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JD EdwardsSummit
Cloud Model ChoicePrivate, Hybrid, and Lesser-Known Models for Partners
Lee BankSenior Director of Alliances & ChannelsOracle FinancingJanuary 2015
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Creating Competitive Advantage
• Give partners the option to provide perpetual license rights at the end of the service term• Drop software input costs to $0 for customer renewal terms• Allow customers to leverage existing software licensing and hardware
investments• Recover implementation costs upfront even when customer payment is
spread over the solution term
Cloud Model Choice for Partners
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Program Agenda
Partner Choice
Any Cloud
Understanding and Benefiting from Component Break-up
Tradeoffs and Considerations for Each Model
Next Steps
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Cloud Model Partner Choice
1) Oracle Public Cloud– SaaS applications (CRM, HCM, ERP… Taleo, Endeca, Eloqua, Responsys)– IaaS, PaaS, XaaS
2) “Synthetic SaaS” Model– Bring Your Own License (BYOL)– Portable SaaS
3) “SI’s Proprietary Solution” Model4) Business Process Services (BPS)
Public Cloud, Private Cloud, Hybrid and Lesser-Known Models
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What Qualifies as a “Cloud” Solution?
?
Cloud / SaaS Solution Model
Off-Premise, Hosted
No IT or Data Center Resources Required
Seamless Bug Fixes and Upgrades
Fixed Term (with Termination Fee)
Monthly (or Periodic) Payments
No Ownership / No Capital Expense
(Services / OpEx Accounting Treatment)
Cloud / SaaS Solution Model
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Inside the Cloud “Black Box”
Off-Premise, Hosted
No IT or Data Center Resources Required
Seamless Bug Fixes and Upgrades
Fixed Term (with Termination Fee)
Monthly (or Periodic) Payments
No Ownership / No Capital Expense
(Services / OpEx Accounting Treatment)
Cloud / SaaS Solution Model
Implementation / Services
Support & Upgrades
Hardware
Data Center & Managed SvsDatabase
MiddlewareApplications
Software
Operating System
Implementation / Services
Support & Upgrades
Hardware
Data Center & Managed SvsDatabase
MiddlewareApplications
Software
Operating System
Traditional On-PremiseSolution Model
• All or only some “layers”• One-to-Many or One-to-One
(ISV or SI)• Single or Multiple Vendors
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Decoupling Cloud Solution Components
Off-Premise, Hosted
No IT or Data Center Resources Required
Seamless Bug Fixes and Upgrades
Fixed Term (with Termination Fee)
Monthly (or Periodic) Payments
No Ownership / No Capital Expense
(Services / OpEx Accounting Treatment)
Cloud / SaaS Decoupled Illustration
Implementation / Services
Support & Upgrades
Hardware
Data Center & Managed SvsDatabase
MiddlewareApplications
Software
Operating System
Implementation / Services
Support & Upgrades
Hardware
Data Center & Managed SvsDatabase
MiddlewareApplications
Software
Operating System
• All or only some “layers”• One-to-Many or One-to-One
(ISV or SI)• Single or Multiple Vendors
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Contracting / Structuring Options by Component
• Traditional T&M or Fixed; billed as delivered• Incurred by partner “upfront,” but recovered over solution term
Cloud / SaaS Decoupled Acquisition / Contracting OptionsImplementation / Services
Support & Upgrades
Hardware
Data Center & Managed Svs
DatabaseMiddlewareApplications
Software
Operating System
• Direct with Oracle• Co-sell, Re-sell, or Pass-thru with Partner• Previous licensing transaction• ULA in midterm
• Proprietary, Private Label, Re-sell or Reference (Partner’s Partner)• Third-Party
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Cloud Model Partner Choice
1) Oracle Public Cloud– SaaS applications (CRM, HCM, ERP… Taleo, Endeca, Eloqua, Responsys)– IaaS, PaaS, XaaS
2) “Synthetic SaaS” Model– Bring Your Own License (BYOL)– Portable SaaS
3) “SI’s Proprietary Solution” Model4) Business Process Services (BPS)
Public Cloud, Private Cloud, Hybrid and Lessor-Known Models
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Cloud Model Partner Choice
11
Public Cloud, Private Cloud, Hybrid and Lessor-Known Models
Model Name (licensing model) Licensee (on Oracle Order) Price List / Products
1. Public Cloud Applications/Subscriptions (SaaS/subscription only, no perpetual rights)
End-customer only (direct, resell to be introduced, referral) Cloud only
2. “Synthetic SaaS” (subscription-structure option with perpetual rights) End-customer (direct, resell/co-sell) All Oracle Apps/Tech
3. “SI’s Proprietary Cloud Solution” (subscription-structure option with perpetual rights)
Partner (direct or resell from VAD and/or VAR) All Oracle Apps/Tech
4. BPS (Subscription only, no perpetual rights) Partner only Most all Oracle Apps*
2,3Operating or expense structure options 3Can include all software, hardware, partner services
$$$
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Tradeoffs & Considerations
+ -“Synthetic SaaS”
• Any contract term (12-60 mos)• Customer (not partner) has all payment
risk• Allows for operating or capital expense
accounting treatment• Customer builds equity towards
perpetual license purchase option• No contractual obligation for partner to
provide or define “BPO Services”• Easy to include partner’s
implementation or other services• Customer can change hosting vendor or
take solution in-house (at end of term)
• Vendor contracts / pricing is exposed to customer
• Best only for IT-savvy customers• Least repeatable model
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Tradeoffs & Considerations
+ -SI’s Proprietary Cloud Solution
• Partner can offer any pricing / structure / terms
• Partner receives end-of-term purchase option (large profit upside with customer)
• Flexible terms for transfer of perpetual software license to customer (if desired)
• Reallocation of tech hosting licenses to a different customer (but not Apps licenses)
• Highly repeatable model
• Partner owns all payment risk• Difficult to include implementation
services
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Tradeoffs & Considerations
+ -BPS (Oracle Business Process Services Resell)
• Easy – standard price list• Pretty packaging (opaque pricing)• Operating expense payment match
revenue cash flows
• Smaller margin• Partner owns payment risk (except in
the case of customer bankruptcy)• BPO agreement required; Partner must
meet BPO Go-to-Market Program requirements and demonstrate BPO expertise and ability
• No ownership option; no equity / credit created towards purchase
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Next Steps
• Schedule a Partner Cloud Models Workshop–Workshop/deep-dive into model tradeoffs and considerations– Customize the discussion to your and your customers’ requirements (one-to-one)
• It’s your choice– Don’t believe “That product/functionality isn’t offered as a SaaS/Cloud solution”– Use choice and flexibility to create competitive, economic or GTM advantage
• Contact info:– [email protected]– 305.531.8022
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