Oracle announces simplified pricing model for cloud computing

Oracle chairman and CTO Larry Ellison has announced a cloud pricing programme that includes what the supplier calls “bring your own licence to PaaS” and “universal credits”.

The new suite of commercial arrangements for Oracle products delivered over the internet is said to “lower costs by delivering increased automation and flexibility” as well as “enabling customers to get more value” from on-premise software they have already bought.

In a statement released to coincide with a launch event at the company’s headquarters in Redwood Shores, California, Ellison said: “We are completely transforming the way all companies buy and use cloud by providing flexibility and choice. Today, we combined the lowest prices with the highest performance and more automation to deliver a lower total cost of ownership for our customers.”

Oracle, like other originally on-premise enterprise software companies such as SAP and Infor, has been on a long march to the cloud in recent years.

The supplier said that many organisations, although eager to transition, have not done so “due to obstacles that have forced them to choose between flexibility and lower costs”.

It added: “They have been challenged by the complexity of the cloud and the inability to rebalance spend across different services.

“Organisations have also been constrained by limited visibility and control over cloud spend. Until now, they have been unable to fully leverage their on-premise software investments in the cloud, having been limited to IaaS [infrastructure as a service] or sacrificing key database features at the PaaS [platform as a service] layer.”

At last year’s OpenWorld conference, Ellison led on IaaS, with Amazon Web Services in his sights. Customers can bring their on-premise licences to Oracle IaaS, and the supplier is now extending this to PaaS, including the database, middleware and analytics.

At the launch event, Ellison said: “Our strategy in IaaS was to be extremely aggressive on list prices... and to run Oracle workloads faster on our infrastructure than on Amazon’s. Our strategy on the platform was different. The majority of the cost on the database and middleware is labour. So, to compete there, we reduce the amount of labour by automating. That reduces human error, too.

“If you don’t patch the database at Equifax, for example, that can be expensive. Our [overall] goal is to guarantee that if you move a workload from Amazon to Oracle, your bill will drop by 50%.”

Oracle is also introducing what it calls “universal credits”, which it said offers “one simple contract that provides unlimited access to all current and future Oracle PaaS and IaaS services, spanning Oracle Cloud and Oracle Cloud at Customer”. It added: “With universal credits, customers gain the ability to switch the PaaS or IaaS services they are using without having to notify Oracle.”