Filed under: Data Center, IT Financial Management, IT Strategic Planning, Microsoft, Negotiations, Oracle, Outsourcing, Risk Mitigation, SaaS, Software, Subscriptions, Total Cost of Ownership
Microsoft is aggressively discounting its hosted / SaaS solutions in order to gain market share, and I suspect, to sway customers from the EA / Select / perpetual license model, onto the rental / cloud / SaaS model.
Microsoft cuts prices on BPOS, to issue refunds –
Microsoft seeks to lure Salesforce, Oracle users with six months free of CRM Online
Microsoft chops prices of its hosted enterprise cloud offerings
But you’ll note that’s only on the hosted offerings.
Also of note, Microsoft’s huge new billion $ datacenters in Chicago and Dublin are now open for business. With more coming soon.
On the traditional licensing front, Microsoft just announced price increases for SQL Server.
So, clearly, MSFT is betting big chunks of cash on swaying customers to its hosted services, and as a consequence the traditional licensing models are becoming slightly less attractive. I would advise Microsoft customers to consider the true costs and benefits of moving from a traditional licensing approach, to a model such as BPOS. As in most things regarding Microsoft’s sales practices, there are hidden factors that may not come to light unless you ask the right questions.
Filed under: Hardware, Microsoft, Oracle, SaaS, SAP, Software, Subscriptions
There appears to be a significant amount of buzz around Web 2.0, what it is and how do you get some… If you do a Google search on Web 2.0, you are using Web 2.0 technology! Just by the fact you are reviewing this blog post means you are using Web 2.0 technology.
Why would a professional optimization firm write about Web 2.0?
The newest versions of applications, services and hardware touted by companies like IBM, Oracle, Microsoft and others are being sold as Web 2.0 necessities.
So what is Web 2.0?
If you click on some of the results from your “Web 2.0” Google search, many people say Web 2.0 is nothing more than a marketing spin on the natural progression of Internet technology. So why then are Enterprises being encouraged to pay premiums based upon marketing and hype? Continuing a tradition among technologists to buy the latest and alleged to be the greatest? Beyond that, we have no clue! But, we can try to put some context around what is Web 2.0?
Quite simply, one can look at a website or application as being Web 2.0 if it contains any of the following characteristics:
- A user centric customizable interface (i.e. use of widgets to customize pages)
- Community updates like those found in Blogs or Wiki pages
- Uses the Web as its delivery platform and is entirely browser accessible
- Allows for collaboration like that found in Instant Messenger or other Social Networking sites
- Utilizes user generated “Dynamic Content” for updates
- Software as a Service (SaaS) by definition, uses the Web as its delivery platform
- Provides for a rich use experience
Who can argue with those, almost like motherhood and apple pie (all good). Those characteristics are so all encompassing, almost all software fits into at least one of the categories above. Still, by using the latest buzz word and labeling products “Web 2.0”, technology companies are jumping at the opportunity to capitalize on the ambiguous definition of “Web 2.0” and trying to use it to compel buyers to pay a premium to obtain it. At NET(net), we consistently rally against hype and focus on business value received relative to financial investment expended. This is where Web 2.0 falls flat (in our humble opinion).
Filed under: IT Financial Management, Negotiations, Oracle, Risk Mitigation, Service & Support, Software, Total Cost of Ownership
It appears Oracle has increased its due diligence in the area of auditing customers. On the one hand, this exercise may be helpful (as Oracle will profess) in enabling customers to better understand holistically precisely what their entitlements are and to what degree those entitlements are being leveraged. This is useful information that many customers often struggle to reconcile on their own, and could shed some light on where opportunities for downsizing of entitlements might occur.
On the other hand, customers should be cautious. In a down economy, where the volume of deals and overall license spending is lower than desired, auditing is a means by which Oracle may be hoping to find opportunities for incremental licensing events. Especially for customers who either may not have been positioned to actively keep track of utilization trends over time, or who may not be familiar with original agreements and the parameters of utilization in these agreements, Oracle will be seeking to capitalize whereever possible to bring your license entitlements and utilization back into compliance.
Resolving compliance issues is likely to be done through a new licensing event. Unlike a situation where a customer may be giving Oracle an opportunity to earn additional licensing business via a purchase that is not the result of an existing contractual obligation to Oracle, it is more challenging to negotiate a favorable license arrangement to adress compliance matters. In fact, with certain product families, it is likely that the costs associated with the need to add incremental licenses has already been identified. With other product families, Oracle is likely to use its standard list pricing as a starting point, and given that the absence of the licenses constitutes a breach of contract in a compliance situation, they are not under as much pressure to discount. This puts the customer at a disadvantage, not only as it relates to the new license cost, but the associated maintenance costs related with those new licenses too – as the maintenance and support services costs are generally based on the net license value.
Customers would be well advised to invest time in assessing their license entitlements and utilization, and truly ensuring the parameters of their licenses are well accounted for, in advance of Oracle aggressively pursing completion of an audit. If misalignment is identified, and you find that you will require additional licenses to ensure your utilization needs are met into the foreseeble future, it is better to address that with Oracle proactively with bringing a new license opportunity to them. Given the possible stakes, this may be an area where enlisting professional help may be a worthwhile investment to either a) ensure you have no exposure; or b) help you address any potential exposure in a way that is most optimal for your organization.