Pool of funds

Oracle Pool of Funds Negotiation – How to Succeed

Introduction to Oracle Pool of Funds Negotiation

In the complex world of Oracle licensing, the Oracle Pool of Funds (PoF) agreement is a unique offering that provides customers flexibility and potential cost savings.

However, effective negotiation is crucial to maximizing the benefits of an Oracle PoF agreement. This article provides an in-depth guide to understanding and negotiating Oracle PoF agreements.

What is an Oracle Pool of Funds Agreement?

An Oracle Pool of Funds agreement is a flexible licensing arrangement where a customer pre-pays significant money to Oracle. This pre-paid amount forms a ‘pool of funds that the customer can use over a specified period to purchase various Oracle products as and when needed.

This arrangement allows the customer to adapt their Oracle software usage to their changing needs without having to negotiate and purchase new licenses each time.

How Much Does an Oracle Pool of Funds Cost?

The cost of an Oracle PoF agreement can vary significantly depending on the customer’s needs and negotiation skills.

An Oracle PoF agreement typically starts from $1 million and can go as high as $50 million. The exact amount is determined through negotiation between the customer and Oracle, considering factors such as the customer’s anticipated software needs, budget, and negotiation strategy.

What Discounts Can Be Negotiated in a Pool of Funds Agreement?

The discount for an Oracle PoF agreement is mainly determined by the number of funds you put into the initial license agreement. Discounts can range from 75% to 95%.

The higher the initial amount, the higher the potential discount. However, achieving these high discounts requires effective negotiation and a strong understanding of Oracle’s pricing and discounting practices.

What Can Be Negotiated in the Pool of Funds Agreement?

In an Oracle PoF agreement, several aspects can be negotiated:

  • Products to Include: You can negotiate which Oracle products to include in the PoF agreement. This can include any technology, middleware, and application products.
  • Reporting Requirements: The reporting requirements for the PoF agreement can also be negotiated. This can influence how and when to report your Oracle software usage to Oracle.
  • Customer Definition: The definition of the ‘customer’ in the PoF agreement can be negotiated. This will define which legal entities can use the Oracle software under the contract.
  • Territory Usage: The territories you can deploy Oracle software under the PoF agreement can be negotiated.
  • Technical Support: The level and cost of technical support included in the PoF agreement can be negotiated.

Keys to Negotiate PoF Agreements

Negotiating an Oracle PoF agreement can be challenging, but there are several keys to achieving a successful negotiation:

  • Competitive Pressure: Avoid letting Oracle know you only choose Oracle as a vendor. To achieve 85-95% discounts, you must make Oracle believe you have a competitive offer from another vendor. This competitive pressure can motivate Oracle to offer higher discounts.
  • Understand Your Needs: Clearly understand your current and anticipated Oracle software needs. This will help you negotiate a PoF agreement that aligns with your needs and provides the best value.
  • Seek Expert Advice: Consider seeking advice from an Oracle licensing expert or a legal advisor experienced in software licensing. They can provide valuable insights, clarify ambiguities, and protect your interests during the negotiation.

In conclusion, an Oracle Pool of Funds agreement can provide significant benefits, but achieving these benefits requires effective negotiation.

By understanding the key aspects of Oracle PoF agreements and applying effective negotiation strategies, you can maximize the value of your Oracle PoF agreement.

Author

  • Fredrik Filipsson

    Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, enhancing organizational efficiency.