Oracle Support Reduction Optimization
- Third-Party Support: Consider providers like Spinnaker Support for significant savings.
- Terminate Unused Licenses: Stop paying for non-utilized licenses.
- Downgrade Versions: Switch from Enterprise to Standard editions.
- License Optimization: Adjust license models to save costs.
- Cloud Transition: Migrate to Oracle Cloud or alternative cloud platforms like AWS.
- Hardware Changes: Consider platforms like IBM LPAR.
- Negotiate with Oracle: Engage in discussions for discounts.
- Stay Updated: Keep software current to avoid higher fees.
Top 10 Ways to Reduce Oracle Support Costs
Oracle’s software support fees often consume a significant share of IT budgets – typically 22% of the license purchase price per year, with annual increases of 4–8%.
These costs can double in under a decade if left unchecked.
This advisory outlines ten proven strategies to cut and control Oracle support costs without compromising essential coverage.
From negotiating contract terms (to cap rising fees and avoid “repricing” traps) to eliminating unused licenses, leveraging cloud incentives, and exploring third-party support, organizations can save 20–50% or more on Oracle maintenance.
The goal is to empower IT and procurement leaders with practical tactics to achieve sustainable cost reductions in support while managing vendor risks.
Read Top 15 Strategies to Reduce Oracle Support Costs for On-Premises Software.
1. Negotiate Support Caps and Contract Protections
One of the most effective ways to rein in Oracle support spending is at the negotiation table. Don’t accept Oracle’s standard yearly uplift (which is often ~4% by default, and can be higher).
Instead, insist on contractual caps or freezes on support fee increases. For example, negotiate a multi-year renewal with 0% annual increase for 2–3 years, or a cap of 3% maximum per year thereafter.
This can result in substantial savings over time. For instance, securing a 0% increase on a $1M support bill for three years would save over $120,000 compared to a 4% yearly hike. The table below illustrates the impact:
| 3-Year Support Renewal (on $1M/year) | Year 1 | Year 2 | Year 3 | 3-Year Total |
|---|---|---|---|---|
| Standard 4% Annual Increase | $1,000,000 | $1,040,000 | $1,081,600 | $3,121,600 |
| Negotiated 0% Increase (Price Hold) | $1,000,000 | $1,000,000 | $1,000,000 | $3,000,000 |
| Savings with 0% Cap | – | – | – | $121,600 |
Beyond capping increases, address Oracle’s repricing policy. Oracle’s standard terms allow it to re-price remaining licenses at current list prices if you drop support on a subset of licenses (often stripping away your original discounts).
This means that if you try to cancel support for part of your deployment, the support cost for what’s left can increase, wiping out any savings.
To avoid this, negotiate protections upfront: include a “no repricing” clause or plan to terminate entire license orders rather than partial quantities.
It’s often more cost-effective to remove one product completely from support than to drop a few licenses of many products (which triggers repricing).
Also consider negotiating “price hold” or rate lock provisions that fix support fees for a specified period. Oracle may agree to these terms, especially if you are making a new purchase or a multi-year commitment.
The key is to push for predictability and protection against the usual upward creep of support costs.
2. Eliminate Unused Licenses (“Shelfware”)
Many organizations are paying support on Oracle licenses and products they no longer use. Start by auditing your actual usage of Oracle software. It’s common to find 10–30% of licenses (or certain modules/options) sitting idle.
Each of those unused licenses is incurring 22% of its cost in annual support for no benefit. Identify this “shelfware” and plan to terminate support for those licenses at the next renewal.
For example, if your team isn’t using an optional Database feature (such as Partitioning or Advanced Compression), you can disable it and drop its support, saving the associated fee entirely.
One company discovered it was no longer using two Oracle Database add-on packs and canceled those support lines, saving around $100,000 per year without any impact on operations.
When eliminating licenses, note that Oracle’s policies enforce an “all or nothing” approach per product.
You generally must drop all licenses of a given product or module in that support contract to cancel support for it (Oracle will not let you support half of the licenses for a product and lapse the rest).
Plan accordingly: target whole products or components that can be fully retired. By carefully removing unused Oracle products from your environment (and formally terminating their support), you achieve immediate cost reduction.
Be sure to follow Oracle’s termination procedures, typically providing notice before the support renewal date, and obtain written confirmation from Oracle that the licenses have been removed from support.
This avoids any surprises (and stops Oracle from billing you for them in the future). Regularly pruning your Oracle portfolio of unused licenses is one of the quickest ways to reduce support costs year-over-year.
3. Optimize License Metrics and Usage
How you license your Oracle software can dramatically affect support costs.
Oracle offers multiple licensing models (per processor, per Named User Plus, concurrent device, etc.), and the chosen metric determines how many licenses – and thus the associated support costs – you require. To reduce costs, ensure you’re using the most cost-effective license metric for each system.
For example, if you have a small number of users on a powerful server, licensing by Named User Plus (NUP) might require only 50 user licenses, versus having to purchase four processor licenses. The support for 50 NUP licenses could be significantly lower than for four-processor licenses.
Conversely, if you have hundreds of users on a small server, a processor-based license may be more cost-effective overall. Evaluate each environment to “right-size” the license type and count to actual needs.
Sometimes, organizations find they can switch metrics (with Oracle’s approval) or reduce user counts to shrink support obligations. It may require a one-time cleanup of user accounts or reclassification of use cases, but the ongoing savings can be significant.
Another approach is to utilize the license in specific scenarios. For instance, non-production environments (such as development and testing) may not require full licenses if special terms or limited-use rights are available, as permitted by Oracle.
Additionally, ensure you optimize your configurations to avoid unnecessary licenses. For example, running multiple Oracle database instances on one server versus spreading them across multiple servers can reduce the number of processor licenses.
Hard partitioning or virtualization (addressed below) can also help restrict the licensed cores.
The bottom line: only pay for the capacity and usage you truly need.
By fine-tuning your license counts and metrics, you directly reduce the support fees (since support is proportional to the number of licenses).
This often requires a detailed review of your deployment architecture and license entitlements, but the effort pays off in lower support bills in the future.
4. Downgrade Editions or Remove Costly Options
Not every application needs the full power of Oracle’s top-tier product editions. Oracle often charges a premium for Enterprise Edition databases, as well as the numerous add-on packs and features, and the support fees for these are equally substantial.
A practical cost-saving strategy is to evaluate if a lower edition or fewer options could meet your requirements.
For example, Oracle Database Standard Edition (SE2) has a much lower license cost than Enterprise Edition (EE), and it includes the core database functionality needed for many workloads.
If some of your databases don’t use the advanced EE-only features, downgrading those instances to Standard Edition can slash licensing and support costs (potentially cutting them by 50% or more for that database).
Similarly, consider whether you truly need expensive add-ons like the Diagnostics Pack, Tuning Pack, or WebLogic Enterprise – each of these extras comes with its support fees.
If those features aren’t delivering commensurate value, you can uninstall or stop using them, and then terminate their support at renewal.
Real-world example: A mid-size company realized its branch office database could run on Standard Edition instead of Enterprise. By switching editions (and adjusting the hardware to fit SE2’s limits), they reduced the license cost and saved tens of thousands per year in support fees for that system.
Another organization assessed their Oracle middleware and found that they were paying support for WebLogic Suite features they never used. They re-licensed some servers with a cheaper WebLogic Standard license, thereby eliminating the unnecessary components.
The key is to match the product level to your actual needs: don’t pay for “enterprise” capabilities if a standard solution suffices. Downgrading or rightsizing in this manner can be performed at major upgrade or renewal points; it may require some migration effort or the acquisition of lower-tier licenses.
Still, the ongoing support savings are substantial and perpetual. Always weigh the functionality trade-offs, but often the cost vs. benefit strongly favors a simpler edition for non-critical or legacy systems.
5. Consolidate Systems to Reduce the Oracle Footprint
Oracle licensing and support costs scale with the number of servers, processor cores, and deployed instances in use. A strategic reduction of your Oracle footprint can yield direct savings on support.
Look for opportunities to consolidate Oracle workloads onto fewer machines or into fewer instances. For example, if you currently run 10 separate Oracle database servers, could you consolidate into five larger servers or a clustered environment with fewer total cores?
By archiving old data or consolidating applications, you may be able to retire some databases entirely. Each license you can surrender due to consolidation is one less support fee you will pay.
Be cautious when following Oracle’s rules on virtualization and partitioning when consolidating. Ideally, use Oracle-approved hard partitioning technologies or dedicated hosts to ensure you don’t inadvertently require licensing of an entire server farm.
However, done correctly, consolidation can enable you to decommission excess licenses. Companies often see 10–20% support cost reductions by rationalizing duplicative or underutilized Oracle systems.
Another aspect of consolidation is hardware/platform optimization. Oracle’s licensing cost per core can vary based on processor type (due to core factor multipliers).
By moving to servers with higher performance per core or a lower core factor, you might achieve the same throughput with fewer licensed cores.
For instance, some IBM Power or Oracle Engineered Systems have partitioning capabilities to limit core licensing. Utilizing such hardware effectively can allow you to run your Oracle software on, say, four cores instead of eight, cutting the required licenses in half (and likewise halving support costs for that environment).
Similarly, if you use virtualization, consider technologies like Oracle VM with hard partitioning or containerization, which confines Oracle to specific cores.
Document any changes and notify Oracle when you permanently shut down a server or instance – have them adjust the support contract to remove those licenses.
In short, simplify and shrink the environment: fewer Oracle installations = fewer support dollars. This not only saves money but can also reduce administrative overhead.
6. Replatform Certain Systems Away from Oracle
For some applications, the ultimate cost reduction move is to migrate off Oracle software entirely. This is a significant step, but it can eliminate support fees for those components altogether.
Evaluate your IT landscape for opportunities to replace Oracle technology with lower-cost alternatives. Common targets include migrating databases from Oracle to open-source or cloud-native databases (such as PostgreSQL, MariaDB, or AWS Aurora) or replacing Oracle middleware and business applications with alternative platforms or SaaS solutions.
If an Oracle-based system is not providing unique value (and if suitable alternatives exist), the savings from dropping Oracle can be huge by retiring that Oracle license; you stop paying the annual 22% support on it in the future – essentially a 100% saving on that line item.
In practice, replatforming is a strategic, long-term project. It involves migration costs and risks, so it’s not a quick fix but rather a calculated investment to reduce OPEX in the future. Many enterprises adopt a hybrid approach: identify non-mission-critical or older systems where they can gradually phase out Oracle.
For example, a company might migrate a reporting database to PostgreSQL or transition a legacy CRM from Oracle to a cloud-based SaaS CRM. Once complete, they can terminate the Oracle support for those licenses.
One real-world case involved a financial firm migrating a suite of smaller internal applications from Oracle Database to an open-source database.
As a result, they eliminated the Oracle licenses for those systems, saving hundreds of thousands of dollars in cumulative support fees. The key is to target areas where the business need doesn’t justify Oracle’s high cost.
Over time, each system you sunset or replace with a cheaper platform reduces your dependency on Oracle’s support model.
Even if you can’t migrate everything, every workload you remove from Oracle’s umbrella directly cuts costs and also gives you more leverage when negotiating support for what remains.
Suppose you do plan a major replatform or decommissioning; time your support cancellations strategically. Don’t renew support for an Oracle product that you know will be retired in 6 months.
You can often coordinate the end-of-life of the system with the end of a support period to avoid incurring any additional costs.
Additionally, suppose Oracle knows you’re migrating away. In that case, you may be able to negotiate short-term concessions (like a temporary support discount or “transition credit”) to keep you as a customer a bit longer – sometimes Oracle would rather reduce the fee than lose you outright. Use that fact tactfully in discussions.
7. Leverage Oracle’s Cloud and Support Rewards
Oracle itself now offers incentives to reduce on-premises support costs if you adopt its cloud services. One notable program is the Oracle Support Rewards program.
This allows customers who spend on Oracle Cloud Infrastructure (OCI) to earn credits that offset their Oracle on-prem support fees. For example, for every $1 you spend on OCI, Oracle will credit $0.25 (25%) against your on-prem support bills (and even $0.33 for those with Unlimited License Agreements).
If your company is moving workloads to OCI, you can accumulate these credits and substantially lower your support invoice for the databases or applications you still run on-prem.
Some organizations have effectively cut 10–30% off their annual support costs through heavy OCI usage combined with Support Rewards, essentially funneling cloud investments into maintenance savings.
Beyond the credits, migrating certain systems to Oracle’s cloud can allow you to terminate associated on-prem licenses and support.
For instance, Oracle frequently permits customers with Unlimited License Agreements (ULAs) or other licenses to migrate to OCI and then discontinue on-premises support for those licenses, as OCI operates on a subscription model (cloud services are supported).
One strategy is to migrate an Oracle application (say, an e-business suite or a data warehouse) to Oracle’s cloud, which might eliminate the need to pay on-prem support for that system’s licenses.
Oracle sometimes sweetens these deals at renewal time to encourage cloud adoption – you might negotiate that moving to their cloud includes some support cost forgiveness or a reduced renewal on remaining products.
However, be cautious: while OCI can reduce support costs, it’s effectively shifting some spend to a cloud subscription. Always analyze the total cost of ownership.
The advantage is that Oracle is motivated to help you lower support costs in this scenario, as it drives cloud revenue for them. If cloud fits your strategy, use Oracle’s programs to your benefit: it’s one of the few ways Oracle willingly reduces support revenue.
In summary, take advantage of cloud migration incentives like Support Rewards to offset and lower your maintenance spend, but do so as part of a broader cloud strategy (not just for the discount alone).
8. Switch to Third-Party Support Providers
Perhaps the most immediate and high-impact way to cut Oracle support costs is to leave Oracle’s support and use a third-party provider.
Third-party support firms (such as Rimini Street, Spinnaker Support, Support Revolution, and others) offer maintenance services for Oracle products at a fraction of Oracle’s price.
Typically, these independent providers charge around 50% of Oracle’s support fee for the same software. That means if you’re paying Oracle $500,000 a year in support, a third-party might charge about $250,000 – instantly saving you the other 50%.
Those savings accumulate year after year. Many companies have reported multi-million dollar savings over several years by switching their stable Oracle environments to third-party support.
Third-party support encompasses resolving technical issues, providing bug fixes and workarounds, and delivering tax and regulatory updates for Oracle applications – all without requiring Oracle’s direct involvement. It is particularly popular for mature, stable systems that the business isn’t planning to upgrade often.
Examples include older versions of Oracle E-Business Suite, PeopleSoft, JD Edwards, Oracle Database, or Oracle middleware that are “good enough” as-is.
By using third-party support, you can often extend the life of these systems beyond Oracle’s official support timeline (avoiding expensive forced upgrades or Oracle’s steep extended support fees).
The third-party will typically support your version indefinitely and even assist with customizations, which Oracle Support usually does not provide.
However, there are important considerations and trade-offs to consider. First, you will not receive new Oracle patches, upgrades, or enhancements once you leave Oracle’s support.
The third-party provider provides fixes for known issues and regulatory patches, but they do not have access to Oracle’s source code.
If a new critical security vulnerability emerges, you rely on the third party to devise a fix (which they often do, but some organizations feel this poses a risk).
Second, Oracle will not assist you while you are off their support. You can’t log tickets with Oracle; any issues must be handled by the third-party or your internal team. This means you should be confident in the stability of your systems.
Third, if you ever decide to return to Oracle’s support, reinstatement is very expensive – Oracle typically demands all outstanding support fees plus a 50% penalty.
For example, if you left Oracle support for two years and saved $1M, to return, you might have to pay $1M (for the missed years) + $500k (penalty) all at once.
This usually negates the savings, so most who leave the plan to avoid Oracle support permanently or until the system is entirely replaced.
Legally, using third-party support is allowed as long as you remain properly licensed for the Oracle software. You still own the licenses (which are perpetual), you’re just outsourcing support.
Oracle’s contracts don’t forbid this; they simply stop providing support to you. (Notably, Oracle has sued providers like Rimini Street over intellectual property issues, but not customers. As a customer, you just need to stop downloading Oracle’s patches once you leave Oracle support.)
Many governments and large enterprises use third-party support safely.
To mitigate risk, ensure you’re fully license compliant before switching (since Oracle may be more inclined to audit when you’re not a support customer).
In summary, third-party support can halve your support costs and often improve service quality, but it’s best suited for systems that are stable and not in need of frequent innovation.
Evaluate this route carefully – the savings are compelling, and it introduces competitive pressure on Oracle, which can be leveraged in negotiations as well.
9. Align and Co-Term Support Contracts
Oracle environments that have accumulated over the years often result in multiple support contracts with varying end dates and terms. This fragmentation can weaken your negotiating position and even cause oversight (e.g., a contract auto-renews because it wasn’t on your radar).
A recommended practice is to consolidate and co-term your support agreements. Work with Oracle (or your resellers) to align renewal dates so that a large portion (or all) of your Oracle products’ support comes up for renewal at the same time.
By creating a single, large renewal event, you gain leverage: Oracle’s team will see a big chunk of revenue at stake on one date, which gives you more clout to request discounts or concessions.
It also simplifies the negotiation process (one negotiation for, say, $2 million in support, rather than 10 separate talks for $200k each).
Oracle representatives are often more flexible when a lot of business is on the line – they’d prefer to retain all of it rather than risk you canceling part.
Co-terming also helps you avoid inadvertent renewals. Oracle’s default is auto-renewal at list price unless you cancel in advance. If you have staggered renewals, it’s easy to miss one. By bringing them together, you can manage it more actively.
Additionally, consider bundling new purchases or upgrades with support renewals as part of a bigger deal.
For example, if you plan to buy additional licenses, negotiate the support renewal at the same time – maybe Oracle will agree to a concession on the support side (like a discount or a cap) to secure the new license sale.
The overall strategy is to treat your Oracle support spend as a portfolio that you negotiate as one unit.
This way, you can cross-compensate: perhaps you agree to keep one product on support if Oracle lowers the price on another. It also allows you to escalate discussions to higher levels at Oracle (large renewals get management attention).
Prepare a clear combined view of all Oracle support contracts, their value, and your desired outcomes, then approach Oracle with that holistic picture.
This unified approach often results in better terms and cost reductions than handling each contract in isolation.
10. Practice Proactive Support Management
Reducing Oracle support costs isn’t a one-time project – it requires ongoing management and periodic review.
Treat Oracle support like any significant vendor service: continually assess the value you’re getting relative to the cost, and adjust accordingly. For starters, implement a process for annual (or semi-annual) support reviews.
In these reviews, compile all your Oracle support contracts and ask critical questions: “Are we still using this product actively? Have our needs changed? Can we scale down this license count? Did we add any new licenses that we need to budget support for?”
By doing this regularly, you’ll catch opportunities, such as a project that was retired last quarter (and thus its licenses can be terminated), before you pay for another year of support on it. It’s about being intentional and not letting support renewals fly under the radar.
Next, benchmark your support usage and satisfaction. Examine the frequency at which your teams log Oracle Support tickets, the importance of those resolutions, and the speed of Oracle’s response.
If you’re paying $500k a year and only logging a few low-priority tickets, that’s poor ROI. Use these insights in your negotiations: share with Oracle how little value you’re currently deriving and that you need a better price or service level.
If you are heavily relying on support, consider whether those issues could be handled internally or if Oracle’s knowledge base is sufficient – perhaps you don’t need full support for non-production environments, for example.
Also, ensure you’re not overpaying for premium support levels that you don’t need. Oracle’s standard Premier Support is the default, but customers sometimes pay extra for Advanced Customer Support or extensions – verify if these are truly needed.
Another element of proactive management is to hold Oracle accountable for the quality of its support. If you encounter chronic issues (such as slow responses or unresolved bugs), escalate them to Oracle and insist on improvements. You are paying a premium price; it’s fair to demand value.
In some cases, customers have negotiated the inclusion of a Technical Account Manager (TAM) or dedicated support contacts at no extra charge because they highlighted their large spend and concerns.
Oracle wants to retain support revenue, so they might offer additional services or minor discounts to keep you happy, but only if you ask and make a business case.
Finally, stay informed about Oracle’s product roadmaps and policy changes. Oracle occasionally adjusts support policies (for example, repricing rules or extended support waivers for certain versions).
By staying informed, you can capitalize on any new opportunities (or brace for new restrictions). Also, keep an eye on alternative support options (as discussed above) and market trends – the mere fact that you have options (such as third-party, cloud, etc.) is a form of leverage.
Proactive management means not waiting for the renewal quote to react; it means engaging with Oracle well in advance, providing data and requests, and internally reviewing your needs long before the renewal date.
This way, you approach each support cycle with a plan to either reduce cost, increase value, or both. Over time, this continuous improvement approach will significantly reduce waste and ensure that your Oracle support spending is justified.
Recommendations
- Negotiate Price Protections: Proactively negotiate support fee caps or freezes in your Oracle contracts to ensure optimal pricing. Aim for multi-year commitments with a 0% increase for a specified period, or a low fixed cap (e.g., a maximum of 3% annually). Also include clauses preventing Oracle’s repricing of remaining licenses if you drop some – this protects you from hidden cost increases.
- Cut Shelfware Immediately: Identify any Oracle licenses, modules, or options your organization isn’t actively using. Plan to remove those from support at the next renewal. Dropping even 10–20% of unused licenses can significantly reduce the maintenance bill. Ensure you terminate entire license sets to avoid compliance issues.
- Optimize What You Pay For: Revisit your Oracle license metrics and product editions. Where possible, switch to more economical licensing models (like Named User Plus if user counts are low) or downgrade to Standard Edition for databases that don’t need Enterprise features. This alignment can reduce the number or cost of licenses, directly lowering support fees.
- Consider Third-Party Support: For stable Oracle environments that don’t need frequent updates, evaluate third-party support vendors. Switching to a qualified third-party can save about 50% of annual support costs. It’s a proven route to big savings – just weigh the trade-offs (no new Oracle patches, etc.) and plan to stick with it long-term once you switch.
- Leverage Oracle’s Year-End Urgency: Time your negotiations with Oracle’s fiscal calendar. Oracle’s sales reps are most flexible at quarter-end and especially year-end (before May 31). Engaging early and indicating that you have cost concerns (and alternatives in mind) can lead Oracle to offer concessions or discounts to secure your renewal. Use that internal sales pressure to your advantage.
- Co-Term and Bundle Deals: Consolidate support contracts so they co-terminate on the same date. A larger, single renewal gives you leverage to negotiate a better overall rate. Similarly, if you’re buying new Oracle products, bundle the support renewal conversation into that deal – for example, agree to a purchase only if Oracle lowers or freezes support on your existing products.
- Migrate Selectively: Pursue strategic migrations off Oracle where feasible. Every system you can migrate to a cheaper platform (open-source database, SaaS application, etc.) means one less support fee to pay. Even moving a portion of your Oracle workload can help reduce overall costs. Plan these moves for the long term and align support cancellations accordingly (don’t renew what you’re retiring).
- Use Oracle Cloud Credits: If your company is adopting the cloud, take advantage of Oracle’s Support Rewards and similar incentives. By shifting some workloads to Oracle Cloud (OCI), you can earn credits that offset on-prem support costs. In essence, you’re redirecting spend to get double benefit (cloud services + support reduction). Factor this into your cloud ROI calculations – it can make a strong financial case for using OCI.
- Maintain Compliance and Documentation: When reducing support, always stay within the bounds of your license agreements. Document any license terminations or support changes in writing with Oracle. Keep proof of what licenses you dropped and when. This ensures you won’t be billed in error and protects you in case of an Oracle audit. A well-documented licensing position gives you confidence to optimize support without fear.
- Continually Review and Adjust: Make Oracle support optimization an ongoing practice. Review usage, costs, and needs yearly. Involve stakeholders to decide if the value justifies the expense. By regularly scrutinizing support and exploring alternatives, you prevent “auto-pilot” spending. This discipline leads to sustainable savings and ensures that your spending aligns with the business value delivered.
Checklist
- Audit Your Oracle Usage: Compile an inventory of all Oracle products and licenses you have, and review how each is being utilized. Mark any that are candidates for retirement or reduction (e.g., unused modules, low-utilization systems).
- Review Contract Terms: Locate your Oracle agreements and note the clauses related to support pricing. Check if you have any caps or clauses about terminations. Identify what you want to negotiate (cap increases, remove repricing, align end dates, etc.).
- Plan Renewal Strategy Early: Initiate internal discussions at least 6–12 months before your support renewal date. Set targets (e.g., “We need to save 20%”). Engage Oracle representatives early, and gather any leverage points (like considering third-party support or a competing database).
- Evaluate Support Alternatives: Determine which Oracle systems could be transitioned to third-party support, Oracle’s cloud (OCI), or potentially replaced by an alternative solution. Do a risk-benefit analysis for each alternative path so you’re ready to execute if approved.
- Secure Approvals and Execute: Obtain management buy-in for the chosen cost-cutting actions (such as eliminating certain support or transitioning to third-party services, etc.). Then, execute methodically: issue cancellation notices for support you’re dropping, sign any new contract amendments (for caps or cloud credits), and ensure Oracle provides updated paperwork reflecting the changes.
FAQ
Q1: Why are Oracle’s support fees so high, and how are they calculated?
A1: Oracle’s standard support fee is 22% of the upfront license cost per year. This means that if you purchased $1 million in Oracle software (net of any discounts), the annual Premier Support will cost approximately $220,000. Oracle charges this to provide updates, patches, and technical help. The fee tends to feel high because it’s a significant fraction of the license cost every single year – after roughly five years, you’ve paid the full cost of the license again in support fees. Additionally, Oracle’s support includes access to new versions, which they price into that percentage. Compared to some other vendors, 22% is on the higher side, and it’s essentially non-negotiable (Oracle has a published policy that 22% is standard). The result is maintenance fees that can outstrip the value if you’re not heavily using Oracle’s support services or new releases.
Q2: Does Oracle increase support costs every year?
A2: Yes, Oracle typically applies an annual increase to support fees. In many contracts, it’s around 3–4% per year (often tied to an inflation index or set as a fixed uplift). In periods of high inflation, or if not stipulated, it could be more – some customers have seen annual hikes of 6–8%. These increases compound over time. For example, a $1,000,000 support bill with a 5% annual uplift would grow to over $1,157,000 after three years. Oracle justifies these increases as a means to cover the cost of living or salary raises for support staff. However, you can negotiate this. Many customers successfully secure a cap (like no more than 0–2% per year) or even a flat fee for a couple of years. If your contract doesn’t mention a cap increase, expect an automatic uplift each year. Always read your renewal notice – Oracle usually states the new amount, which includes the increase. Pushing back on increases is important to avoid “budget creep” in your IT spend.
Q3: What is Oracle’s “repricing” policy, and how can we avoid its effects?
A3: Oracle’s repricing policy is a contractual mechanism that kicks in if you try to drop support on only part of your licenses. In simple terms, if you cancel support on a subset of licenses from an original order, Oracle reserves the right to recalculate (reprice) the support fee for the remaining licenses at the current list price. This often removes any existing discounts, resulting in you paying nearly the same total as before, even with fewer licenses supported. For example, say you have 100 licenses on support at a discounted rate, and you drop 20 of them. Oracle might reprice the remaining 80 at full price, so you end up saving little or nothing, effectively punishing the partial reduction. To avoid this, the best strategy is an “all-or-nothing” approach: terminate support only for whole groups of licenses that were purchased together (the entire order or product line). If you need to reduce licenses, try to eliminate a full product or an entire order line item. Another tactic is to negotiate upfront (during purchase or renewal) that no repricing will occur if you later drop licenses – get it in writing. If you’re already facing a repricing situation, sometimes you can convince Oracle to waive it (especially if you’re also buying something new or if you demonstrate you’ll leave otherwise). In summary, it is essential to understand that partial cuts often don’t yield proportional savings due to repricing. Plan reductions in chunks that Oracle can’t reprice, and negotiate contract terms to limit this whenever possible.
Q4: Is it legal and safe to use third-party support for Oracle products?
A4: Yes, it’s legal to use third-party support as long as you remain properly licensed for the Oracle software. When you buy Oracle licenses (which are typically “perpetual” rights to use the software), you are not obligated to keep buying support after the first year – it’s optional. Going to a third-party support provider simply means you’re opting to get maintenance from someone other than Oracle. There have been court cases (Oracle has litigated against Rimini Street, for example). Still, those disputes were about how the third-party was accessing Oracle’s intellectual property, not about customers receiving support from a third-party. As a customer, you have the right to get help from external consultants or support firms. Oracle cannot cancel your license just because you don’t pay them for support. In practice, thousands of Oracle customers, including large enterprises and governments, use third-party support safely. The key considerations: once-off Oracle support, you should stop downloading Oracle’s patches or updates (since that’s limited to active support customers). Let your third-party provider handle updates or give you fixes. Also, be extra careful with license compliance – Oracle might be more inclined to audit you if you’re not their support customer (because it’s one less relationship tying you to them). But as long as you’re using your licenses within the rights you purchased, there’s nothing illegal about third-party support. Ensure that you choose a reputable third-party provider who understands Oracle licensing rules and has a proven track record. In summary, it’s both legal and a well-established practice, but do your due diligence on the provider and maintain good compliance hygiene.
Q5: What are some quick wins to reduce Oracle support costs if we’re approaching a renewal?
A5: If your Oracle support renewal is coming up soon and you need immediate cost relief, focus on a few “quick win” actions: (1) Identify any licenses or products you can live without and notify Oracle to terminate those from the renewal. Even removing one unused module or a development server’s licenses can save money right away (just ensure you’re not using them in production). (2) Open a conversation with your Oracle account manager about cost issues – sometimes simply expressing that the budget is challenged and you’re considering alternatives will prompt Oracle to review your account for possible discounts. They may offer a one-time discount or credit to keep you on board, especially if it’s a competitive situation. (3) Ask for a short-term price hold. If you can’t get a long-term cap in time, negotiate that this year’s renewal is at the same price as last year (0% increase) as a condition to renew. Oracle reps have some discretion, especially if it’s late in their quarter; they might get approval to waive the uplift for a year. (4) See if co-terming is possible now – Oracle might extend one contract to align with another, and pro-rate costs, which could simplify next year’s negotiation and possibly earn a concession now. (5) Finally, if you truly have a third-party support quote in hand or plans to move something to the cloud, use that as leverage: diplomatically let Oracle know you have an option to reduce costs outside of Oracle. This sometimes makes them come back with a better offer (e.g., a 15% discount if you sign a multi-year renewal). Each of these actions can be taken in the weeks or months leading up to renewal to squeeze out savings. Just be sure to give yourself enough runway (waiting until the last day is risky). Engaging proactively and asking for concessions can result in at least modest discounts or cost avoidance, which is far better than simply paying the invoice as-is. Get and improve negotiating leverage in long-term Oracle engagements.
