) world has.
Oracle in June reported that sales of new software licenses, which account for roughly a third of its overall revenue, had declined 17 percent since last year, while SaaS revenue had increased 29 percent.
Because the PULA licenses are still new, they’re likely highly negotiated, and Oracle is probably still tweaking the requirements, Guarente said. So, one company’s PULA would probably look different from another’s, he suggested.
“They’re expensive,” Guarente added. “It’s not a way to spend less with Oracle. I would caution people not to think this is unlimited forever, with no restrictions.”
Overall, “I think it is an effort to lock out competitors,” he said.
Oracle “must be seeing more of a threat from competitors who are easier to deal with, including open source providers such as Postgres,” agreed Frank Scavo, president of Strativa.
In fact, according to The Register’s report, the new PULA requires that the customer commit to using Oracle’s software over competing products.
Whether such a requirement could hold up in the legal world, however, is far from clear.
“I seriously doubt that Oracle will be able to enforce any terms and conditions that call for a customer not to use a competing product,” Scavo said. “That might border on restraint of trade, in my opinion.”
Indeed, “I would be shocked if that was in the contract,” Guarente agreed. “That would be problematic.”
Of course, “if you’re paying any vendor to use their products, why would you use a competing product?” he added.
The new license arrangement could be good news for customers if it makes database license costs more predictable and less subject to compliance disputes, Scavo said.
“It looks like a good move by Oracle,” agreed Duncan Jones, a vice president at Forrester Research. “It can’t fix its obsolete commercial model, but it can help some customers work around it—if they spend some money.”
The risk for customers is that “it’s probably a ‘till death do us part’ deal,” Jones added, “so check the prenup before you say ‘I do.’”