After working for Oracle for 13 years, I have been used to helping Oracle sales reps with their deals, but I didn’t expect them to still call after I left the company. Let me start from the beginning: at Palisade, we receive a lot of requests from clients asking for help. And this day was no different when this request came to us. It appeared to be a common request from a customer asking for advice on how to reduce their Oracle support costs.
I setup the call for introductions and to get an understanding of the customer’s challenge to see if it was something we could help them with. The call started as normal, when the perceived customer said, “I need to be honest with you, I am actually an Oracle sales rep, but I need your help!!!!”
Well, of course the conversation took a different turn as a result of their transparency. The rep proceeded to let me know about the challenges they are faced with as a result of Oracle support policies, and their frustration of not being able to help customers reduce their Oracle support spend.
The predicament here is the customer’s IT budget has not increased much. According to Gartner, CIO budgets on average have increased by only 2% YOY for five consecutive years. 89% of a CIO budget is already taken up by managing existing technologies or projects, and 11% is used to focus on new initiatives like digitization, so the CIOs need more focus on savings against existing tech spend to drive innovation.
This is a big problem for our Oracle rep: the CIO will see Oracle maintenance as probably one of the larger cost items eating their annual budget, but it’s not something Oracle will let go of easily, given its generating $19.2bn in revenue, with reported 95% margins.
The rep also only gets paid on new licence sales and support renewals are not part of their compensation package, so their only interest is selling new products to get paid, and the only way a customer is going to free up money for additional new technologies is to reduce their Oracle spend. However, for Oracle, reducing customer support spend in favour of new licences is not a priority. This is the circle of life for an Oracle sales rep.
According to the rep, as they are unable to help customers reduce their support spend, the rep is losing customers who now look at alternatives to Oracle, referencing IBM, Microsoft, AWS and Rimini Street as a way to reduce their annual costs, and take advantage of new technologies.
However, there are other strategies that can be implemented to reduce Oracle support spend, and we have been successful with navigating the maze, helping customers reduce their spend, and take back control of their relationship and costs with Oracle. In fact, we have developed 9 different strategies to reduce customer’s support costs. In practice, we’ve helped customers reduce their Oracle support spend by millions of dollars annually. I certainly wasn’t going to give the Oracle sales rep the map to the maze.