Oracle Offers ISV Partners Flexible Terms For SaaS Software

By Rick Whiting, CRN
June 30, 2009 3:07 PM ET

Oracle is offering its Software-as-a-Service ISV partners the option of paying for Oracle's "Platform for SaaS" software on a monthly basis, a move that Oracle says will make it easier for smaller ISVs, managed service providers and other partners to match expenses to service revenue.

Oracle is counting on the new commercial licensing model, called "SaaS for ISVs," to give it a competitive edge against IBM, Microsoft, Salesforce.com and other vendors that provide SaaS platform technologies.

SaaS applications are becoming a popular option in the current recession because they don't require upfront capital expenditures for perpetual software licenses and infrastructure hardware. But ISVs and service providers that develop and host SaaS applications face a cash-flow problem: They must purchase the SaaS platform software up front while the revenue stream from their customers slowly grows.

"Smaller SaaS providers and ISVs have been looking for a more flexible way to license Oracle software," said Kevin O'Brien, director of SaaS strategy and programs at Oracle, in an interview. "This allows them to get started without a lot of investment."

Under the new plan, which is available now, ISVs that host their applications, managed service providers and systems integrators can purchase license and support for Oracle's SaaS platform software on a monthly basis with no long-term commitment. Until now the alternatives have been to purchase a perpetual license or a two-year term license.

The price of the license and support is based on Oracle's global price list and is calculated on the number of processors the ISV or service provider is running the software on, O'Brien said.

The new licensing model applies to all components of the Oracle Platform for SaaS, including the Oracle Database and related products such as Real Application Clusters; Oracle Fusion Middleware, including the WebLogic Application Server; and Oracle Enterprise Manager.

Oracle has worked with about 250 ISVs that have built their applications on the Oracle Platform for SaaS, O'Brien said.

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