Case Study – Oracle Support Optimization – Telefónica – Oracle ULA Aftermath: €40M in Support Savings with Strategic Shift to Third-Party Support
Background
Telefónica, a multinational telecommunications company headquartered in Spain, operates across Europe and Latin America, employing over 100,000 staff.
Like many large enterprises, Telefónica built much of its IT infrastructure on Oracle technology. Years earlier, the company entered into an Unlimited License Agreement (ULA) with Oracle, which granted deployment flexibility across various products, including Oracle Database, WebLogic, RAC, and SOA Suite.
After certifying its ULA and locking in perpetual rights to a broad Oracle technology footprint, Telefónica was left with one persistent problem: Oracle’s ongoing support costs were consuming a disproportionate share of the IT budget.
The annual bill had climbed to over €8 million, despite the software stack remaining largely stable.
With no plans for new Oracle investments, but no desire to risk system integrity, Telefónica engaged Redress Compliance to explore how it could reduce its Oracle support costs without compromising system performance, vendor compliance, or business continuity.
Read how to move to Oracle third-party support.
Challenges
The Oracle ULA had been certified, but the financial burden didn’t end there.
Oracle continued to charge full support on the entire portfolio—based on list price, not actual usage—creating a situation where Telefónica was paying premium fees for legacy software that had not evolved or required updates.
The company faced several issues:
- Escalating support costs: Oracle’s 22% support model included annual increases, even for static deployments. Over five years, this meant that support fees would surpass €50 million unless action were taken.
- Inflexibility: Oracle’s policies made it impossible to drop unused licenses without losing entitlements. Even minimal-use products carry full-price support.
- Value erosion: Many of the Oracle workloads were mission-critical but stable. Telefónica wasn’t leveraging Oracle patches or upgrades at a level that justified the spend.
- Risk perception: Internal stakeholders feared that reducing Oracle’s involvement could lead to compliance issues or degrade the quality of support.
- Lack of insight: Telefónica’s IT, finance, and procurement teams needed external expertise to dissect the Oracle contracts, licensing footprint, and support obligations.
The question was clear: Could Telefónica continue running Oracle reliably—but on radically better financial terms?
How Redress Compliance Helped
Redress Compliance launched a structured engagement to uncover optimization opportunities and build Telefónica a strategic roadmap for supporting cost reduction.
1. Deep Oracle Licensing & Support Analysis
Redress conducted a full inventory of Telefónica’s Oracle licenses, usage patterns, and support entitlements. By analyzing server-level deployments and historical support spend, they identified:
- Underutilized products still incur full support fees
- Instances no longer in active use
- Products where no critical patches or Oracle assistance had been used in years
2. Cross-Functional Workshops
To align stakeholders across IT, finance, and procurement, Redress ran a series of workshops that:
- Clarified Oracle’s support terms, obligations, and restrictions
- Debunked myths about third-party support’s legality and effectiveness
- Evaluated workload criticality and business impact
This transparency helped Telefónica overcome internal resistance and build consensus around new support strategies.
3. Strategic Support Options Assessment
Redress presented several pathways, including renegotiating with Oracle, reducing partial support, and switching to third-party support. Based on workload maturity, the most compelling option was to:
- Retain internal ownership of Oracle licenses (certified post-ULA)
- Transition support to a third-party provider at ~50% of Oracle’s cost
- Redirect internal resources to manage patching and version governance where needed
Redress shortlisted reputable third-party support vendors, negotiated service level terms, and guided Telefónica through vendor due diligence.
4. Transition Roadmap & Compliance Safeguards
Redress built a step-by-step roadmap for migrating support, including:
- Technical handover and onboarding with the new provider
- Documentation of entitlement boundaries to preempt any future Oracle inquiries
- Internal controls to track usage and ensure no drift beyond the licensed scope
Telefónica’s systems remained fully licensed, compliant, and supported—just no longer on Oracle’s books.
Outcome and Impact
The results were immediate and strategic:
- €8M saved in Year 1, by moving the bulk of support to third-party providers
- €40M in cumulative savings over 5 years, avoiding Oracle’s 4% annual uplifts and eliminating support for unused products
- No audit triggers or compliance issues, due to meticulous license mapping and support planning
- Improved IT control, with Telefónica free to dictate its own upgrade and maintenance timelines
- Long-term flexibility, with Oracle no longer able to enforce support-based lock-in tactics
Rather than being tied to Oracle’s cost model, Telefónica now pays for support aligned to actual business need—and gains faster, more personalized assistance from their new provider.
Client Quote
“Redress Compliance showed us what Oracle never would—that we had options. Their deep knowledge of Oracle contracts and licensing gave us the confidence to move to third-party support. We’re now saving €40 million over five years and still running every Oracle system we need, securely and on our terms.”
— CFO, Telefónica
Call-to-Action
If your organization is still paying Oracle’s full support costs on legacy systems, it’s time to rethink. Contact Redress Compliance to schedule a free Oracle support cost assessment—and start building your path to savings and independence.
Read about our Oracle Third Party Support Advisory Service.
Read our other Oracle Support Reduction Case Studies.
