Negotiating with Oracle is rarely a pleasant experience. As a CIO, you need candid, tactical advice – not marketing fluff – to navigate Oracle’s hardball tactics.
Below is an insider-style breakdown of five critical areas: license deals, Oracle Cloud (OCI), SaaS contracts, audits, and support renewals. Expect blunt insights on Oracle’s playbook and how to counter it.
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Oracle License Negotiations
Oracle’s software license negotiations are a complex web of terms and high-pressure sales tactics.
Seasoned CIOs know that Oracle’s sales reps are among the most aggressive in the industry.
They won’t hesitate to use every trick to maximize the deal size. Here’s the no-nonsense lowdown on handling license deals:
- Sky-High Initial Prices: Oracle typically starts with outrageously high list prices for databases, middleware, or applications. Don’t be shocked by an initial quote that makes your jaw drop – it’s a tactic. Oracle protects its 22% support fees (calculated based on list price) by maintaining high list prices. Never accept the first quote. It’s padded with plenty of room for negotiation. A savvy CIO will anchor the negotiation by first countering with a reasonable price, forcing Oracle to negotiate down from their figure rather than up from yours. Oracle’s pricing is famously flexible, so use that to your advantage by starting low.
- Quarter-End Pressure: Oracle’s fiscal quarter and year-ends are their feeding frenzy. Sales reps come knocking with “one-time” discounts if you sign by a certain date – typically end of May (Oracle’s fiscal year) or end of quarter. This urgency is manufactured pressure. They want you to believe the deal disappears after the deadline. Oracle often sweetens offers as deadlines loom because the deal needs to meet its quota. Use this timing to your advantage, but don’t let it rush you into a bad deal. If Oracle misses their quarter, that’s its problem, not yours.
- Bundling and “Solution” Deals: Expect Oracle to bundle products into a comprehensive “all-in-one” proposal. They’ll dangle a bigger discount if you buy an enterprise license bundle, additional modules, or an Unlimited License Agreement (ULA). Be cautious: Bundles often include shelfware (extras you don’t need, but you’ll still pay for support). ULAs can be a double-edged sword – offering unlimited use for a period, but potentially leading to a costly true-up or renewal trap later if not carefully managed. Blunt advice: Only pay for what you realistically plan to use. If Oracle throws in extra software “for free,” recognize you’ll still pay maintenance on it. Push back on bundling; insist on pricing each item individually so you see what you’re paying for each component.
- Opaque Contract Terms: Oracle’s contracts (Oracle Master Agreements, ordering documents, etc.) are dense and Oracle-favorable by default. Don’t gloss over terms like virtualization rights, sub-licensing, or territory restrictions. One insider tip: Request the contract in Microsoft Word format, not a PDF or a click-through agreement. Oracle often slips new onerous terms via click-wrap updates (for example, more restrictive audit clauses or cloud usage restrictions). Insist on reviewing and editing terms. Never assume Oracle’s boilerplate is non-negotiable – everything is negotiable if your spend is significant enough.
- Leverage Your Alternatives: Oracle sales reps love to feel that you have “no choice” but to buy their solution. Dispel that notion. Make it clear that you have options, such as extending the use of existing licenses, considering open-source databases, or migrating new workloads to a different platform. If Oracle believes you’re locked in, you lose leverage. Even if a switch is painful, letting Oracle think you might walk away creates pressure on them to be more flexible on price and terms. Real-world scenario: A Fortune 500 firm evaluating a costly Oracle database renewal informed Oracle that they were testing PostgreSQL for new projects. This credible threat of alternative solutions helped them secure an additional 20% discount and more favorable terms.
Read Top 15 Things to Know About Oracle Discounting and Negotiation Strategies.
Common Pitfalls to Avoid:
- Revealing too much: Don’t tip your hand on the budget or project timelines. Oracle will calibrate its offer to whatever number you inadvertently reveal (“Oh, you have a $2M budget? Funny, this deal comes to $1.99M…”). Keep your internal budget and urgency hidden.
- Signing multi-year deals blindly: Oracle may offer a multi-year license or ULA with an attractive upfront discount. If you commit, ensure you have clear exit options or renewal rights. Locking in a 3-year ULA without a plan to utilize it effectively is a classic blunder—you could end up overpaying for unused capacity or renewing at higher prices.
- Ignoring compliance traps: Oracle’s licenses often have complex definitions (e.g., Named User Plus, which counts every possible user or processor in virtual environments). Misunderstandings here can lead to compliance issues later. Always clarify metrics in writing and document any verbal assurances you receive. If a rep says, “Oh, you don’t need to license that test environment,” get it in the contract. Verbal promises mean nothing once you’re audited.
Read Oracle License Negotiation Toolkit: 15 Essential Strategies for Better Deals.
Preparation Tactics:
Treat an Oracle license negotiation like a major project. Assemble a cross-functional team – IT knows the tech needs, procurement knows negotiation, legal reviews terms, and finance ensures it fits the budget.
Do your homework on usage: know exactly what licenses you have, what you use, and what you truly need going forward. With data in hand, you can confidently prune Oracle’s proposal down to size. Have your team identify any overlaps or redundant products.
Oracle might propose additional products, such as BI tools or security suites – if you already own something similar, be prepared to counter with that knowledge. Moreover, decide on walk-away points: “If Oracle doesn’t come under $X or allow these terms, we’ll defer the project or find another way.”
Communicate this internally so everyone is on the same page. Oracle’s divide-and-conquer tactics don’t work. They often try to appeal to an executive over the negotiator’s head with a “special deal.” Ensure that your leadership is prepared to support your stance.
Read Top Strategies for Negotiating Oracle ULA and PULA Contracts.
Read Top 10 Tips for Oracle License Negotiations.
Oracle Cloud Infrastructure (OCI) Negotiations
Oracle aggressively promotes OCI, often tying it to other deals. Negotiating an OCI contract can be twisty as Oracle tries to lock in cloud revenue.
Unlike on-prem licenses, cloud deals are about committing to usage and spending levels.
Here’s the frank guidance on OCI negotiations:
- “Choice” of Pricing Model: Oracle will present two main pricing options for OCI: Pay-As-You-Go vs. Annual Commit (Universal Credits). Pay-as-you-go is flexible with no commitment, but comes at a higher list price. Annual commitments, such as prepaid credits or minimum spending agreements, offer larger discounts but require a commitment to a set spending amount. Oracle’s clear preference is to get you on a committed spend. Insider tip: Only commit to what you’re confident you’ll use. Oracle reps may try to upsell your commitment (“If you commit $2 million over 3 years, we can give 30% off”). Don’t overcommit just to get a discount – you could end up paying for unused capacity. It’s often wiser to start with a modest commitment and grow it later than to overshoot and waste the budget.
- Leverage Support Rewards: If you’re an existing Oracle customer paying hefty support fees for on-prem software, Oracle’s Support Rewards program can be a bargaining chip. Oracle offers credits or rebates on OCI for customers who maintain Oracle support on other products. This essentially discounts your cloud spend as a reward for staying in the Oracle ecosystem. If Oracle doesn’t, you can negotiate how those support rewards will offset your cloud bill. It’s one of the few “gives” Oracle has, so ensure it’s considered.
- Flexibility with Unused Funds: One common OCI gotcha is using or losing cloud credits. You commit to an annual spend, and if you don’t consume it, tough luck – money gone. A CIO with experience will push for flexibility: the right to roll over unused credits to the next year or to reallocate them to different cloud services if your needs change. Oracle may not grant unlimited flexibility, but even a partial carryover or ability to shift funds between OCI services is worth negotiating. Also, request regular consumption reports and the ability to adjust commitments if you’re consistently under-consuming – otherwise, you’re just gifting Oracle free money.
- Avoiding Lock-In Traps: Oracle will emphasize OCI’s strengths (especially if you run Oracle databases – they’ll tout how Oracle DB runs best on Exadata Cloud or Autonomous DB on OCI). While OCI can be technically solid, don’t let Oracle make it your only home. Negotiate terms that don’t penalize you for using multiple clouds or eventual migration. For instance, be aware of high egress fees (the cost of moving data out of OCI) or long-term commitment lengths with substantial penalties. If you’re signing a 3-year commitment, consider negotiating a clause for early termination or downsizing with advance notice, even if you must forfeit some discounts. Oracle might resist, but raising the point can sometimes lead them to propose creative solutions – perhaps converting some remaining commitment to a different Oracle service instead of a pure penalty.
- Benchmark and Scenario Planning: Prepare your team by meticulously forecasting your cloud needs. Oracle will happily provide a “cloud consumption forecast” for you, which conveniently aligns with their goal of selling you more. Instead, have your cloud architects model your likely OCI usage (compute instances, storage, DB hours, etc.) over the term. Benchmark against other clouds: know what the equivalent would cost in AWS or Azure. This not only gives you leverage (“We could run this on AWS for $X, Oracle, can you match that?”), However, it also prevents Oracle from presenting a deal that only appears attractive. With data in hand, you can negotiate rates line by line – e.g., “We need X TB of storage; your price is $Y per TB, which is higher than the market rate, so sharpen your pencil.” Oracle does have wiggle room, especially if it senses competitive pressure.
Read Oracle OCI Contract Negotiation Toolkit: Top 15 Tips for Enterprise Deals.
Real-World Scenario:
A global retailer was considering OCI for a new analytics platform but was wary after Oracle’s first offer: a large three-year commitment with no way out.
The CIO’s team countered by showing Oracle that AWS had a lower total cost of ownership (TCO) for a similar scenario.
Oracle’s sales reps, eager to win a cloud customer, eventually agreed to a proof-of-concept phase —a smaller, six-month commitment with the option to expand at the same discounted rate.
They also included a contract addendum allowing the customer to pivot part of the spend to Oracle SaaS apps if OCI didn’t meet expectations.
The result: the customer felt more secure, and Oracle still managed to get them into OCI, albeit on more customer-friendly terms.
Lesson: Don’t assume Oracle’s cloud contract is take-it-or-leave-it; negotiate creative clauses that give you an escape hatch or flexibility.
Read Oracle Contract Negotiation – Case Study: How a Healthcare Network Cut 30% in Oracle Support Costs.
Watch Out For:
- Post-Contract Price Surprises: Unlike on-premises licenses, where support price increases are somewhat capped, cloud services can increase in cost after your term ends. If you sign a short 1-2 year cloud deal, consider the implications of renewal. Oracle might dramatically increase prices when it’s time to renew, as it knows that moving a whole environment out of OCI is a painful process. Try negotiating price protections for renewal, such as a cap on rate increases or an option to renew for an additional term at a preset discount. Oracle’s standard cloud contract often lacks this protection. You may not get a firm cap, but raising the issue signals to Oracle that you’re not an easy mark for future gouging.
- All-or-nothing Discounts: Oracle may bundle OCI as part of a larger deal, including licenses or apps. Be cautious of deals that say, “You get this discount on licenses only if you also spend $X on OCI.” The cloud tail can end up wagging the dog. Break out the components and evaluate OCI on its own merits and costs. Call that out if the combined deal looks good, but OCI is unnecessary or overpriced. Sometimes, you’re better off negotiating each piece separately – even if Oracle resists – to avoid being stuck with a subpar cloud commitment tied to another purchase.
Oracle SaaS Negotiations
Oracle’s SaaS offerings (ERP Cloud, HCM Cloud, NetSuite, etc.) promise modern cloud apps, but negotiating them is as tough as negotiating their licenses.
Oracle SaaS contracts often include complex renewal terms and rigid user definitions.
Here’s how to negotiate Oracle SaaS deals with eyes wide open:
- Don’t Pay for Slow Deployments: A frequent issue in SaaS deals is paying for subscriptions long before you use them. Oracle will begin the subscription term once the contract is signed, regardless of the implementation duration, which may take up to a year. Align subscriptions with go-live dates. Negotiate a start date or ramp-up schedule so that fees begin when your users start getting value. For example, if you’re rolling out an Oracle ERP to 5,000 users over 12 months, consider a phased activation with 0% fees for the first 3 months or billing only 500 users initially, with the rest added as they onboard. Oracle might agree to a delayed start clause or a credit for the implementation period. If they balk, remind them that paying for unused SaaS is a deal-breaker for you. No CIO wants to explain to the CFO why they spent hundreds of thousands on “empty” subscriptions.
- Beware the Renewal Trap: The initial SaaS deal often includes a substantial discount or a fixed price per user. The real battle is at renewal after 3-5 years. Oracle’s standard contracts may include a renewal cap, such as a 4-5% annual increase limit, but these caps can be voided if you reduce your user count or modules. Bluntly put, Oracle gives itself leeway to raise prices if your footprint shrinks or even if it repackages products. Actionable advice: Negotiate the lowest possible renewal cap and ensure it applies regardless of modest changes in quantity. If you think you might scale down, include a provision that any price increase will be proportional, not an arbitrary increase. Also, avoid giving Oracle an easy excuse to nullify the cap – for instance, don’t massively over-purchase users now to drop them later. It’s better to start a bit smaller and add more users later than to cut back and invite a price hike.
- Protect Against Oracle’s Product Changes: Oracle has been known to rebrand or bundle cloud services. Today’s “Service Cloud” might become part of tomorrow’s “Customer Experience Suite” at a higher cost. Include language in your SaaS agreement to guard against Oracle swapping your product for a more expensive “successor” product mid-term. For example, if Oracle discontinues the service you bought and replaces it with a new one, you shouldn’t be forced to pay more for it during your term. Similarly, negotiate that new features or modules introduced into the product line you don’t need are not automatically included at extra cost. In short, no forced upgrades without consent.
- Usage Flexibility (Rebalancing): It’s hard to predict which SaaS modules or services you’ll heavily use in year 3 versus year 1. Oracle’s contracts are often inflexible once signed – you are stuck with the quantities per module. Push for a rebalancing clause: the right to shift investment from one module to another as needs change. For instance, if you purchased 1000 CRM seats and 1000 HCM seats, and later realize you need only 800 CRM seats but 1200 HCM, a rebalancing provision would allow you to transfer some of that value to HCM. Oracle might only allow this at renewal, but it’s worth negotiating if they want your SaaS business. It prevents waste and ensures Oracle’s solution can adapt to your evolving needs.
- Real-World Example: A mid-market company negotiating with Oracle Fusion Cloud Applications recalled a painful lesson from a previous SaaS vendor: they had over-bought and were stuck paying for unused licenses. This time, the CIO’s team did it differently. They negotiated a deal for 3,000 Oracle ERP Cloud users with a 12% discount off list and included a clause that allowed them to delay the start of 20% of those users until the second year (to coincide with a phased rollout). They also secured an agreement with Oracle to cap the renewal rate at 5% for two renewal cycles, with a mutual understanding that even if they reduced users by up to 10%, the cap would remain in effect. By pushing hard, they avoided the scenario of a big price spike in year 4. The Oracle sales team initially objected, but since the customer considered SAP S/4HANA an alternative, Oracle relented on several terms to win the deal. Key takeaway: Don’t be shy about raising every potential future issue (rollout timing, price increases, changing needs). It’s much easier to get concessions upfront when Oracle is hungry to close the SaaS sale than later when you’re locked in.
Read 15 Critical Insights for Negotiating Oracle Fusion Cloud Contracts.
Pitfalls in SaaS Deals:
- Signing overly long terms: A 5- or 7-year SaaS contract at a fixed price might sound like stability, but be careful. If technology or business needs change, you’re stuck, and if you need to cut back, you might pay for unused years. It may be better to sign a 3-year deal with strong renewal protections than a 7-year deal that becomes a burden.
- Ignoring data exit costs: Consider the end of the relationship. Oracle is unlikely to provide information on how to retrieve your data or what it might charge for extended data access after the contract ends. Negotiate data retrieval assistance as part of the deal, so if you ever leave Oracle SaaS, you can do so without exorbitant fees or hassles.
- Underestimating integration needs: Oracle SaaS may require additional Oracle PaaS services or middleware for complex integrations, such as connecting Oracle ERP Cloud with on-premises systems. Oracle could charge for those separately. Ensure that any necessary integration tools or services you expect to use are included or, at the very least, identified and priced. Don’t get caught off guard by a needed add-on after you’ve signed.
Oracle Audit Negotiations
Nothing makes a CIO’s blood run cold like an unexpected Oracle audit notice.
Oracle license audits (now often referred to as Oracle’s License Management Services or LMS, sometimes referred to as GLAS) are a strategic tool in Oracle’s arsenal.
They can lead to massive compliance bills, or, conveniently, a new purchase or cloud deal to “resolve” the audit findings.
Here’s how to handle audits in a tough, controlled manner:
- Control the Flow of Information: When you get an audit notice, Oracle will request a slew of data and even offer scripts to run in your environment. Don’t just open the floodgates. First, insist on a Non-Disclosure Agreement (NDA). Ensure that any information gathered can’t be used beyond the audit or shared inappropriately. Oracle’s audit team might be third-party consultants; an NDA protects your data from leaking to others, including your competitors. It also sets a professional tone – Oracle knows you’re taking this seriously and won’t be a pushover.
- Manage the Timeline: Oracle often chooses the audit timing to suit themselves (perhaps right when your Oracle rep knows you’re planning a renewal – audits tend to appear then). You have the right to negotiate the audit schedule. If the timing is unfavorable (e.g., your IT team is in the midst of a major project or a blackout period), consider rescheduling the start date. Oracle may allow a deferral of a few weeks or months. Use that time wisely: get your records in order, double-check your deployments, and consider engaging a third-party license expert for a quick internal audit. Once the audit is underway, set an acceptable pace – you don’t have to respond to every request within 24 hours. Be cooperative but not rushed. If Oracle sees you rushing, they might think you’re scrambling because you’re guilty of non-compliance.
- Understand Their Tools: Oracle’s auditors often use scripts to scan for installations and usage, including databases, Options, Packs, etc. You can and should request details on these audit scripts. What will they collect? How do they run? This is good for security (you need to know what’s being executed in your environment) and can reveal if the script might overcount or misinterpret usage. Some Oracle scripts have been known to flag features as “used” even if they are just enabled by default. If you know this, you can contest findings later. If possible, run the scripts in a test environment or under supervision to validate results before handing everything over.
- Negotiate Scope and Sampling: Oracle may request an audit of every Oracle product across your enterprise. You can attempt to limit the scope. For instance, suggest focusing on a particular business unit or a set of products first. Oracle may or may not agree, but it signals you won’t be blindly led. Additionally, if you have a large environment, consider a sampling approach, such as auditing a subset of servers or applications. While Oracle’s contractual audit rights usually allow them broad access, they might accept a phased or sampling approach if it still gives them confidence. Always remember, an audit is a negotiable process (if not, whether it happens).
- Challenge the Findings and Leverage the Resolution: Once Oracle presents its findings, don’t assume they are 100% accurate. It’s well known that Oracle’s audit findings are a starting point. They might claim you owe licenses worth $10 million. Often, this is a scare tactic to push you towards a “deal” – like signing a new ULA or moving to Oracle Cloud (a classic move: “If you commit to our cloud, we’ll waive these compliance fees”). You should scrutinize every finding. If Oracle indicates that an option or pack was used without a license, have your technical team verify whether that usage was truly necessary or an accidental activation. Often, features are turned on without being used – those should be removed from the bill. Negotiate the findings line by line if needed. Also, negotiate how to settle valid shortfalls: Oracle would prefer you purchase more licenses (and back-support fees). You have leverage here: they want to close the audit and book revenue, and you want to minimize cost. Perhaps you agree to purchase some licenses at a discount, sign a short-term ULA to cover everything, or even buy some OCI credits instead (which Oracle can position as a win). Don’t just cut a check for the initial amount; everything is on the table. Ensure that any settlement includes releases from liability for the audited period, so they don’t return for the same issue later.
- Stay Calm and Keep it Professional: Oracle audits can feel adversarial – Oracle holds the IP and contract rights, so they start from a position of power. But you can maintain a strong stance by being organized, factual, and unemotional. Prepare your team to interact with auditors in a controlled manner: designate one person or a small group as the point of contact. All communications should be documented in writing. If an Oracle auditor or rep makes a verbal claim or promise (“We won’t audit XYZ product” or “We’ll give you a 10% discount if you quickly resolve this”), immediately request that it be put in writing or send an email to confirm the understanding. This not only keeps Oracle honest, but it also allows you to proceed at your own pace.
Insider Scenario: A large tech company underwent an Oracle audit that revealed a multi-million-dollar shortfall due to virtualization. Oracle claimed that every VMware host needed to be licensed for Oracle Database, leading to a substantial compliance bill. The CIO’s team didn’t panic.
They refuted Oracle’s interpretation with data showing that VMs were pinned to specific hosts (to limit Oracle licensing). They involved their legal team to push back on Oracle’s contract interpretation.
Ultimately, Oracle significantly reduced the claim and purchased fewer licenses (at a heavy discount) to settle.
The key was not blindly accepting Oracle’s math and demonstrating their willingness to fight if needed.
Moral: Even in an audit, you have leverage if you know your contracts and technical environment better than Oracle’s team.
Oracle Support Renewal Negotiations
If you’ve been an Oracle customer for a while, you’re likely shelling out 22% of your original license costs yearly for support.
Support renewals are the silent budget killer, and Oracle counts on the fact that most customers pay annually without question.
However, a CIO can and should scrutinize support bills and negotiate more effectively.
Here’s how to approach Oracle support renewals with a critical eye:
- Understand Oracle’s Support Policies (and Gotchas): Oracle’s standard policy is that support is priced as a percentage of license fees (normally ~22% of net license price). However, if you ever drop licenses or lapse support, Oracle employs a practice called repricing to ensure it doesn’t lose revenue. In plain terms, if you drop half your licenses, they’ll often double the support fee on the remaining licenses, so you save nothing. This is Oracle’s saying, “Once on support, always pay in full.” Tactic: When negotiating a new license deal, aim to secure support fees and caps to ensure stability. For instance, consider negotiating a cap, such as “support fees won’t increase more than 3% per year for 5 years” (some customers receive this for large deals). Or if you anticipate possibly dropping some licenses later, negotiate upfront for the ability to reprice fairly. Oracle rarely budges on its formal support policies. Still, if you have a sizable spend or are purchasing new equipment, you may be eligible for an exception or a custom term. At renewal time, you can also ask for an overall discount on the support renewal – Oracle may claim “we don’t discount support,” yet there are cases where, under pressure, they gave a one-time credit or discount to retain a customer’s support business.
- Consider Third-Party Support – and Use It as Leverage: In recent years, third-party support providers such as Rimini Street and Spinnaker Support have given Oracle heartburn by offering Oracle products at approximately 50% of Oracle’s price. Oracle dislikes this (they have pursued legal action in the past) and will scare you with terms. Indeed, moving to a third party can have risks, such as losing upgrade rights and Oracle’s future support. However, if you have older versions you aren’t upgrading, third-party support can be a viable way to cut costs. Even if you don’t go that route, mentioning that you are exploring third-party support can get Oracle’s attention. We’ve seen scenarios where simply raising the possibility prompted Oracle to suddenly find a way to offer a concession on support pricing or include some free services to dissuade the move. Caution: Use this leverage only if it’s credible – Oracle will know if you need to stay on their support (for example, if you require future upgrades or your systems are mission-critical and you can’t risk non-official support). Still, as a CIO, you should regularly evaluate whether paying full freight to Oracle is worth it or if alternatives make sense.
- Bundle Support Discussions with New Deals: On its own, Oracle support is infamously hard to reduce. But when negotiating a new purchase or renewal of a larger agreement, that’s the time to address support costs. For example, if you’re about to spend on a new Oracle Cloud deal, negotiate relief on your existing on-prem support – perhaps a year of credit or a reduced renewal rate – as part of the overall package. Oracle’s reps can sometimes use “creative” methods (such as applying a larger discount on a new license purchase, which indirectly reduces the support base, or providing extra cloud credits equivalent to support costs). Essentially, you have to trade something; Oracle won’t cut support bills out of kindness, but it might in exchange for new business or commitments. Don’t be afraid to say, “We cannot justify this cloud deal to our board while we’re paying millions in support for unused licenses – Oracle, help us find a solution.” Make it Oracle’s problem to solve; you may be surprised that solutions emerge.
- Trim the Fat (Strategically): Many organizations accumulate unused Oracle licenses over time, often from old projects or downsizing efforts. Yet, support for those licenses continues to drain money. Oracle’s contracts make it difficult to drop support without losing license rights. Once terminated, you would have to buy new licenses at full price and pay for back support if needed again. A blunt strategy: If you are reasonably certain that certain Oracle products or licenses will never be used again, consider retiring them and accepting the loss of those licenses to avoid paying support. Yes, it’s painful to “throw away” a license, but it might be worth it if it saves you a big sum annually. Before you do, try another negotiation angle: tell Oracle you are considering canceling support on that chunk of licenses (meaning they lose that revenue entirely). Sometimes, this will prompt them to offer a smaller support footprint deal – e.g., terminate those licenses and Oracle agrees not to reprice the rest at a higher rate (essentially a concession) or they offer to replace those licenses with some newer products you might use (so your money at least goes to something useful). It’s a bit of a game of chicken: Oracle would rather keep you paying for something unused than nothing.
Real-World Insight:
A healthcare company paid several hundred thousand dollars a year for support on a suite of Oracle middleware that they’d largely phased out. For two years, they paid because “that’s just how it is.”
A new CIO came in and questioned it. They approached Oracle, stating that they would discontinue support for that product. Oracle’s account team initially reiterated the policy that the remaining support would be repriced, meaning there would be no savings.
The CIO held firm, prepared to lose the licenses. At the last minute, as the support renewal date approached, Oracle proposed a creative alternative: if the customer purchased a small Oracle Cloud package, Oracle would waive the repricing penalty on the remaining packages.
Ultimately, the company shifted funds to a $100,000 cloud pilot project (which the CIO wanted to experiment with anyway) and eliminated $300,000 in annual deadweight support costs.
This was an unconventional outcome, but it highlights that if you challenge the status quo and are willing to act, Oracle may be willing to negotiate.
Final Tips for Support Negotiations:
- Start Early: Don’t wait until a week before your support renewal is due (usually annually, aligned with your original contract date) to open discussions. Engage Oracle 3-4 months before negotiating or making changes. It takes time for them to get approvals on anything non-standard.
- Audit Your Usage: Ensure you’re using what you’re paying for. If not, formulate a plan (either to use it, drop it, or swap it). Data is your friend – showing that only 20% of a certain licensed product is in use strengthens your argument to reduce the scope or seek concessions.
- Be wary of “migration” offers: Oracle might offer to let you trade your on-premises licenses and support for cloud subscriptions (Oracle SaaS or OCI) as a relief. These can be enticing – you feel you’re not wasting support dollars because they’re converted to new services. Just ensure that the new services are truly needed and have favorable terms. It’s easy to jump from the frying pan of support fees into the fire of an overpriced cloud commitment. Evaluate it like any new deal (as discussed above in OCI/SaaS sections).
Read Oracle Contract Negotiation – Case Study: How an Insurer Saved 20% on Exadata Cloud@Customer.
Read Top 15 Tips for Negotiating GenAI Infrastructure Deals with Oracle.
Read more about our Oracle negotiation service.
