Oracle Customers Should Understand the Power of a Perpetual License

In recent years, software vendors increasingly have shifted the model for purchasing software from a perpetual license followed by a stream of maintenance to a subscription model in which software is sold as a subscription renewable on an intermittent basis.

There are advantages for both vendors and customers with each model. With a subscription model, software vendors celebrate the fact that their customers avoid a large up-front payment. Additionally, subscription software is often hosted in the cloud, which means that the vendor takes responsibility for hosting, operating, and upgrading the software, easing the burden on the customer.

But just because subscription models are new and gaining in popularity doesn’t mean that perpetual licenses are always the wrong way to go. There are a variety of situations in which a perpetual license can offer customers enormous advantages and flexibility, especially if alternatives to traditional support are part of the picture.

In this article, we will revisit the idea of the perpetual license and consider how it provides customers power that the subscription model leaves behind.

The Basics of a Perpetual License

The basics of a perpetual license are easy to explain and are suggested by the name of the license itself: a perpetual license allows a company to use software forever, whether that is in the cloud or on-premises. One key feature of a perpetual license is that it allows this usage even if support is not purchased in conjunction with the access to the software.

Often, older perpetual licenses are looser in the access they grant and have many provisions that benefit the customer. This flexibility can be put to good use, especially in conjunction with third-party support, allowing customers to get more out of their contract than they would otherwise. It’s worth delving into these advantages to truly understand how perpetual licenses can benefit a business.

The Advantages of a Perpetual License

One of the most advantageous features of a perpetual license is that it eliminates the need for a company to deal with upgrades. Instead of having to pay for a new license each time a new version of the software comes to market, a company can keep on using the product without negotiating a new deal. This is especially relevant for customers of vendors like Oracle that are constantly acquiring other products and adding new features and capabilities to their product portfolio. Customers get access to new features without a new license. This means the existing software ends up working better for no added cost. With a perpetual license for Oracle and certain other vendors, companies can move workloads that make sense to the new offerings while keeping many of their other workloads in place, functioning as before. This is often the case with databases, which can stay in place and be supported with third-party support, saving money because perpetual licenses don’t force upgrades.

Additionally, with a perpetual license, companies can avoid having to undertake a massive software overhaul when they want to adopt or integrate cloud functionality. Instead, they can begin to use the cloud as they see fit while also keeping their existing systems in place. This is a big advantage for most companies as few businesses use cloud as a complete replacement for all of their existing systems. They’re operating in a hybrid environment and a perpetual license allows them to do so without breaking the bank.

Ultimately, companies can net significant savings by using perpetual licenses — especially when paired with third-party support.

How Third-Party Support Can Amplify the Advantages of a Perpetual License

Linking a perpetual license with third-party support has a number of benefits for companies that are not always available with a subscription license model. Foremost among these is cost savings — in the instance of upgrades or incorporating new features, companies with a perpetual license can gain access to these improvements for free and then also achieve support for them under their third-party support agreements without incurring new costs.

Ultimately, this points the way to another key benefit of matching perpetual licenses with third-party support: namely, it allows a business to make the best use of the software they have.

Third-party support recognizes that mature product software maintenance has generally provided little value. The reason for this is that software doesn’t wear out like hardware and mature software doesn’t generally change that much over time. Additionally, the support offerings from vendors generally don’t cover the problems companies have with the software, which are usually related to changes in data and code. Third-party support does help with these aspects by comparison.

Third-party support can also support hybrid models better where there is custom code involved — an occurrence that is common for many companies. When products have been built with custom code, the documentation about how to support them is usually thin or nonexistent, as those who did the developing are often no longer with the business. Parts of the software with custom code often become black boxes where people avoid changing anything so long as the software keeps working.

But what happens when something breaks? Traditional maintenance models don’t offer true full support, which includes helping customers navigate problems that may arise due to custom code. This makes no sense, as Oracle and SAP products are specifically designed to allow companies to tailor the software to their individual needs. Third-party support can help companies navigate problems that arise due to custom code.

Another advantage is that with traditional maintenance models purchased directly from vendors, the model has really become to support bug fixes, not necessarily to help the customer improve best practices moving forward, or to consume more of what they’ve already purchased in a more efficient manner. Third-party support is often measured differently than traditional vendor support. For example, to compete with vendor support, third-party support companies often place strong emphasis on public client satisfaction ratings versus measuring success by the number of tickets they close. This transforms how they interact with customers, finding ways to fix what’s broken while also adopting a better overall solution so that fewer things break in the future. This moves companies to the maturity era of a product faster. It reduces the amount of time companies have to spend supporting a product overall as well.

Finally, third-party support can mean geographically localized, follow-the-sun support, in whatever language is necessary, instead of offshore support that is one-size-fits-all. This aids international companies in navigating support from a cultural and linguistic perspective. It also allows companies to build strong relationships with their support team. This is a win for everyone committed to moving forward with new products as they become available, taking full advantage of the new features those products offer for the enhancement of their businesses.

It’s important to note that not all third-party support is created equal, so IT organizations should conduct due diligence when comparing third-party support options, especially those organizations that run 24x7x365 on a global scale.

Author: Dan Woods

My mission: Find technology for Early Adopters. Follow me on Twitter @danwoodsearly and on LinkedIn www.linkedin.com/in/danwoodsearly/. I am a CTO, writer, and consultant. For tech vendors, I help explain their technology. For users, I help find, select, and deploy new solutions that have explosive business value. I love to speak and share ideas.