Oracle Support and Maintenance Terms
Purchasing an Oracle license is typically just the first step – most organizations also pay for annual support and maintenance to receive updates and assistance. Oracle’s support contracts come with their terminology and policies, which can significantly affect costs over time.
Here we demystify key support terms like SUL and the Matching Service Level policy, and explain concepts such as support renewals and reinstatement fees.
Read more about Oracle Licensing Glossary and terms.
We’ll also show how support costs grow and what pitfalls to watch for.
- SUL (Software Update License & Support): This is Oracle’s standard support offering for on-premises software licenses. When you hear that Oracle support costs ~22% of the license price annually, it refers to SUL. In plain language, if you buy a software license, Oracle charges an annual fee (usually 22% of the net license cost) to provide you with software updates (patches, new versions) and technical support services. As long as you continue to pay SUL each year, your license remains supported, allowing you to download the latest updates and contact Oracle for help. If you stop paying, you lose those privileges. The license is still yours to use in its last supported state, but you won’t receive upgrades or official assistance. SUL is sometimes just called “Oracle Premier Support” for the first years of a product’s life. Typically, the first year of SUL is mandatory when you purchase a new license.
- Matching Service Level Policy: Oracle’s support contracts include a rule known as the matching service level (sometimes informally referred to as “all or nothing” support). This policy requires that all licenses of a given product environment are maintained at the same level of support. In practice, it means you cannot pick and choose some licenses to support and let others lapse if they are considered part of the same “license set.” A license set generally includes all licenses for a particular Oracle program and any related options or modules that you own. For example, suppose you have 100 Oracle Database licenses. In that case, you can’t decide to only pay support on 50 of them and leave the other 50 unsupported – Oracle’s policy would force you to either support all 100 or terminate the unsupported ones. The idea is to prevent customers from only partially renewing support and still benefiting from updates on the whole environment. The matching service level also applies when adding extended support. If you pay for extended support on a product version, you must have a support agreement that covers all licenses of that product. This policy can catch companies by surprise when budgets are tight – you might wish to save money by dropping support for unused licenses. Still, Oracle may require you to drop support on all licenses of that product (effectively giving up the licenses entirely) to comply with the policy.
- Reinstatement Fees: If you let Oracle support lapse and later decide you need support again (for example, you skipped a year of SUL to save costs, and then a critical update or issue forces you to come back), Oracle will charge hefty penalties called reinstatement fees. The reinstatement fee is typically 150% of the last annual support fee, plus the cost of the lapsed period. In simple terms, suppose you were paying $100,000 per year for support, and you let it lapse for a year. To reinstate, Oracle might charge $150,000 (150% of $100,000) as a penalty, plus you would likely have to pay the $ 100,000 for the year you missed, for a total of $250,000 to get back on support. This policy strongly discourages customers from temporarily dropping support. Essentially, once you’re on support, Oracle makes it painful to leave and come back. The alternative, if you don’t want to reinstate, is to purchase new licenses entirely, which can also be very costly. There is a concept of “license termination” when dropping support – Oracle may ask you to sign a letter giving up rights to any license you stop supporting, ensuring you can’t legally use it anymore unless you fully re-buy it. Reinstatement and matching level policies together mean customers should be very careful before discontinuing support on any licenses.
- Annual Support Uplift: Oracle’s support fees are subject to annual increases, also known as uplifts. While the list rate is 22% of the license cost, Oracle often raises the dollar amount by a certain percentage each year. Typically, this uplift is around 8% per year, although Oracle has been known to use higher percentages, such as 10-20% or more, depending on the region and economic factors. This compounding increase means support gets more expensive over time, even if you don’t buy new licenses. For example, if you paid $22,000 this year on a $100k license purchase (22%), next year it might be $22,880 (assuming a 4% increase), then $23,795 the year after (another 4%), and so on. Over five years, a 4% annual increase would make your support fee about 21-22% higher than it started. Companies need to factor these increases into IT budgets and, ideally, negotiate caps on support escalations if they have leverage.
Read about Oracle Audit-Related Acronyms (LMS, GLAS, SIA) Demystified.
Support Cost Over Time – Example: Company A spends $ 1 million on Oracle licenses. First-year support is $220,000. With an average 5% annual uplift, their support costs would trend like this:
| Year | Support Fee (after uplift) |
|---|---|
| 1 (initial) | $220,000 |
| 2 | $231,000 (5% increase) |
| 3 | $242,550 (another 5%) |
| 4 | $254,678 (5% more) |
| 5 | $267,412 (5% more) |
After five years, the annual support is roughly $ 47,000 higher than in Year 1, solely due to compounded increases.
Without careful planning, these increases can strain budgets or outpace the value you get from the software.
Common Pitfalls and How to Manage Support:
- “Shelfware” Support: Paying maintenance on licenses you aren’t using. This often happens if a project ends or usage decreases, but you still own the licenses. Due to the Matching Service Level policy, you can’t drop those unused licenses from support easily without terminating them. This leads many to keep paying for shelfware. Management tip: Regularly review your license deployment. If some licenses are truly not needed, consider a strategy to formally terminate them (accepting that you can’t use them) to save costs, or see if they can be reassigned within the organization to a more useful purpose.
- Lock-in via Policies: The combination of policies, including matching service levels, reinstatement penalties, and annual uplifts, creates a lock-in effect. Many organizations feel compelled to keep renewing support on everything, even as costs rise. Management tip: You can negotiate with Oracle at renewal time – sometimes discounts or a slower uplift can be achieved, especially if you indicate willingness to move some systems to third-party support. Oracle might then make concessions to keep your business.
- Reinstatement Shock: Assuming you can always restart support later if needed. As described, the fees are punitive. Management tip: If you drop support for a product, have a long-term plan that doesn’t rely on Oracle’s support (for example, relying on internal expertise or a third-party support provider). If you think you might need Oracle’s official support again, you’re usually better off maintaining at least a minimal continuous support contract to avoid reinstatement charges.
- Extended Support Costs: Oracle products eventually transition from Premier Support to Extended Support (typically after 5 years), which incurs additional costs (often 10% on top of the standard fee, followed by 20% in later years). Some businesses are caught off guard when their support renewal increases by more than the usual 22%. Management tip: Monitor the support life cycle of your product versions. If possible, upgrade to a newer version before extended support fees kick in, or negotiate those fees if you must stay on older releases. In some cases, Oracle has waived extended support fees for specific products or years – savvy customers keep an eye out for such announcements.
Read about common Oracle license metrics.
Recommendations (Support & Maintenance):
- Optimize Your Support Portfolio: Conduct regular audits to determine which Oracle licenses are actively in use. If you have unused licenses (shelfware), consider certified termination or shelving options to remove them from support and maintenance. For licenses you must keep but aren’t heavily used, evaluate whether third-party support (from providers like Rimini Street or Spinnaker) is viable at a lower cost. However, be aware that rejoining Oracle support later will be expensive.
- Negotiate Uplifts and Terms: Don’t assume the standard 22% + annual increase is non-negotiable. Large customers or those willing to press at renewal time have succeeded in capping annual increases (e.g., keeping it to 0-3% instead of 5%) or even securing freeze periods. Also, negotiate co-terming support dates and aligning contracts to simplify management. Approach Oracle sales well before renewal with a clear ask – for example, “hold next year’s support cost flat in exchange for a multi-year renewal commitment.”
- Plan Before Dropping Support: If you decide to end support for a set of licenses, consider the implications. Under the Matching Service Level rule, dropping support might mean you must entirely stop using those licenses (signing them away). Ensure the business can live without that software or has an alternative. If you might need to use it, dropping support could be the wrong move. Always calculate the reinstatement penalty scenario for a cost comparison – sometimes it’s cheaper to keep paying support than to let it lapse and return.
- Manage Support Renewals Proactively: Treat support renewal season as a time for strategic review, not just a rubber-stamp payment. Scrutinize Oracle’s renewal quote for errors (licenses you thought were terminated, wrong quantities, etc.). Engage stakeholders to decide if every line item still provides value for its cost. If a support line doesn’t work, decide early whether to negotiate removal or termination or seek concessions.
- Leverage Independent Advisors: Consider involving an independent licensing advisor, such as Redress Compliance or similar firms, to review your support contracts. They can often identify opportunities to save money that might be missed, such as unused options bundled in your license set, or strategies to split out products into separate license sets to bypass the matching service requirement. Independent experts can also interface with Oracle on your behalf during negotiations, armed with knowledge of Oracle’s typical discounting and policies.
