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    Important Change to On-Premise Term Licenses

    Effective September 1, 2020, Oracle eliminated on-premise term licenses entirely. This strategic move limits buyer flexibility and forces a choice between perpetual licenses and cloud subscriptions. Here's what it means for your procurement strategy.

    Michael Corey

    Michael Corey

    Co-Founder & COO, LicenseFortress

    August 2020
    3 min read
    Important Change to On-Premise Term Licenses

    Announcement from Oracle

    With our joint customers' focus directed toward the Cloud and the on-premise customers moving more toward perpetual licenses, we made a strategic decision to eliminate on-premise term licenses, providing streamlined product and licensing selections when placing on-premise orders. Effective September 1, 2020, Oracle will no longer offer on-premise term licenses (1-5 year terms), with the exception of key Oracle Technology products that will retain 1-year term licenses (see list below):

    • Existing customers paying support on their term licenses will remain supported through the end of their term.
    • Perpetual licenses are not affected by this announcement.
    • Application Specific Full Use (ASFU) term licenses distributed in August 2020 can be reported until September 20, 2020.

    Impact on Quotes

    • All valid Q1 quotes with term licenses must be booked by the end of the quarter, August 31, 2020.
    • No new quotes should contain term licenses after August 31, 2020.
    • Released quotes with customer acceptance must be booked by September 10, 2020.
    • Any bookings after September 10, 2020, will not be processed.

    Impact on License Migrations

    • Term upgrades to longer-term licenses are discontinued (e.g., migrating a 2-year term to a 5-year term).
    • Term upgrades to perpetual licenses remain (e.g., migrating from a 4-year term license to a perpetual license). However, migrations from 1-year term to a perpetual license are discontinued.

    The below list of products will continue to be licensed using 1-year term licenses

    • Exadata Storage Server Software
    • Oracle Active Data Guard
    • Oracle Advanced Compression
    • Oracle Advanced Security
    • Oracle Database Enterprise Edition
    • Oracle Database In-Memory
    • Oracle Database Standard Edition 2
    • Oracle Database Vault
    • Oracle Diagnostics Pack
    • Oracle Forms and Reports
    • Oracle GoldenGate
    • Oracle Internet Application Server Enterprise Edition
    • Oracle Multitenant
    • Oracle OLAP
    • Oracle Partitioning
    • Oracle Real Application Clusters
    • Oracle Real Application Clusters One Node
    • Oracle Real Application Testing
    • Oracle SOA Suite for Oracle Middleware
    • Oracle Tuning Pack
    • Oracle WebLogic Server Enterprise Edition
    • Oracle WebLogic Server Standard Edition
    • Oracle WebLogic Suite

    From our case files

    How a client handled a shifting on-premises licensing model at renewal:

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    About the author

    Michael Corey

    Michael Corey

    Co-Founder & COO, LicenseFortress

    Michael writes on vendor strategy, audit behavior and the business realities of enterprise software agreements.