August 26, 2011 Leave a comment
(by Tam Kyle, – the second part of our close look at Oracle On Demand and how to make it work for your business)
So, now that we’ve purchased licenses for the module of choice, that’s it done? Well no, that was the easy bit. Anyone can purchase Oracle E-Business Suite modules – you’re interested in On Demand, because it’s a value add service. As the name suggests, you get something that responds to your needs.
Require an additional testing environment for that R12 upgrade? – there you go. Want a new functional modification implemented to show real time expense monitoring? – no problem. Are my applications being backed up and monitored regularly? – sleep easy.
What’s the Catch?
However, you don’t get this for nothing. If you were doing this in-house then you’d be paying for IT resources, and software tools to do it for you – this is no different, except that you’ve now got the ability to call on these resources from a wide swath of technical and operational capability at Oracle to provide your needs, and these have to be paid for. So what you’ll also see is billing for storage, new environments, VPNs and so on. But how are you paying for all the Oracle resource that’s working on your behalf?
Well, you also have to license each of your users of the On Demand Service (which may be more than your business population) so now you have the concept of an On Demand authorised user – someone that you authorise to use the service on your behalf. These are priced on a monthly basis; so for example, you could have 20 Application users (of say, Financials) for 6 months. This cost goes someway to paying for the resource you’re consuming at OOD.
Phew, glad that’s over…
‘Fraid not – now we come to the interesting bit…
Remember that modification I mentioned above? You’re probably aware that purchases of the Oracle E-Business Suite modules come with restricted use technology licenses. Basically you tend to get the supporting database and middleware licenses for nothing, PROVIDED that you don’t alter the functional structure of the applications.
Now, the reality is that most customers make alterations to their Oracle E-Business Suite implementations over time. Practically everyone has bespoke needs that just aren’t provided in the products out of the box.
So you might tweak some screens, or provide new ones. You might even go so far as to implement some new tables and stored procedures to give your boss that whizzy new function he was speaking so sparkly-eyed about. Well, you’ve more than likely just rendered your technology implementation licensable. (Watch out for my next blog post on ‘Oracle E-Business Customisations’, which will go into much more detail on the impact of this.)
How is this possible? Don’t I get everything bundled together?!? I didn’t sign up for this – well, actually you most probably did and in On Demand Part 3, I’ll explain how.