Oracle Software: How to save costs?
Cost cutting is a necessary evil. Many companies evaluate different options for cost savings and some of them are heading their attention towards software spending.
In this article, we will address the options you have to save costs on Oracle support fees. Organizations that make use of different Oracle programs buy licenses and support maintenance whenever there is a specific demand, but these needs can change over time.
Most organizations assume that the costs associated with their changing software requirements will change as well. If your software requirements decrease, you will pay less. A logical way of thinking, but in practice, it turns out to be incorrect. Often your recurring costs will only increase, even if your software requirements remain the same or decrease.
Increasing Support Fees
The pricing that is applied to support maintenance is based on the level of support and the volume of licenses for which support is ordered, as well as the moment the licenses were purchased and the commercial negotiation skills of your purchasing department. However, the support maintenance of these licenses increases over time, as stated in the terms and conditions of your license agreement. This principle is known amongst many organizations as “support indexation”. Thus, even if your business requirements do not change over time, the associated support fees increase year over year.
As previously mentioned, the purchase of new software licenses is generally driven by specific business requirements. But these requirements are rarely stable and often subject to change. Not being able to foresee the future of your organization and its needs may leave you with too little or, sometimes, too many licenses than you actually need. In case you don’t have enough, the next logical step would be to buy more. But if you have too many, is putting them on the shelf the next step you should take? No, as you no longer want to pay support fees for the licenses you don’t use. However, end users are often discouraged to terminate the support maintenance for certain licenses, due to Oracle’s policies and reinstatement fees.
So, what options do you have to save costs on your Oracle estate?
What can you do to start saving costs?
Although not published widely, there are a number of (legal) options that you can consider to start saving costs. These options require a detailed, complete and accurate overview of your license entitlements and associated contractual terms and your current (and future planned) deployment of the Oracle programs. Without this overview, the moment you start cutting costs of your Oracle portfolio, the likelihood of being audited will increase drastically.
If you have the right knowledge and expertise to determine your real entitlements and associated terms, then several options can be considered:
Cancel a complete order
If you are sure that you are not using all the licenses as purchased through one order, then the support maintenance fees for that complete order can be cancelled altogether.
Rebuy of Used Licenses
You can buy the licenses that you really need through a new order and cancel the support maintenance of the initial order that included the used and unused licenses.
Migrate parts of your licenses into licenses with a different metric
The moment the licenses are migrated, the support stream of the migrated licenses is a “separate order” and can be terminated as a whole.
The scenarios discussed here are just a few examples of how you can start saving costs on your Oracle licenses. Keep in mind there are some more to consider. It all starts with a complete and accurate understanding of your license entitlements, deployment and usage.
For more details on the options you have to save costs on your Oracle estate read our white paper!
This article was published on 14-09-2017
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.