How to reduce Oracle Support Fees
- Terminate unused licenses: Identify and eliminate unused or underutilized licenses.
- Negotiate fees: Negotiate support terms, including annual increases.
- Consider third-party support: Use third-party providers for lower support costs.
- Optimize license usage: Regularly review and adjust licenses to match needs.
- Conduct license assessments: Ensure compliance and avoid unnecessary audits.
Many Oracle customers struggle with reducing the costs of their support renewals due to various Oracle technical support policies.
These include Oracle repricing and the Oracle matching service levels, which often cause customers to pay for unused software licenses. T
his article provides detailed information on Oracle technical support policies and practical tips on how to lower your Oracle support fees.
Understanding Oracle Technical Support Policies
What is an Oracle CSI?
The Customer Support Identifier (CSI) number is a unique identification number assigned to each user of an Oracle Cloud product. Oracle Support uses this number to identify and assist users with technical issues. The CSI number can be found in the “Support Identifiers” section of My Oracle Support.
A CSI number is associated with a support contract and allows users to create multiple account records. Administrators can add an unlimited number of users to the account.
What are Oracle Matching Service Levels?
The Oracle Matching Service Levels policy requires that you purchase the same service level for all licenses within a license set. Contrary to what some Oracle sales representatives may claim, it is not true that you cannot terminate support for a single contract. This policy only applies to products within the same product family, meaning you cannot terminate support for a single product.
Oracle often uses this tactic to keep customers locked into expensive support contracts. This rule applies to Java SE subscriptions and all Oracle products, including databases, WebLogic, and applications such as Siebel, Primavera, and EBS. It also applies to Oracle RDS purchased from AWS, requiring compliance with the Oracle Matching Service Levels policy for deployments on RDS AWS.
Oracle Repricing Explained
Oracle repricing is the process of setting prices for products. Annual support is typically 22% of the net license fee and is discounted based on volume. The price of future purchases is tied to a common Customer Support Identifier (CSI), allowing you to lock in a discount and avoid renegotiation each time you renew. The price of Oracle Support generally increases over time, with an annual increase typically around 8%, unless you have negotiated a waiver.
Different Levels of Oracle Support
- Premier Support: The highest level of support offered by Oracle, covering bug fixes, patches, security updates, legislative changes, and security updates. It typically lasts for three years after the product release date but can last longer. Check the product documentation for specific details.
- Extended Support: This may not be available if your database version is in the midst of a major update cycle.
Oracle Third-Party Support Providers
Third-party providers often offer significantly lower prices for Oracle support compared to using internal resources. This can result in cost savings of up to 75%. Rimini Street and Spinnaker Support are reputable providers offering Oracle software support.
Why Is It Difficult to Reduce Oracle Support Fees?
Reducing Oracle support costs can be challenging because it has implemented technical support policies designed to protect its revenue from support fees. These policies make it difficult for companies to:
- Take a break from Oracle support, such as going without support for a few years after upgrading their software.
- Terminate unused software licenses.
Oracle Reinstatement Fee
The Oracle Reinstatement Fee policy states that if technical support lapses or was not originally purchased with a program license, a reinstatement fee would be assessed. This fee is calculated as 150% of the last annual technical support fee paid for the relevant program if support lapsed or 150% of the net technical support fee that would have been charged if support was never acquired. The fee is prorated from the date support is ordered back to the date it lapsed for lapsed support or back to the original program license order date for never-acquired support. In addition to the reinstatement fee, the technical support fee for the support period must also be paid.
Unable to Terminate Unused Licenses
Oracle customers may face challenges when trying to terminate support for unused software licenses because Oracle’s policy prevents or makes it difficult.
This policy states that support pricing is based on the level of support and the volume of licenses for which support is ordered. Suppose a subset of licenses on a single order is terminated or the level of support is reduced.
In that case, the 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.
Common Challenges in Reducing Oracle Support Costs
- Oracle Matching Service Levels: This requirement requires all licenses in a license set to be supported under the same technical support service level, such as Software Update License & Support.
- Oracle Repricing: Adjusting the price of licenses that have already been purchased if the number of licenses or level of support changes.
- Oracle Reinstatement Fee: A penalty fee of 150% of the last annual support fee paid for relevant programs if support lapses or was never acquired initially.
FAQs about Oracle Support Renewal
- Q: What is the cost of Oracle Support Renewal based upon?
- A: Oracle Support Renewal costs are based on 22% of the one-time license fee.
- Q: Why are the costs of Oracle Support Renewal increasing?
- A: According to Oracle’s technical support policy, the company reserves the right to adjust customers’ technical support fees. The annual increase is typically around 8% each year.
- Q: Can I do a partial termination and reduce Oracle support if Oracle has consolidated many CSIs into one quote?
- A: Yes, each CSI should be treated as an individual contract unless there is contract language linking them.
- Q: If I terminate my Oracle support, will Oracle conduct a license audit?
- A: It depends. Before making any changes to your Oracle support, conduct a license assessment to ensure compliance.
How to Reduce Oracle Support Fees
Terminate Unused or Underutilized Licenses
Identify and terminate any unused or underutilized licenses to avoid paying for support on software that is not being used.
Negotiate Support Fees
Negotiate the terms of your support fees, including any annual increases. When purchasing an Oracle software agreement, negotiate the clause regarding annual support cost increases for as many years as possible.
Consider Third-Party Support
Consider using third-party support providers like Rimini Street and Spinnaker Support. These providers can offer significantly lower prices for Oracle support than using internal resources.
Optimize License Utilization
Ensure that you only purchase licenses for products and features you need. Regularly review your Oracle licenses and support contracts to determine if you need to renew your support or terminate any unused licenses.
Oracle Support Renewal: Recommendations
- Q: What is Oracle repricing, and how does it affect my support costs?
- A: Oracle repricing refers to adjusting the price of licenses that have already been purchased. Suppose you reduce the number of licenses or change the level of support for a particular license set. In that case, the support costs for the remaining licenses will be recalculated at the list price.
- Q: What are Oracle matching service levels?
- A: Oracle matching service levels ensures that all licenses in a given set are supported under the same technical support service level.
Oracle Support Renewal Costs
- Base Fee: Typically, 22% of the one-time license fee.
- Annual Increase: Usually around 8% each year.
Partial Termination and Reducing Oracle Support
You can partially terminate and reduce Oracle support even if Oracle has consolidated multiple CSIs into one quote. Each CSI should be treated as an individual contract unless there is contract language linking them.
Oracle License Assessment
Before making any changes to your Oracle support, conduct a license assessment to ensure compliance with your licensing agreements. This will help you prepare for a potential Oracle audit and ensure you do not terminate licenses you still need.
How We Can Help You
We specialize in helping organizations reduce their Oracle support fees. Our team of experienced professionals deeply understands Oracle’s technical support policies and pricing structures, and we use this knowledge to negotiate better terms on behalf of our clients.
Our Services Include:
- License Review and Assessment: We review your current Oracle licenses and assess your compliance with Oracle’s policies.
- License Optimization: We help you optimize your Oracle licenses to ensure you get the most value for your investment.
- Audit Support: If you face an Oracle audit, we provide guidance and support to help you prepare and respond effectively.
- Contract Negotiation: We assist with negotiating Oracle contracts, including terms related to support fees and policies.
- Training and Education: We offer training and educational resources to help your team understand Oracle licensing complexities.
Our goal is to help organizations save money on their Oracle support fees while maintaining the high-quality support they need to run their business effectively. Contact us to learn more about our services and how we can assist you.
Conclusion
Reducing Oracle support fees can be challenging due to Oracle’s strict technical support policies. However, you can significantly reduce your Oracle support costs by understanding these policies and implementing strategies like terminating unused licenses, negotiating support fees, and considering third-party support.
Conducting a license assessment before making changes and working with experienced professionals can also help ensure compliance and avoid unnecessary audits. Contact us today to learn more about how we can help you manage your Oracle support costs effectively.
