Case Study – Oracle Support Optimization: Costco Wholesale Saves $4.2M by Terminating Unused Oracle Licenses
Background
Costco Wholesale, a Fortune 25 retailer with over 850 warehouse locations and more than 300,000 employees worldwide, operates one of the most sophisticated logistics and retail systems in the industry.
With a global footprint and high transaction volumes, the company relies heavily on Oracle technologies—including Oracle Database, Middleware, and E-Business Suite—to run critical finance, supply chain, and member services systems.
Over the years, Costco’s Oracle environment had grown organically through acquisitions, project expansions, and long-term ULA-style agreements.
As a result, its annual Oracle spend exceeded $20 million, much of it locked in through rigid support structures on licenses that no longer delivered proportional value.
Costco’s IT leadership engaged Redress Compliance to help identify opportunities to optimize licensing and reduce Oracle support costs.
The result: a well-governed strategy that enabled the termination of unused licenses, saving $1.4 million per year—or $4.2 million over three years—with no risk to compliance or operations.
Read how you can reduce Oracle support costs.
Challenges
Despite a strong internal IT and sourcing team, Costco faced several Oracle-specific cost and complexity challenges:
- Inflated License Inventory: Due to legacy ULAs and bulk purchases, Costco retained far more Oracle licenses than it used—yet Oracle charged full support on all licenses.
- Rigid Support Contracts: Oracle’s “no givebacks” policy prevented Costco from reducing support fees unless the licenses were completely terminated—a move that required careful entitlement and deployment analysis.
- Lack of Visibility: With dozens of business units and thousands of Oracle deployments globally, there was no clear picture of which licenses were active, idle, or obsolete.
- Pressure from Oracle: Rather than offering flexibility, Oracle encouraged cloud commitments that would increase lock-in, rather than reduce the total cost of ownership.
- Risk Concerns: Internal stakeholders were cautious. If support was reduced or licenses were terminated incorrectly, it could invite audit pressure or impact system stability.
Costco needed a measured, defensible support optimization strategy—not a quick fix or a forced cloud migration.
How Redress Compliance Helped
Redress Compliance delivered a multi-step Oracle cost reduction engagement, focused on license optimization and support termination.
1. License Assessment & Usage Validation
Redress began by performing a comprehensive Oracle license assessment across Costco’s global footprint. This included:
- Reviewing all Oracle technology entitlements and support contracts
- Mapping deployments of Oracle Database, WebLogic, and other components
- Identifying inactive or redundant environments still driving support fees
- Validating how many licenses were truly required vs. contractually entitled
We identified that over $1.4 million in annual support fees were tied to unused or decommissioned licenses that were still being billed.
2. Optimization and Termination Strategy
Using our findings, Redress developed a detailed license optimization report with a clean, auditable path to termination. We:
- Separated licenses are required for ongoing operations from those that could be safely surrendered
- Reviewed contract terms to ensure the licenses could be legally terminated without residual obligation
- Outlined a risk-free communication and documentation process to Oracle
- Created a compliance governance playbook to avoid any future disputes
The key insight: Costco could retain perpetual rights to all active Oracle deployments while removing over-licensed components from the support stream.
3. Internal Workshops and Risk Alignment
Redress hosted stakeholder workshops with Costco’s IT, procurement, and legal teams to:
- Educate them on Oracle’s licensing and support structure
- Review cost-saving scenarios in detail
- Address questions about future audits, entitlements, and operational risk
This internal alignment was crucial to ensure a seamless execution without compromising internal risk controls or financial reporting.
4. License Termination Execution
With stakeholder buy-in, Redress guided the formal termination of unneeded Oracle licenses and the removal of those items from active support. We:
- Drafted Oracle-facing communications
- Documented entitlements and retained rights
- Helped configure internal monitoring to ensure compliance and prevent inadvertent re-use of terminated licenses
Oracle accepted the license termination without challenge.
Outcome and Impact
Costco achieved measurable savings and long-term strategic control:
- $1.4 million in annual savings, totaling $4.2 million over 3 years
- Eliminated waste, aligning Oracle spend with actual usage
- No compliance risk, with all actions backed by contractual analysis and license governance
- Improved internal visibility, enabling better future planning and budgeting
- Avoided new Oracle commitments, maintaining full flexibility over future infrastructure decisions
Redress Compliance helped Costco turn Oracle complexity into savings—without sacrificing stability or compliance.
Client Quote
“We’ve worked hard to control IT costs, but Oracle was a blind spot. Redress Compliance brought the clarity and expertise we needed. They helped us safely remove unused licenses and cut our Oracle spend by over $4 million—all without disruption. Their licensing knowledge and commercial insight were game changers.”
— Global Director of IT Procurement, Costco Wholesale
Call-to-Action
Still paying for Oracle licenses you don’t use? Redress Compliance helps companies like Costco reduce Oracle spend through licensing optimization and structured support termination.
Book your Oracle support optimization review today.
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