The Village View

Wednesday, March 29, 2006

Oracle is testing the subscription waters

the company is experimenting with a subscription model in Latin America. "We are running a program in Latin America where we bundle software licenses, support, implementation, apps management and hosting for our E-Business Suite and then charge a monthly fee," said Chris Hummel, vice president of Oracle On Demand. "We continue to evaluate this program and incorporate the learning into our global products and services."

I blogged about the possibility of Oracle going to a subscription model last month. And Larry was at it again, talking about Oracle's "subscription revenue" in the recent earnings announcement. (Of course, what he calls "subscription" in today's revenue stream is what the rest of the industry calls "maintenance.")

It's too early to tell if Oracle will actually change it's licensing & sales model or if its just trying to get a valuation bump by convincing the Street that its maintenance revenue should be valued at a higher multiple.

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