Private Hybrid and LesserKnown Models for Partners Lee Bank Senior Director of Alliances amp Channels Oracle Financing January 2015 2 Creating Competitive Advantage Give partners the option to provide perpetual license rights at the end of the service term ID: 557448
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Slide1
Cloud Model Choice
Private, Hybrid, and Lesser-Known Models for Partners
Lee Bank
Senior Director of Alliances & Channels
Oracle Financing
January 2015Slide2
2Slide3
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
3
Cloud Model Choice for PartnersSlide4
Program Agenda
Partner ChoiceAny CloudUnderstanding and Benefiting from Component Break-upTradeoffs and Considerations for Each Model
Next Steps
1
2
3
4
5
4Slide5
Cloud Model Partner Choice
Oracle Public Cloud
SaaS applications (CRM, HCM, ERP… Taleo, Endeca, Eloqua, Responsys)
IaaS, PaaS, XaaS
“Synthetic SaaS” Model
Bring Your Own License (BYOL)
Portable SaaS
“SI’s Proprietary Solution” Model
Business Process Services (BPS)
5
Public Cloud, Private Cloud, Hybrid and Lesser-Known ModelsSlide6
What Qualifies as a “Cloud” Solution?
6
?
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 ModelSlide7
Inside the Cloud “Black Box”
7
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
Svs
Database
Middleware
Applications
Software
Operating System
Implementation / Services
Support & Upgrades
Hardware
Data Center & Managed
Svs
Database
Middleware
Applications
Software
Operating System
Traditional On-Premise
Solution Model
All or only some “layers”
One-to-Many or One-to-One
(ISV or SI)
Single or Multiple VendorsSlide8
Decoupling Cloud Solution Components
8
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
Svs
Database
Middleware
Applications
Software
Operating System
Implementation / Services
Support & Upgrades
Hardware
Data Center & Managed
Svs
Database
Middleware
Applications
Software
Operating System
All or only some “layers”
One-to-Many or One-to-One
(ISV or SI)
Single or Multiple VendorsSlide9
Contracting / Structuring Options by Component
9
Traditional T&M or Fixed; billed as delivered
Incurred by partner “upfront,” but recovered over solution term
Cloud /
SaaS
Decoupled Acquisition / Contracting Options
Implementation / Services
Support & Upgrades
Hardware
Data Center & Managed
Svs
Database
Middleware
Applications
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-PartySlide10
Cloud Model Partner Choice
Oracle Public Cloud
SaaS applications (CRM, HCM, ERP… Taleo, Endeca, Eloqua, Responsys)
IaaS, PaaS, XaaS
“Synthetic SaaS” Model
Bring Your Own License (BYOL)
Portable SaaS
“SI’s Proprietary Solution” Model
Business Process Services
(BPS)
10
Public Cloud, Private Cloud, Hybrid and Lessor-Known ModelsSlide11
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*
2,3
Operating or expense structure options
3
Can include a
ll software, hardware, partner services
$
$
$Slide12
Tradeoffs & Considerations
12
+
-
“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 modelSlide13
Tradeoffs & Considerations
13
+
-
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 servicesSlide14
Tradeoffs & Considerations
14
+
-
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 purchaseSlide15
Next Steps
Schedule a Partner Cloud Models WorkshopWorkshop/deep-dive into model tradeoffs and considerationsCustomize 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:
lee.bank@oracle.com
305.531.802215Slide16
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