How ‘Bring Your Own License’ Fits into Oracle’s Cloud Strategy

Earlier in the series, we discussed Oracle’s (ORCL) software licensing business performance in fiscal 2Q17. We also discussed Oracle’s claim that BYOL (bring-your-own-license) is bringing growth to new software licenses. Now let’s look at what BYOL is and how it could complement Oracle’s transition to the cloud.

BYOL, launched in September 2017, provides flexibility to customers by enabling them to move their on-premise license to the company’s PaaS offerings. Oracle’s PaaS (platform-as-a-service) offerings include database, middleware, and analytics.

Oracle’s BYOL has resulted in significant management and operational costs, as with BYOL, customers with existing on-premise licenses can use Oracle’s PaaS at a fraction of the previous PaaS price. Oracle has already applied the same strategy to its IaaS (infrastructure-as-a-service) offerings.

With BYOL, Oracle is addressing the challenges faced by customers with on-premise software investments, while they transition to cloud. Thus, BYOL eased the transition to cloud and will lure customers into the cloud, enhancing Oracle’s presence in the overall cloud space.

Citing Meaghan McGrath, an analyst with Technology Business Research, ARNnet wrote that customers are starting to view BYOL “as a cost-effective means to leverage license investments as they transition to cloud.”

McGrath said, “Oracle expects this improvement in license and maintenance on the platform and infrastructure side to improve notably as the autonomous database becomes available and customers purchase supporting technologies around database licenses and host them on Oracle’s Cloud Infrastructure.”