Oracle’s end of year is approaching this May, which means very likely the bulk of your Oracle support contracts are also coming up for renewal. In this blog we are going to talk about one of your most likely largest IT expenses, your Oracle annual maintenance bill! This painful bill is due ever year, without fail. There are actually whole teams, separate from your Oracle sales team, that are just focused on getting you to pay for that renewal each year. What are some reasons this bill grows each year and makes it so hard to reduce costs? Here’s some reasons why….
1. Inflation - These bills increase each year by at least 3% regardless of whether you use the software or not! That’s Oracle’s “inflation costs”. As you can imagine, clients with very large support bills can incur hundreds of thousands of dollars in increased costs per year for the same products and services! This is ONE of the reasons Oracle’s support revenue stream contributes to half of Oracle’s earnings.
2. Re-pricing - It is very hard to drop products from support even if you are not using them, due to a support policy called “re-pricing.” This policy basically states that if you try to drop products from a support contract, the remaining products on support will “re-price”, and often times will turn out to be higher than the original support contract. This isn’t the case ALL the time, (because we do find support savings for our clients, even with this policy), but it takes a good knowledge of Oracle’s support and business practices to make this happen.
3. Matching Support Levels – This policy states that you can’t have some products on Oracle support and some not on support. Therefore, you can’t drop 30 Procs. of Oracle Database support yet keep another 30 procs of Database on support. Simply because Oracle’s rationale is how do they know which databases are you calling in about? Therefore, if you want to drop support you have to terminate these products, which means you no longer own them, and any investment you have made goes, “poof” away! This is a very frustrating policy for many, but again, how else can Oracle protect their ever powerful and critical support revenue stream.
These are just some support policies we thought worth sharing with our Olitech community. Although these policies can be confusing and strict, the picture is not all dismal. We have helped many clients save on Oracle support costs. At Olitech, we are experts in Oracle support policies and practices and have completed hundreds of Oracle support optimization projects, which include negotiations, contract changes and optimizations that provide substantial cost savings to our clients.
Contact us to learn more about our Oracle Support Optimization services.
By Melissa Cortale
Melissa Cortale is founder and President of Olitech Solutions, LLC. Melissa has worked with Oracle licensing, both for Oracle and on the client side, for over 10 years where she has negotiated more than 300 transactions. Melissa has shared her Oracle expertise at multiple SAM conferences and has has taught IBSMA’s Practitioner’s Certificate in Oracle License Management (PCOLM) course across the US and abroad.