Oracle Support Renewal – Optimization and lower costs in 2023

Navigating the complexities of Oracle support renewal can often be challenging for organizations that own Oracle software licenses.

It’s a thorn in the side of many, but with the right knowledge and strategy, it’s possible to reduce Oracle support costs significantly.

This guide sheds light on the secrets of achieving this reduction.

What You Will Learn:

1. Understanding Oracle Support Policies
   • The first step towards reducing Oracle support costs is understanding the different support policies. This knowledge forms the foundation of your cost reduction strategy.
2. Exploring Available Options
   • There are several options available for reducing Oracle support costs. The best fit for your company depends on your specific situation.
3. Professional Assistance
   • If you need help, we offer a service where we investigate all the options and work with you to create a strategy for reducing support costs.
4. Significant Cost Reduction
   • On average, we have reduced support fees by 30% for our clients.

This guide aims to clearly and concisely understand Oracle support renewal and how to reduce these costs effectively.

With the right approach, you can turn this thorny issue into a manageable aspect of your organization’s operations.

Oracle support renewal costs can be challenging to reduce. Oracle has several contractual policies that you need to understand in order to build your strategy fully. We used to work for Oracle for decades, and we learned all the “glitches” in Oracle’s internal systems. We are now using this knowledge and experience to help organizations to reduce their Oracle spend.

This article will provide practical advice on how to build your roadmap for reducing your Oracle support renewal; if you need our help, contact us.

Oracle Support Renewal Optimization

Oracle support renewal optimization is crucial to managing your Oracle ecosystem effectively. To achieve this, you must familiarize yourself with Oracle contracts and policies, which dictate the terms and conditions for terminating support fees.

Once you have a comprehensive understanding of these policies, you can devise a strategy to reduce Oracle support fees, ultimately leading to more efficient management of your Oracle investments.

What is Oracle CSI?

Oracle CSI is an identification number assigned to each license purchase (license agreement). The CSI number is used by Oracle Support to identify the user and troubleshoot technical issues.

It is also a license agreement identifier for your purchased licenses; you can explain it as license proof. Large Oracle customers can have hundreds of different CSIs for each Oracle contract.

What are Oracle matching service levels?

Oracle Matching Service Levels is a technical support policy. Oracle wants you to buy the same service level for all of your licenses within a license set. Oracle wants to prevent customers from having one license agreement under the support and another without support.

For example, you may have 100 different database license agreements, and Oracle wants to ensure you keep them all under support. Oracle then wrote a support policy stating you need to have it all under support or nothing. “all or nothing policy.”

You’ve likely heard of Oracle sales reps claiming you can’t terminate support for one contract, but that’s not true. These salespeople are misinformed. Oracle’s matching service levels policy only applies to products in the same family.

Hence, it’s impossible to terminate support for just one product. This is a common tactic Oracle uses to lock customers into expensive support contracts. This rule also applies to Java SE subscriptions; you need to maintain this technical support policy across all Oracle products, databases, WebLogic, and Oracle apps such as Siebel, Primavera, and EBS.

What is Oracle repricing?

Oracle repricing is the process where Oracle will re-calculate support for the products that remain on a CSI after you have made a partial termination. The process is described in Oracle support policies. The price of annual support is 22 percent of the net license fee and is discounted based on volume.

For example, you negotiate a 50% discount on your license purchase, which is also applied to the support costs. If you in the future decide to terminate partial licenses in that agreement. Oracle will recalculate the support for the remaining licenses to list price and any standard discounts of 0-20%.

How much does Oracle technical support cost?

Oracle technical support costs 22% of what you paid to Oracle for your licenses. Then the support costs increase year on year. Oracle, in 2023, announced that they are increasing support fees by 8%. You may also need to pay more for technical support if you need extended or sustaining support for older versions of Oracle software.

What is third-party support for Oracle?

Getting help from third-party support providers is the way for many end users running legacy applications that use older Oracle databases. Third-party support providers are specialized in supporting Oracle software and the environment that surrounds it.

Third-party means that you stop receiving access and updates to future releases of the Oracle software. You must contact a third party (not Oracle) for technical support requests. You must note that you can download upgrades and patches until your support contract with Oracle ends.

Why is it difficult to reduce Oracle support costs?

Oracle has been very successful with its technical support policies preventing companies from:

• Taking a break from Oracle support. For example, you go without support for a few years because you upgraded your Oracle Software.
• They also prevent customers from terminating unused software licenses.

This is made possible by Oracle technical support policies. You can find them here.

Oracle support policy #1 – Matching service levels

“Matching Service Levels When acquiring technical support, all licenses in any given license set must be supported under the same technical support service level (e.g., Software Update License & Support, Oracle Communications Network Premier Support, or unsupported). If you add Extended Support, you still must maintain Software Update License & Support for the entire license set; subject to availability; you must acquire Extended Support for all licenses of a particular version release of a program if you acquire Extended Support for any license in such version release. You may not support a subset of licenses within a license set; the license set must be reduced by terminating any unsupported licenses. You will be required to document license terminations via a termination letter.”

What this means: Is that an Oracle customer must have all their Oracle products within the same product set. For example, all databases under support or nothing under support – An “all or nothing” approach.

Oracle support policy #2 – Reinstatement fee

“Reinstatement of Oracle Technical Support If technical support lapses or was not originally purchased with a program license, a reinstatement fee will be assessed. The reinstatement fee is computed as follows: (a) if technical support lapsed, then the reinstatement fee is 150% of the last annual technical support fee you paid for the relevant program; (b) if you never acquired technical support for the relevant programs, then the reinstatement fee is 150% of the net technical support fee that would have been charged if support had been ordered originally for the relevant program per Oracle’s Support pricing policies in effect at the time of reinstatement. The reinstatement fee in (a) shall be prorated from the date technical support is ordered back to the date technical support lapsed. The reinstatement fee in (b) shall be prorated back to the original program license order date. In addition to the reinstatement fee described above, you must pay the technical support fee for the support period. This technical support fee is computed as follows: (i) if technical support lapsed, then the technical support fee for a twelve month support period shall be the last annual technical support fee you paid for the relevant program; (ii) if you never acquired technical support for the relevant program, then the annual technical support fee shall be the fee that would have been charged if support had been ordered originally for the relevant program per Oracle’s Support pricing policies in effect at the time of reinstatement. Renewal adjustments may be applied to the annual support fee described in (i) and (ii) above.”

What this means: If you terminate the Oracle support contract and wish to return to Oracle support, you need to pay the 150% penalty fee and support for the time you have been not paying support. This is why most Oracle customers cannot take a break from Oracle support.

Oracle Support Policy #3 – Repricing of technical support

The other major challenge Oracle customers face is that they have historically purchased Oracle. Years later, they have unused Oracle software licenses and wish to terminate support for those unused licenses. Oracle has developed a support policy to prevent you from doing this or at least make it difficult.

Price following reduction of licenses or support level

“Pricing Following Reduction of Licenses or Support Level Pricing for support is based upon the level of support and the volume of licenses for which support is ordered. In the event that a subset of licenses on a single order is terminated or if the level of support is reduced, support for the remaining licenses on that license order will be priced at Oracle’s list price for support in effect at the time of termination or reduction minus the applicable standard discount. Such support price will not exceed the previous support fees paid for both the remaining licenses and the licenses being terminated or unsupported and will not be reduced below the previous support fees paid for the licenses continuing to be supported. If the license order from which licenses are being terminated established a price hold for additional licenses, support for all of the licenses ordered pursuant to the price hold will be priced at Oracle’s list price for support in effect at the time of reduction minus the applicable standard discount.”

What this means: If you purchased licenses from Oracle and originally received a 70% discount on licenses, that discount was also applied to your annual support fees. If you years later wish to terminate 30% of the licenses in your contract, Oracle support will not be reduced by 30%. Oracle will recalculate the support cost on the remaining licenses at the list price and any standard volume discount. The result:  you will not reduce any support costs.

Common questions on Oracle Support Renewal and terminations

Oracle has consolidated many different CSIs into one large Oracle support renewal quote. Can I do partial termination and reduce Oracle support?

The answer is yes. Every CSI should be treated as an individual contract unless you have contract language linking them. Oracle has different technical support policies that make reducing Oracle support challenging, such as Oracle matching service levels and repricing rules. However, just because you have decided to consolidate your Oracle support for administrative reasons, it doesn’t mean that you cannot partially terminate each contract if you do not require the license and support.

If we terminate our Oracle support, will Oracle want to audit us?

The answer is it depends. Before you terminate support, always perform a license assessment to ensure compliance. You want to be ready for the Oracle audit and ensure not to terminate licenses you need elsewhere.

What is Oracle Extended Support?

Oracle has different levels of support: Premier, extended, and sustained. The simplest way of explaining what they are is that the older your Oracle software versions are, the lesser support you will receive from Oracle, but you will also pay more, as Oracle’s stance is that if they are supporting you with an older version, it cost more for them. Oracle extended support will cost you 10-20% more than premier support. This is why many Oracle customers upgrade their software to remain on Premier support and receive all the updates, bug fixes, and support.

Are Oracle technical support policies contractual?

They are not attached to your Oracle license agreements or Oracle OMA. However, your contract’s technical support policies clause has a hyperlink to this policy document. You accept the Oracle technical support policies when you sign the Oracle contract.

Oracle support renewal – 4 recommendations before renewing

• Always review if you are using the Oracle license or not; if you haven’t done an Oracle licensing review before your renewal, you will most likely renew support for unused Oracle software licenses.
• Perform the annual Oracle license optimization to optimize your Oracle licensing, lowering your Oracle licensing requirements by 10-30%.
• You can find ways around Oracle repricing rule and terminate unused software licenses, but it requires some work to succeed.
• Oracle support negotiation can only achieve the waiver of the annual 4% increase. Don’t expect any other results to come from negotiating Oracle technical support.

Top10 ways how to reduce Oracle support

It is possible to reduce Oracle support fees, but companies’ biggest mistake is that they believe it is done by negotiation with Oracle. Negotiation often leads to no reductions or, at most, very minimal results that no Oracle customer would be happy with.

Below is a list of strategies to investigate when embarking on a mission to reduce Oracle software maintenance and achieve real savings. The easiest way to reduce this is to take a break when you don’t need upgrades or technical support. But Oracle has a technical policy preventing you from doing that.

1. Reduce Oracle support by moving to third party

Move to a third-party support provider, such as Spinnaker Support – you will reduce your Oracle support fees by at least 50%. Note that you will lose the right to upgrade to later versions of Oracle software and updates that are released after you leave Oracle support.

2. Stop paying support for licenses that you are not using.

Review which licenses you are using and which licenses you are not using. On average, 30% of all Oracle software licenses are unused. Review your Oracle software deployments and match them to your Oracle license entitlements.

3. Downgrading to lower versions will cut your support costs

Consider downgrading to lesser versions of Oracle software, from Enterprise to standard edition. Many clients do not use Enterprise Edition features and can downgrade to the standard edition.

4. Oracle license optimization will reduce your support

Consider Oracle license optimization – this can be done by changing license models from processor to named user plus licenses with a 50% saving.

5. How to terminate unused licenses and avoid Oracle repricing

If you have unused licenses in your support agreements but cannot terminate licenses because of Oracle Technical Support Policy and repricing, review this video to work around that rule.

6. Moving to the Oracle cloud can reduce your Oracle support

Consider moving test and development environments to Oracle Cloud – as you would only pay for the time you utilize the environments. If you use test and development licenses on-premise, you pay for the license 24/7.

7. Moving Oracle licenses to AWS or Azure can lower your  costs

Consider moving Oracle workloads to AWS, Azure, or Oracle BYOL, as you can then license on vCPU or OCPU, which is often more cost-effective.

8. Changing your hardware platform to, for example, Oracle IBM will reduce your  support fees

Changing the hardware platform where Oracle is running and consolidating to specific hardware, such as IBM LPAR can reduce Oracle licensing requirements by 40%.

9. Leave Oracle all together

Stop paying maintenance completely. Investigate if you are using Oracle technical support. If you are transitioning to another solution – do you need to keep paying maintenance to Oracle?

10. Negotiation with Oracle rarely reduces your support

Negotiation with Oracle will often only result in small reductions, such as a waiver of the annual uplift (4%)

Oracle Support Reduction – FAQ

Oracle Support Optimization Service

• Oracle Support Optimization Service is a comprehensive service that includes a 360 review of your Oracle license contracts to identify cost savings and optimization opportunities.
• The service includes license optimization, which involves analyzing your current licenses and usage patterns to ensure you are not overpaying for licenses you don’t need.
• The strategic advisory is provided to help you align your Oracle licensing and support strategy with your business goals and objectives.
• The service provides options for reducing support costs, including strategies such as reducing the scope of support, transitioning to third-party support, or renegotiating your support contract with Oracle.
• The pros and cons of each approach are evaluated and presented to you so that you can make an informed decision based on your unique business needs and priorities.
• The service also includes information on how other organizations are reducing their Oracle support costs so that you can learn from their experiences and best practices.

Contact us today if you want our help to create a roadmap for reducing Oracle support.