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Just a note: as far as I know only 20.3% of Oracle's revenue came from the sale of new software licenses and hardware while four times that much, or 79.7%, is f
by tlogan 12y ago
Just a note: as far as I know only 20.3% of Oracle's revenue came from the sale of new software licenses and hardware while four times that much, or 79.7%, is from annual maintenance fees and services (basically some kind of subscription). It is very dangerous to assume that these big companies are stupid.
- orky56 12y agoYou could argue that those stats are a reflection of a mature company with the license model. When they were in a similar position to many of these SaaS companies we are discussing, their license fee and customer acquisition cost were enormous. That automatically self-selected their customers to be large enterprises, who they were completely dependent on. The initial license fee is such a large proportion of LTV compared to maintenance fees. With SaaS, companies are banking on scalability, personalization (multitenancy), and less sources of friction. Establishing a successful SaaS company allows them to realistically chase the long-tail of SMB that single-license companies cannot scale to do effectively.