Oracle Third party Support

Cost Savings with Oracle Third-Party Support

Cost Savings with Oracle Third-Party Support

Cost Savings with Oracle Third-Party Support

Oracle’s software support fees have become a significant budget burden for many enterprises.

In response, CIOs and sourcing leaders are exploring Oracle’s third-party support as a cost-saving alternative.

This strategy can reduce annual maintenance costs by approximately half while maintaining support for mission-critical Oracle systems.

The key is understanding the benefits, trade-offs, and best practices to capture cost savings with Oracle third-party support without jeopardizing your IT roadmap.

Oracle Support Costs: The Rising Budget Drain

Annual support fees for Oracle software typically account for about 22% of the license value – and often increase by 3-5% each year.

Over time, organizations can end up paying far more in support than the original license cost, with limited incremental value to show for it.

Oracle’s support business has extremely high margins (estimated at ~90%), meaning customers are paying a premium.

In effect, many CIOs feel stuck paying for “insurance” on software that may be stable and require minimal vendor assistance.

Example: Consider a $5 million investment in Oracle licenses.

Oracle’s support would cost around $1.1 million per year (22%), and that cost rises annually.

Over five years, this one customer might spend well over $6 million on Oracle support alone.

Table: Sample Annual Maintenance Cost Comparison

Oracle License InvestmentAnnual Oracle Support (≈22%)Annual Third-Party Support (≈11%)Annual Savings (~50%)
$1 million~$220,000~$110,000~$110,000
$5 million~$1.1 million~$550,000~$550,000
$10 million~$2.2 million~$1.1 million~$1.1 million

As shown above, cost savings with Oracle third-party support can be substantial.

By switching to an independent support provider, enterprises typically save 50% or more on annual fees.

For a $5M license footprint, that’s over half a million dollars saved each year, which can be redirected to strategic projects.

How Third-Party Support Works

Third-party support for Oracle refers to maintenance and technical support provided by an independent firm, rather than Oracle itself. Companies like Rimini Street, Spinnaker Support, Support Revolution, and others specialize in Oracle (and SAP) support.

The third-party model parallels Oracle’s standard support in function – you get help desk service, bug fixes, and updates for tax/legal changes – but with notable differences:

  • Lower Cost: Third-party providers charge significantly less, often 50% of Oracle’s fee (or even lower). You pay the independent vendor a yearly fee, and you discontinue paying Oracle for support on those licenses.
  • No Oracle Involvement: These providers operate without Oracle’s backing. They do not have access to Oracle’s proprietary patches or source code. Instead, they develop their fixes and workarounds for bugs and security vulnerabilities, and support the software based on their expertise.
  • Extended Support Life: Oracle’s official support has deadlines (Premier Support, then Extended Support for a while, then Sustaining Support with no new fixes). A third-party support contract has no fixed end date for your software version – the vendor will support even older releases indefinitely. This means you can run a stable Oracle system for as long as it meets your needs, without being forced into upgrades just to stay supported.
  • Support Scope: Oracle’s support policy is often limited to vanilla environments – for example, Oracle won’t troubleshoot issues caused by custom modifications. Third-party support, by contrast, typically covers customizations and integrations. Their engineers will help with issues in your customized code, something Oracle’s support would typically refuse. The service from independent providers is often more personalized (direct access to experienced Oracle experts, tailored SLAs) than Oracle’s standard one-size-fits-all support model.

In practice, switching to third-party support is straightforward once contracts are lined up: you maintain your Oracle software licenses (perpetual licenses don’t expire), but you notify Oracle you’re not renewing their support.

The third-party firm then becomes your go-to for any issues or questions on those Oracle products.

It’s worth noting that thousands of organizations, including many Fortune 500 companies, have already made this move.

The third-party support industry for enterprise software has experienced rapid growth in recent years, legitimizing it as a mainstream option for cost-conscious IT leaders.

Key Benefits of Third-Party Support

For CIOs and vendor management teams, the appeal of third-party support goes beyond just cheaper pricing.

Key benefits include:

  • Significant Cost Savings: The primary driver is financial. Moving to an independent provider can cut support fees by 50% or more. Instead of paying Oracle’s ~22% of the license cost every year (plus escalations), companies can immediately reduce that to roughly 11% (or negotiate flat fees). Analyst research indicates that many enterprises achieve 50–70% savings in real terms by switching, which frees up millions of dollars over just a few years. Organizations have used these savings to fund digital transformation efforts, innovation projects, or simply to meet budget reduction targets. The magnitude of savings makes a compelling business case on its own.
  • Extended Life for Legacy Systems: Third-party support enables indefinite support for older software versions. Oracle typically pressures customers to upgrade by declaring older versions of its software out of support after a few years. (In one survey, 73% of Oracle customers said they upgraded primarily because Oracle’s support was ending – not for new features.) With third-party support, you can run a stable Oracle E-Business Suite or Database version for as long as it reliably serves the business, without forced upgrades. This is ideal for mature systems that don’t require new features; you avoid disruptive, costly upgrade projects. The third-party provider continues to deliver fixes and updates (e.g., tax/regulatory changes) even for outdated versions that Oracle no longer fully supports. Your team can decide when or if an upgrade is truly needed, on your timetable.
  • Better Service Quality and Flexibility: Many enterprises are frustrated with Oracle’s standard support experience – lengthy response times, tier-1 agents reading from scripts, and lack of proactive help. Third-party support firms differentiate themselves with a more responsive, high-touch service. Clients often have direct access to senior engineers who have a deep understanding of Oracle products. Support tickets aren’t bounced among departments; a dedicated expert works on the issue until it is resolved. Service Level Agreements are often more customer-centric (e.g., 24/7 support, faster response commitments tailored to your needs). This personalized approach can lead to faster issue resolution and higher satisfaction among your IT staff. In essence, you’re treated as a valued client, not just one of thousands of accounts.
  • Support for Customizations: If your Oracle environment is highly customized (as is common with ERP and other enterprise software), Oracle’s support will not fix custom code or performance issues caused by modifications. Third-party providers, however, do support custom code. They will help troubleshoot and even write patches or scripts to fix problems in your customizations. This all-inclusive support is a major benefit – it covers the entire environment (standard Oracle software plus any custom extensions). Your team won’t be caught in a stalemate where Oracle says, “That issue is caused by custom code, we can’t help.” Instead, the third-party support team works on a solution regardless of whether the issue stems from standard software or your unique tweaks. This can be a lifesaver for heavily customized Oracle deployments.

Risks and Trade-Offs to Consider

Switching to third-party support involves important considerations and downsides that must be carefully managed.

CIOs should weigh these trade-offs against the benefits:

  • Oracle’s Pushback and Contractual Restrictions: Oracle is not pleased to lose support revenue and often attempts to discourage customers from leaving. Be prepared for some FUD (fear, uncertainty, and doubt) from Oracle reps if you consider third-party support. Tactics can include warning of compliance audits or implying your systems will be at risk. One contractual hurdle is Oracle’s “matching service levels” policy – you generally cannot drop support on just a subset of licenses in a product family. For example, if you have 100 Database licenses under one agreement, Oracle may require all 100 to remain on Oracle support (or none of them). This policy forces an all-or-nothing choice for each product line. To avoid breaches, most customers moving to third-party support take a clean break from a given Oracle product. Additionally, while leaving Oracle support is not a breach of license, you must ensure that you’re fully compliant with the usage terms (more on this below). Oracle may also try to entice you to stay with discounts or bundle deals (e.g., cloud credits), so it’s essential to have a clear understanding of your options and rights.
  • No New Oracle Patches or Upgrades: When you opt for third-party support, you forgo Oracle’s official updates and new releases. You will not have access to Oracle’s quarterly Critical Patch Updates or any new software versions/features that Oracle releases for your products. Third-party providers do issue their own bug fixes and security workarounds, but they cannot deliver new Oracle versions or features. In practice, this means you are committing to staying on your current software version for a while. This trade-off is usually acceptable if your system is stable and meets business needs. However, if down the road you decide to upgrade to a new Oracle version, you would need to re-subscribe to Oracle support (often at a hefty cost, including back support fees) or perform the upgrade without Oracle’s direct help. Essentially, innovation from Oracle will not reach you during the period you’re off Oracle support. Ensure that the lack of new updates won’t hamper your business – if you anticipate needing new Oracle features soon, sticking with Oracle support might be wiser for now.
  • Security and Compliance Concerns: A common question is how to maintain system security without Oracle’s security patches. Third-party support firms have developed alternatives, such as “virtual patching” and proactive security monitoring. Instead of applying Oracle’s code patches, they analyze vulnerabilities and provide remediation steps (configuration changes, custom scripts, firewall rules, etc.) to block exploits. Many also provide regulatory updates (such as tax/legal changes) as part of their service. To date, there haven’t been news of major security breaches due to using third-party support – even highly regulated clients (banks, government agencies) have operated safely without Oracle’s direct patches. That said, you will need to trust the security expertise of your provider. It’s smart to vet third-party vendors for strong security credentials (e.g., ISO 27001 certification, a proven track record) and consider implementing additional safeguards (such as tighter network controls or independent vulnerability assessments). With diligence, companies can maintain a robust security posture with Oracle support, but it does require careful attention.
  • License Compliance and Legal Considerations: Importantly, using third-party support is legal for Oracle licensees – courts have upheld customers’ rights to seek support from a provider of their choice. Oracle cannot void your licenses simply because you switch to a different support provider. However, you must remain in compliance with your license agreements. Before ending Oracle support, it’s crucial to review your contracts and usage. Ensure you’re not using any Oracle software beyond what you’ve licensed (no extra user counts, processors, or unauthorized components). It’s wise to conduct an internal license audit or work with a licensing specialist to proactively address any compliance gaps. Also, download and archive any Oracle support materials you’re entitled to (patches, documentation). At the same time, you will still have access – you may need these archives later, as your Oracle Support portal access will expire. Oracle reserves the right to audit your compliance with license terms (regardless of support status). Therefore, please maintain documentation of your entitlements and deployments. If you transition correctly and respect Oracle’s IP (for example, third-party providers must not illegally use Oracle’s code), there is no violation in using independent support. Just make sure all your ducks are in a row on the licensing front to avoid any disputes.

When to Consider Third-Party Support

Third-party support can deliver significant cost savings and other benefits, but it isn’t the right choice for every situation.

Based on industry experience, here are scenarios where third-party support makes the most sense – and cases where it may not be advisable:

  • Best Fit Use Cases: Organizations with stable, mature Oracle environments are prime candidates. If your Oracle applications (ERP, databases, etc.) are running smoothly on an older release and meet your business needs, third-party support lets you keep them “as is” longer while saving money. This is common in industries or workloads where functionality has plateaued and reliability/cost are bigger priorities than new features. Companies that have completed major Oracle implementations and are now mainly in maintenance mode often find this option attractive. Additionally, suppose you’re facing an Oracle support contract renewal that is very costly and you don’t anticipate needing Oracle’s direct assistance (no major upgrades are planned). In that case, it’s a good time to consider alternatives. Another ideal scenario is if your Oracle products are nearing the end of their life cycle in Oracle’s support roadmap (or are already in Sustaining Support). Rather than being forced into an expensive upgrade just to stay supported, you can move to third-party support and continue running the old version safely for years. In short, if you don’t need Oracle’s ongoing innovations and your focus is on maximizing ROI on the existing system, third-party support is worth considering.
  • When It’s Not Advisable: If your organization relies on cutting-edge Oracle technology or requires frequent upgrades, adhering to Oracle’s support might be necessary. For example, suppose you plan to migrate to Oracle’s cloud services or implement the latest version of Oracle Database shortly. In that case, you’ll want Oracle’s official support and guidance through that process. Third-party support could also be problematic if you heavily depend on Oracle’s product roadmap – for instance, if you’re eagerly awaiting a new module or critical patch from Oracle for regulatory reasons. Companies in the middle of a major Oracle project (like a global ERP upgrade or a new Oracle Cloud rollout) should typically remain with Oracle support at least until that project is done. Additionally, some Oracle offerings cannot be supported by third parties – notably Oracle’s SaaS cloud applications (since those are only delivered via Oracle’s cloud and always include Oracle-managed support). And if a system requires constant vendor updates for compliance (e.g., a payment processing module with monthly updates), ensure a third-party can provide those timely updates before you switch. In summary, if your environment is highly dynamic, on the leading edge of Oracle’s updates, or closely tied to Oracle’s future developments, the cost savings from Oracle third-party support may
    not outweigh the loss of direct vendor backing. It’s often said that third-party support is ideal for “keep-the-lights-on” systems that are stable, whereas fast-evolving, strategic systems may still warrant Oracle’s involvement.

Industry Trends and Outlook

Third-party support for enterprise software has evolved from a fringe idea into a mainstream strategy for optimizing IT costs.

Analysts note that interest in independent support has surged: Gartner, for instance, reported double-digit growth in client inquiries about third-party support year over year.

The market for third-party support services (covering Oracle, SAP, and other megavendors) has been rapidly expanding – projected to exceed $1 billion in annual revenue by mid-2020s as more customers make the switch.

This growing adoption is also reflected in the profile of companies choosing third-party support.

It’s no longer limited to small shops or those in dire cost-cutting mode; a substantial number of Fortune 500 and Global 2000 enterprises have transitioned at least some of their Oracle or SAP systems to third-party providers.

Success stories across industries (manufacturing, retail, government, etc.) show that with proper due diligence, organizations can save tens of millions over a few years and still meet their service requirements.

Oracle itself has acknowledged the trend (albeit reluctantly) by tightening some policies and continuing its legal battles with leading third-party vendors.

Yet these services remain legally permissible and increasingly popular, especially as Oracle shifts focus to cloud offerings – leaving some on-premise customers feeling underserved.

For CIOs and sourcing leaders, the key takeaway is that Oracle’s third-party support is now a credible and proven option.

It should be evaluated alongside the status quo of staying with Oracle, as part of any comprehensive IT cost optimization or vendor management strategy.

Looking ahead, we anticipate that independent support options will continue to grow.

As long as enterprise software vendors maintain high support fees and push aggressive upgrade cycles, there will be demand for alternatives that put customers back in control.

Early adopters have demonstrated that cost savings with Oracle third-party support are real, and that the model can work even for large, complex IT environments.

The choice ultimately hinges on your organization’s technology roadmap and risk tolerance – but it’s a choice that more and more enterprises are empowered to make in pursuit of efficiency.

Recommendations (Practical Tips for CIOs)

To maximize the benefits and minimize risks, consider these expert tips when exploring third-party support for Oracle:

  1. Identify Suitable Systems: Review your Oracle portfolio and pinpoint systems that are stable and not slated for immediate upgrades. These are prime candidates for third-party support (e.g., an ERP that won’t change for five years or more).
  2. Quantify the Savings: Calculate your annual Oracle support spend and estimate the 50% reduction. Build a multi-year cost model to show how much could be saved over, say, five years. This strengthens the business case.
  3. Reinvest the Budget: Plan what you will do with the freed funds. Tie the savings to strategic initiatives (cloud projects, new analytics, headcount in innovation teams). This turns cost-cutting into business enablement.
  4. Thorough Contract Review: Carefully review your Oracle license agreements before making a decision. Ensure you understand the “matching service levels” clause and any restrictions. Engage licensing experts if necessary to navigate the terms without breaching them.
  5. Ensure License Compliance: Conduct an internal audit to confirm you’re fully compliant with Oracle’s usage rules. Resolve any gray areas (for example, uninstall any unused software and rectify any excess usage) so you leave Oracle support with a clean compliance record.
  6. Timing Is Key: Align the switch with your support renewal cycle. Most companies plan the move to coincide with the end of an Oracle support period, thereby avoiding overlap or wasted fees. Also, download all necessary Oracle patches and documentation while you still have access.
  7. Evaluate Providers Rigorously: Treat the selection of a third-party support provider as you would any critical vendor decision. Look at their track record, client references, support offerings, security certifications, and expertise with your specific Oracle products. Consider running a pilot or starting with a non-production environment if possible.
  8. Plan the Transition: Collaborate with the chosen provider to develop a transition plan. This may include knowledge transfer, setting up support processes, and communicating to your internal teams on how to engage the new support. A smooth handover from Oracle to the third party will prevent any support gaps.
  9. Maintain a Relationship with Oracle: Even if you leave Oracle’s support, keep open communication with Oracle sales/account reps about your licenses and future needs. You may still purchase new Oracle products or cloud services at a later time. A diplomatic approach can be helpful if you ever need to re-enter Oracle support (e.g., for an upgrade) in the future.
  10. Monitor and Measure: After switching, closely monitor the quality of the support service and your system’s performance. Track metrics like response times and issue resolution effectiveness. Ensure the third-party provider meets SLAs and that your team is satisfied. Periodically report the realized savings and benefits to executives to validate the decision.

Checklist: 5 Actions to Take

  1. Inventory Your Oracle Environment: List all Oracle products, versions, and support costs. Note which systems are mission-critical and their corresponding plans (e.g., whether an upgrade is needed or the system is stable).
  2. Assess Fit for Third-Party Support: For each system, evaluate if it can run for several years without Oracle updates. Prioritize stable candidates, with no urgent need for new features.
  3. Analyze Contracts & Compliance: Gather Oracle license agreements and have them reviewed for any constraints (like full license set support requirements). Audit your usage against entitlements and resolve any compliance issues proactively.
  4. Engage and Compare Providers: Reach out to leading third-party support vendors to gather information and obtain quotes. Compare their services, security approach, and costs. Check references or case studies in your industry.
  5. Develop Transition Plan: If moving forward, schedule the switch around your support renewal date. Coordinate internally to inform stakeholders, and work with the third-party provider to onboard their support team. Download the necessary Oracle resources, then let Oracle’s support lapse and begin the new service.

By following this checklist, you can methodically evaluate and implement third-party support while safeguarding your enterprise’s interests.

Download Procurement Advisory Playbook: Transitioning from Oracle Support to Third‑Party Support.

💸 Realize Tangible Financial Benefits Beyond Just Cost Savings

  • Save 50%+ annually on Oracle support fees — and avoid costly forced upgrades.
  • Extend the life of stable systems without paying for software you don’t need.
  • Understand the total cost reduction: license optimization + deferred hardware/software spend.
  • Learn how third-party support frees up budget for innovation, not just maintenance.

FAQs

Q1: Is using a third-party support provider for Oracle software legal and allowed?
A: Yes. If you have a valid Oracle license, you are entitled to obtain support from any provider or internally. Independent support is legal as long as you stay within your license rights (e.g., you don’t illegally share Oracle’s intellectual property). Major court cases have affirmed the legality of third-party support. Oracle cannot cancel your licenses for leaving their support, but you must remain compliant with your license agreement.

Q2: What support will I miss out on if we leave Oracle’s official support?
A: The main thing you give up is access to Oracle’s new patches, updates, and version upgrades. You won’t receive Oracle’s quarterly security patches or any new feature releases. In essence, your software will remain on its current version. However, third-party providers will deliver fixes for bugs and security vulnerabilities (through their methods) and provide tax and regulatory updates. You will still receive operational support (help desk, troubleshooting), but Oracle will not provide it. If a future upgrade is needed, you will likely have to renew Oracle support or manage the upgrade with external assistance.

Q3: How do third-party providers handle security without Oracle’s patches?
A: Third-party support firms have their own security practices to keep clients safe. They analyze Oracle’s security bulletins and develop alternative solutions such as configuration changes, virtual patches (blocking attack vectors), or custom code fixes. They often monitor threat intelligence and advise customers on how to harden their systems. Many providers also offer additional security tools or services. While this approach can effectively protect your systems, it’s important to vet the provider’s security expertise. Ensure they have a robust process for addressing new vulnerabilities and a proven track record with existing clients.

Q4: What if we need to upgrade or go back to Oracle in the future?
A: You retain the flexibility to return to Oracle’s support or upgrade later, but it requires planning. Oracle typically will require you to pay back support fees for the lapse period (or purchase new licenses) if you want to resume Oracle support for a product. It can be costly, so be sure to factor this into your budget. Some companies opt to utilize third-party support for a defined period (typically 3-5 years) to save money, and then allocate a portion of the savings to fund a modern replacement or a re-licensing when an upgrade is truly necessary. Suppose you plan to eventually move to Oracle’s cloud or a major new version; coordinate your timing. In that case, you may need to rejoin Oracle support shortly before the migration to ensure a smoother transition.

Q5: How does third-party support affect Oracle license audits or our relationship with Oracle?
A: Choosing independent support shouldn’t, in itself, trigger an Oracle license audit – audits are supposed to be about compliance, not whether you use Oracle’s support. However, Oracle sales teams sometimes use audits as a tactic if a customer ends support, so be prepared by ensuring you’re compliant (as mentioned earlier). As for the ongoing relationship, you may lose some access to Oracle’s support portal, and account reps might be less attentive once you’re not a support customer. But you can still buy new Oracle products or services in the future; leaving support on certain products doesn’t blacklist you as a customer. It’s wise to maintain a cordial relationship with Oracle’s account management. Many companies continue to do business with Oracle in other areas (hardware, cloud, etc.) while using third-party support for legacy software. Oracle may try to win back your support business over time, so keeping communication open could even present opportunities (such as Oracle offering incentives to return). The key is to approach the move professionally and ensure all license obligations are met, so your vendor relationship remains as positive as possible.

Read more about our Third Party Transition Service.

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  • Fredrik Filipsson

    Fredrik Filipsson is the co-founder of Redress Compliance, a leading independent advisory firm specializing in Oracle, Microsoft, SAP, IBM, and Salesforce licensing. With over 20 years of experience in software licensing and contract negotiations, Fredrik has helped hundreds of organizations—including numerous Fortune 500 companies—optimize costs, avoid compliance risks, and secure favorable terms with major software vendors. Fredrik built his expertise over two decades working directly for IBM, SAP, and Oracle, where he gained in-depth knowledge of their licensing programs and sales practices. For the past 11 years, he has worked as a consultant, advising global enterprises on complex licensing challenges and large-scale contract negotiations.

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