By Evan Boyd
While the economic outlook has brightened a bit in recent months, a mild recession remains a possibility for 2024 and many companies continue looking for expense reductions in 2023.
If you have contracts with Oracle, you may not think this is a place you can turn for savings. Afterall, the tech giant is masterful at making its customers feel powerless. Whether you’re contending with contract changes, renewals, or an audit process, leverage with Oracle always seems to be in short supply. Yet real money is at stake for your company.
Third-party support can be an excellent opportunity to save your company money, but Oracle practically funds its existence with support fees, and its contracts are written to all but ensure you require Oracle’s support in perpetuity.
While Oracle would have you believe there’s no path to a third-party provider, it’s simply not true. Thousands of organizations have already made this change. The biggest challenge is often timing: Many support contract renewals are set for May 31, the end of Oracle’s fiscal year. This means now is the time to fully understand your contractual and operational situation, and to prepare for the move to third-party support.
Five things to know if you’re considering third-party support
Know your contract, usage, and rights. Before you utter a word to your rep, know your agreements forward and backward – Oracle certainly does. If you’re trying to move toward a third-party relationship, read the contract, know your rights and ensure your organization is compliant. Otherwise, your good intentions could further trap you in your current circumstances. Oracle will instruct you on issues not represented in your contract and even give you misleading information about what’s allowed. Never take Oracle’s word for it.
Different contract end dates aren’t showstoppers. If you have multiple Oracle contracts with various end dates and a product you want to dump, that product may be tangled up in more than one agreement. Your Oracle rep would have you believe that, for this reason, you can’t drop anything. That isn’t true, but you need to know how to navigate the contracts.
Matching service level agreements can be confusing. A “license set” means all products related to each other via code base (e.g., Oracle Database), and “matching service levels” refers to Oracle’s policy that prohibits the canceling of support of a subset of products from within a license set. So if you want to leave support for some versions of Oracle Database but not others, you will violate the contract. This can get complicated, so you must understand what products are on what contracts. Oracle will use this to insist you can’t move to third-party support, however, you can negotiate with them or move everything to third-party support and avoid these technicalities.
Pay for what you use, not what you own. When you’re getting support from Oracle, you pay support for everything within a support contract. It doesn’t matter what you use or don’t. If you prefer to pay for coverage on what you use rather than all the Oracle products you own, then moving to third-party support makes sense.
Don’t fear the audit. Many companies considering third-party support freeze up in fear of a possible audit, where penalties often range into the millions. Regardless of what your Oracle rep may say, this is not an audit situation. Audits generally arise when your rep suspects there’s reason for an audit that will bring them significant revenue. Always have a license assessment done to know your true license position based on how Oracle would audit.
Next steps
If you have any questions about contract rights or building your business case, contact our experts for a no-obligation consultation. We can advise you on whether third-party support is the right fit for you and how to move forward confidently.
