Considering Third-Party Support at Renewal

Considering Third-Party Support at Renewal

CIOs evaluating Oracle renewal support options often consider third-party support to reduce costs. Third-party support can offer major savings on Oracle support renewals, but it also introduces certain risks.

Third-party support providers like Rimini Street (and competitors such as Spinnaker Support) have emerged as alternatives to Oracle’s own support model, giving you more options at renewal time.

This guide, written from a former Oracle licensing strategist’s perspective, explains how to assess the third-party support option and leverage it to strengthen your leverage in Oracle renewal negotiations.

If executed correctly, an Oracle third-party support renewal can dramatically reduce costs – but it must fit your long-term strategy.

For more insights, read our ultimate guide, Oracle Contract Renewal Management.

Step 1 – Understanding What Third-Party Support Provides

Third-party support vendors provide break-fix maintenance for your current software versions, covering customizations and regulatory updates at a lower cost.

For example, if you have customized your Oracle software, a third-party provider will support your custom code — something Oracle’s support usually does not cover.

These providers also handle crucial updates (like tax and regulatory patches) to keep your systems compliant with changing laws.

Checklist:

• ✔ Support for existing versions.
• ✔ Break-fix assistance.
• ✔ Tax and regulatory updates.
• ✔ Customization support.
• ✔ Lower annual cost.

Table: Third-Party Capabilities

Insight: Third-party support covers most needs for stable environments.

Step 2 – Comparing Third-Party Support Cost to Oracle Support

Switching to third-party support can slash annual fees by over 50%. Unlike Oracle (which raises support prices by ~8% each year), third-party fees remain flat year after year. Oracle charges ~22% of the license price for support, and often increases it yearly.

Third-party providers charge about half that amount and keep their fees flat, making budgeting easier.

Checklist:

• ✔ Annual savings can exceed 50 percent.
• ✔ No annual uplift.
• ✔ Discounts apply differently.
• ✔ Support structure is simpler.
• ✔ Cost forecasting improves.

Table: Cost Comparison

Insight: Cost stability appeals to finance leadership.

Step 3 – Evaluating Risks of Leaving Oracle Support

You give up Oracle’s patches, upgrade rights, and direct support when leaving. If you later return to Oracle support, you’ll likely pay backdated fees and penalties.

For security, it’s wise to apply all final Oracle patches available before your support ends, since you won’t get new ones afterward. You should also plan how to handle any critical bugs or vulnerabilities that emerge later without Oracle’s assistance.

Checklist:

• ✔ No access to patches.
• ✔ No upgrade rights.
• ✔ No Oracle escalations.
• ✔ Contract return rules apply.
• ✔ Compliance considerations remain.

Table: Risk Areas

Insight: Risk depends on the environment, age, and roadmap.

Read our preparation article, Preparing for Oracle Contract Renewals.

Step 4 – Identifying Environments Suitable for Third-Party Support

Third-party support works best for stable, older systems with minimal changes and no immediate need for upgrades. For example, an older ERP system that’s been running reliably for years with few changes is an ideal candidate for third-party support.

If you plan to keep using that system without major upgrades for the long term, independent support can maintain it cost-effectively.

Checklist:

• ✔ Stable workloads.
• ✔ Older versions.
• ✔ Minimal customization changes.
• ✔ Long-term support needs.
• ✔ Limited upgrade plans.

Table: Suitable Scenarios

Insight: The best candidates rarely change workloads.

Step 5 – Using Third-Party Support as Negotiation Leverage

Considering a third-party support alternative can strengthen your position in Oracle contract negotiations, even if you ultimately remain with Oracle. Oracle’s account reps are highly motivated to keep your support dollars. Simply showing that you have a third-party support quote can prompt Oracle to propose better discounts or contract terms to persuade you to stay.

Checklist:

• ✔ Present cost comparisons.
• ✔ Highlight long-term savings.
• ✔ Share roadmap alternatives.
• ✔ Maintain credible tone.
• ✔ Avoid aggressive threats.

Table: Leverage Tactics

Insight: Oracle reacts strongly when support revenue is threatened.

Step 6 – Timing Considerations for Switching Support Providers

You need to plan if switching support providers. Starting the evaluation early ensures you have enough time and leverage. Be aware of your support renewal date and the cancellation notice period. (Oracle typically requires 30–90 days’ notice if you plan to cancel support.)

Ideally, begin evaluating alternatives at least six months before renewal. This timeline gives you room to secure internal approvals and negotiate with Oracle without rushing.

Checklist:

• ✔ Evaluate switch six months early.
• ✔ Validate contract expiration.
• ✔ Review true-up dates.
• ✔ Prepare internal approvals.
• ✔ Compare final quotes.

Table: Timing Milestones

Insight: Late evaluations weaken negotiation leverage.

More on negotiating, Negotiating Oracle Support Renewals: Strategies for CIOs to Cut Costs.

Step 7 – Addressing Compliance and Licensing Concerns

Leaving Oracle support doesn’t remove your license obligations – you must stay diligent about usage and entitlements. Oracle can still audit your company even if you’re off support.

Some organizations worry that audit risk increases once you’re no longer a paying support customer. It’s crucial to manage compliance proactively: keep accurate records of your entitlements and usage, and conduct internal audits to avoid surprises.

If you ever need to rejoin Oracle support, be prepared for backdated fees and penalties for the lapsed period.

Checklist:

• ✔ Validate entitlements.
• ✔ Track usage.
• ✔ Ensure internal audits.
• ✔ Understand Oracle return rules.
• ✔ Maintain documentation.

Table: Compliance Areas

Insight: Leaving Oracle support does not remove compliance obligations.

Step 8 – Communicating the Option Internally

Getting internal buy-in early is crucial. Leadership and stakeholders should clearly understand the cost benefits, risks, and alternatives of third-party support. Introduce the idea of third-party support to your executive team well before the renewal decision.

For example, get your CFO on board by highlighting the cost savings, and ensure your IT team understands how operations will be handled under a new support model.

By openly discussing both the benefits and the risks, you’ll create a balanced view that leadership can support.

Checklist:

• ✔ Engage leadership early.
• ✔ Explain cost savings.
• ✔ Explain risks.
• ✔ Explain alternatives.
• ✔ Provide neutral analysis.

Table: Communication Roles

Insight: Internal alignment is necessary for credible negotiation.

Step 9 – Communicating the Option to Oracle

Be measured and factual when discussing third-party support with Oracle. A calm, data-driven approach keeps the conversation productive. Keep the tone professional and avoid making ultimatums or threats.

You can mention that you’ve explored a third-party quote and found significant savings, but frame it as due diligence rather than a confrontation. Provide just enough detail (like the percentage difference in cost) to make Oracle take it seriously, without giving away too much of your plan.

Checklist:

• ✔ Present evaluation calmly.
• ✔ Share high-level comparisons.
• ✔ Avoid threats.
• ✔ Request improved terms.
• ✔ Highlight readiness to decide.

Table: Messaging Principles

Insight: Oracle responds best to informed and measured messaging.

Step 10 – Making a Final Decision on Support Provider

Decide based on long-term strategy and risk tolerance, not just cost. Weigh your roadmap, budget, and system stability to choose the best support fit. For your final decision, consider all the factors holistically.

Some companies start by moving a smaller, less critical system to third-party support as a trial before committing larger mission-critical systems. In any case, ensure your choice aligns with your future IT roadmap and business priorities.

Checklist:

• ✔ Assess long-term roadmap.
• ✔ Assess risk tolerance.
• ✔ Confirm budget needs.
• ✔ Review workload stability.
• ✔ Choose the best fit.

Table: Decision Inputs

Insight: Switching support is strategic, not tactical.

5 Expert Takeaways

• Third-party support can significantly reduce support costs.
• Risks depend on workload stability.
• Oracle reacts strongly to credible alternatives.
• Preparation begins months before renewal.
• Calm, informed communication strengthens negotiation outcomes.

Read about our Oracle Contract Negotiation Service.

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