Oracle puts a price on single-tenancy

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Oracle has it right.

SaaS is a licensing and delivery model which is built for low-cost (to both ISV and user) delivery. Users believe that the single-instance, multi-tenant stack helps to make their services less expensive, but if Oracle (or SF, or NetSuite) were to move to managed single-tenancy and were still able to provide the services at the same cost to users, I don't think anybody (except Marc B.) would cry foul. In fact, they aren't. In IDC surveys, when we ask "SaaS-savvy" users about the value of MT the message is pretty clear: they save money, and they see MT as the reason. But what I don't understand is the notion that "SaaS purists would argue that by...(building MT pods with tiered patch and upgrade schedules), Lye misses out on some of the most significant economies of scale of the multi-tenant model."
If Oracle can serve the needs of its customers - which it knows well - and still provide a TCO which is very competitive, what exactly is the point in clinging to a rigid taxonomical distinction around MT SaaS? Lye knows how to build a profit plan, and Oracle knows how to run a datacenter, and Oracle customers have choice between ST or MT (or another vendor), and Oracle is growing the On-Demand business at a very healthy clip (although at <3% of 2008 revenue, it's still a drop in the bucket). Questioning Oracle's MT purity may make for good Tweets, but it's hard to argue that they aren't serving their customers...
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Posted by: rmahowald   Posted on: 01/29/09 You are currently: a Guest | Members login | Terms of Use

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