Negotiating with Oracle can be one of the most frustrating events a procurement, legal, or IT professional can experience. These negotiations are often rushed, filled with tension, and littered with threats from aggressive sales and Oracle LMS audit personnel. Simply put, when you think of all the things you love about your job, negotiating with Oracle is probably not on your list.
Oracle will apply time constraints
Oracle likes a frenetic pace where contracts are reviewed and dialogues happen under the constant pressure of Oracle’s quarter closes. This artificial time constraint lends an urgency to these negotiations and will often push a client over the edge to sign a deal prematurely leaving valuable terms unresolved and giving Oracle way too much money. While negotiating with Oracle may be daunting, it’s not impossible.
The good news is there is a right way to conduct these negotiations. Using Palisade Compliance’s negotiation best practices, you can significantly lower your costs to acquire Oracle products and services, while at the same time winning more advantageous terms and conditions.
Palisade Compliance has developed a comprehensive Oracle negotiation playbook that is far too extensive to cover in this short blog. However, we can give you one tip to help you on your path to negotiating the best deal with Oracle.
Force Oracle to negotiate up
This one goes against everything you’ve learned in negotiation school. Our advice is to go first in the pricing conversations. Don’t let Oracle come up with a price first. If you do, then Oracle will have established a baseline from which you have to move them off of. Remember, Oracle’s pricing is completely made up and subject to change. Oracle uses artificially high list prices to protect their support revenue stream. Their pricing is certainly not built on how much it costs to develop the software or cloud services. Letting Oracle set the first price in these negotiations puts you at an immediate disadvantage.
Rather then let Oracle go first and try to negotiate down, you should offer up a price you are willing to pay for the software or cloud services and force Oracle to negotiate up from there. Every additional dollar you concede to Oracle should equate to an additional concession you receive on terms and conditions. Better price. Better terms.
How do you determine a price? Well, what’s the value of the software or cloud service to your business? Do you have an alternative? What would it cost you not to buy Oracle’s products? These are all good starting points to determine a price. The key is that you pick a pricing methodology that is both defensible and to your advantage.
Companies deploying this Palisade Compliance pricing methodology, plus our other negotiation best practices, typically pay over 35% less for the Oracle products and services than companies who follow the traditional negotiation strategies. For more information on how Palisade Compliance can help your organization negotiate the best deal with Oracle, please reach out to us.