Oracle cost saving – case study II
Many Oracle users obtained licenses in the month of May in previous years. This, since May is the last month of Oracle’s Fiscal Year. Because of this, your support maintenance renewal proposal(s) are coming in shortly. This, since Oracle sends these proposals typically 3 months in advance. What should you do? Stop paying too much money for the support maintenance on your Oracle licenses. Unnecessary spend is something we see almost every day at the vast majority of our Oracle customers.
Customer case study
One of our EMEA based customers was part of a larger corporation, but was divested a few years ago. During the divestiture, the original parent company took this moment as an opportunity to assign a large number of licenses and associated support maintenance fees it had on the “shelf” to the divested entity. Due to Oracle’s repricing policy, the customer wanted to get rid of the support maintenance fees already for quite some time.
They ended up with shelfware licenses, as 10 years ago the company bought a large amount of licenses in a single order. What usually happens with these licenses is that 60-70% of them are never used due to failed implementations. The same happened at the parent company.
Fast forward to the divestiture moment, the large corporation was able to get rid of an annual support maintenance fee of 3.2M USD for licenses neither they nor the divested company was using. This, however, soon became the issue of the divested organization. The divested company initially did not realize that from all the licenses it got assigned (with a total annual support stream of 5.1M USD), 3.2M USD in support maintenance was for licenses they did not use. This, since proper Oracle Software License Management practices were not in place.
The divested company engaged with B-lay to implement an Oracle SAM Managed Service approach in which (on an annual basis) a complete and accurate view of the current entitlements and associated deployment was achieved. These internal license compliance review confirmed that indeed a total amount of 3.2M USD was paid on an annual basis for unused licenses. During the internal license review, additional demand for new licenses was determined. A commercial transaction had to take place with Oracle. During the commercial negotiations, a new investment of 650K USD had to be paid to resolve the identified non-compliance issues (against a discount of 85%). At the same time, in the contractual setup, an opportunity was created to terminate the 3.2M USD in annual support fees.
The result was that the customer was correctly licensed and at the same time reduced its recurring annual support maintenance fee. Oracle’s reaction was an audit. Upon the completion of the audit, Oracle confirmed (as determined during the internal review) that the customer was correctly licensed. After this engagement, the customer realized that managing Oracle software licenses requires a deep insight and knowledge, both from a contractual, technical and negotiation perspective. This customer is today still one of our most respected B-lay Oracle Managed Service customers.
What we can guarantee?
For 90-95% of all Oracle customers we can achieve direct cost savings through our services. Are you interested if this is applicable to you? Are you interested to understand the amount of money you can save on your Oracle support renewal? The answer is simple: Do a free health check to find out what can be achieved.
What do we need from you?
You answer 5 questions that we will share with you. After this, we set-up a meeting with you to discuss your current position, the potential for cost savings and the concrete options you have to a achieve this. A win-win situation.
Interested in some real customer cases?
Our customers across the globe are happy to have a reference call with you to share their individual experiences with you. Want to know more about the Oracle Cost Savings Health Check? Reach out to us at email@example.com or contact me directly at firstname.lastname@example.org.
This article was published on 09-04-2020
Richard is one of the managing partners at B-lay. He started to work in the license management industry in 2004 and worked for almost 10 years at Oracle as regional director of compliance. He uses his knowledge of enterprise software vendors (such as Oracle, SAP, IBM and Microsoft) to educate, equip and enable software end users in their challenges regarding proper software license management. Richard holds a master’s degree in IT, from University of Amsterdam in the Netherlands.