Oracle Support Renewal – Secrets to optimizing costs

Every time you purchase an Oracle software license, you will also receive an Oracle support renewal. This annual renewal includes technical support and the ability to download and apply updates and upgrades for the specific software license you have purchased. 

Many Oracle customers struggle to reduce the costs of their support renewals due to various Oracle technical support policies, such as Oracle repricing and the Oracle matching service levels. These policies can cause customers to pay for unused software licenses. This article will provide information on Oracle technical support policies, like the Oracle matching service levels and repricing, as well as practical tips on how to lower your Oracle support fees.

 If you want to learn more about the Oracle Support Rewards program and how to reduce your support costs by 33-25%, please see a separate article on the subject.

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. This number is used by Oracle Support 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. 

It is not true that you cannot terminate support for a single contract, as some Oracle sales representatives may claim. The Oracle Matching Service Levels policy only applies to products within the same product family. Therefore, it is not possible to terminate support for a single product. This is a tactic often used by Oracle to keep customers locked into expensive support contracts. 

This rule also applies to Java SE subscriptions and all Oracle products, including databases, Weblogic, and applications such as Siebel, Primavera, and EBS.

Contrary to a common misconception, this rule also applies to Oracle RDS purchased from AWS. You must follow the Oracle Matching Service Levels policy for deployments on RDS AWS.

Oracle repricing is the process of setting prices for products. The price of 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) and allows you to lock in a discount and avoid renegotiation each time you renew.

The price of Oracle Support increased over time. The annual increase is usually 4% year on year unless you have negotiated a waiver.

Many customers are unsure of how much Oracle technical support costs and are frustrated by the inflexible support policies and high fees required by Oracle. The cost of support increases by approximately 4% each year, which has become a significant problem for many customers. Although 

Different levels of Oracle support

The Premier Support tier is the highest level of support offered by Oracle and covers 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. The cutoff date for Premier Support varies, so it is important to check the product documentation for specific details. Extended support 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 and provide more freedom and control for companies to reduce their support costs. This can result in cost savings of up to 75%. 

Rimini Street and Spinnaker Support are two other reputable providers that offer support for Oracle software.

Why is it difficult to reduce Oracle support fees?

It can be difficult to reduce Oracle support costs because Oracle has implemented technical support policies that make it difficult for companies to:

• Take a break from Oracle support, such as by going without support for a few years after upgrading their Oracle software.
• Terminate unused software licenses.

These policies are designed to protect Oracle’s revenue from support fees. 

The Oracle Matching Service Levels policy requires that all licenses in a license set must be supported under the same technical support service level, such as Software Update License & Support. 

You may not support a subset of licenses within a license set and must reduce the license set by terminating any unsupported licenses, which must be documented through a termination letter. This means that Oracle customers must have all of their Oracle products within the same product set and must either support all of them or none of them, adopting an “all or nothing” approach.

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. 

The 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 had been ordered originally for the relevant program based on Oracle’s Support pricing policies in effect at the time of reinstatement 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. 

This fee is calculated as the last annual technical support fee paid for the relevant program if support lapsed or the fee that would have been charged if support had been ordered originally based on Oracle’s Support pricing policies in effect at the time of reinstatement if support was never acquired. 

This means that if you terminate an Oracle support contract and wish to return to Oracle support, you must pay a 150% penalty fee and support for the time you were not paying for support. This is why many Oracle customers cannot take a break from Oracle support.

Unable to terminate unused licenses

Oracle customers may face challenges when trying to terminate support for unused software licenses because of Oracle’s policy that prevents or makes it difficult to do so. This policy states that support pricing is based on the level of support and the volume of licenses for which support is ordered. If a subset of licenses on a single order is terminated or the level of support is reduced, 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. 

However, this 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 a price hold was established for additional licenses on the license order from which licenses are being terminated, support for all of the licenses ordered under 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.

This means that if a customer originally received a 70% discount on licenses and later wishes to terminate 30% of the licenses in their contract, the support costs will not be reduced by 30%. Oracle will recalculate the cost of support on the remaining licenses at the list price and any standard volume discount, resulting in no reduction in support costs.

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. For example, if you paid $2 million for an Oracle license, the annual support renewal cost would be 22% of that fee, equaling $440,000.

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 the technical support fees that customers pay. The annual increase is typically around 4% each year.

Q: What is the recommendation for negotiating Oracle Support Renewal costs?

A: When purchasing an Oracle software agreement, it is recommended to negotiate the clause regarding annual support cost increases for as many years as possible. This can help to avoid significant increases in support fees over time.

Q: Can I do a partial termination and reduce Oracle support if Oracle has consolidated many CSIs into one quote? 

A: Yes, you can do a partial termination 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. While Oracle’s technical support policies, such as the Oracle matching service levels and repricing rules, can make it difficult to reduce support costs, you can still partially terminate each contract if you no longer require the license and support.

Q: If I terminate my Oracle support, will Oracle conduct a license audit? 

A: It depends. Before making any changes to your Oracle support, it is important to conduct a license assessment to ensure you are compliant with your licensing agreements. This will help you prepare for a potential Oracle audit and ensure that you do not terminate licenses that you still need.

Q: What is Oracle repricing, and how does it affect my support costs? 

A: Oracle repricing refers to the process of adjusting the price of licenses that have already been purchased. If you decide to reduce the number of licenses you have or change the level of support for a particular license set, Oracle’s technical support policy states that the support costs for the remaining licenses will be recalculated at the list price, with only the standard volume discount applied if applicable. This means that, in most cases, you will end up paying the list price for support on the remaining licenses rather than receiving any significant discounts. It’s important to consider the potential impact of repricing on your support costs before making any changes to your licenses or support levels

Q: What are Oracle matching service levels? 

A: Oracle matching service levels is to ensure that all licenses in a given license set are supported under the same technical support service level. This means that if you want to purchase technical support for any of your Oracle licenses, you must purchase it for all licenses within the same set. This policy helps Oracle to protect its revenue from technical support by requiring customers to pay for support on all of their licenses, even if they are not using all of them.

Q: What are the implications of Oracle matching service levels for customers? 

A: For customers, the implications of Oracle matching service levels can be significant. It means that you must either pay for technical support on all of your Oracle licenses, even if you are not using some of them, or you must terminate the unused licenses in order to stop paying for support on them. This can be a challenge, especially if you have a large number of licenses and only a small subset of them are actually being used. It also means that you cannot choose to support only a portion of your licenses, as the Oracle matching service levels policy requires that you either support all of your licenses or none of them.

Q: Is there any way to avoid the implications of Oracle matching service levels? 

A: One way to avoid the implications of Oracle matching service levels is to carefully manage your Oracle license purchases and make sure that you only purchase licenses for products and features that you actually need. This can help you to avoid having a large number of unused licenses that you are required to pay for under the Oracle matching service levels policy. It can also be helpful to carefully review your Oracle licenses and support contracts on a regular basis and consider whether you need to renew your support or terminate any unused licenses. This can help you to avoid paying for unnecessary support and keep your Oracle costs under control.

How we can help you:

we specialize in helping organizations reduce their Oracle support fees. Our team of experienced professionals has a deep understanding of Oracle’s technical support policies and pricing structures, and we use this knowledge to negotiate better terms on behalf of our clients.

One of the ways we help our clients reduce their Oracle support fees is by identifying unused or underutilized licenses and working with them to terminate or downsize their contracts. We also assist with license assessments to ensure compliance and avoid unnecessary audits.

In addition, we provide guidance on the best ways to take advantage of Oracle’s various support options, such as third-party support and extended support, to minimize costs.

Our services also include support for negotiations and contract renewals, as well as ongoing support and guidance to help our clients stay on top of their Oracle support costs.

Overall, 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. So, if you’re looking to reduce your Oracle support costs, we can help. Contact us to learn more about our services and how we can assist you.Regenerate response