When we talk to clients about Oracle, the number one issue we hear all the time is how our clients are paying too much for support, how they get little if any value from that support, and how they are frustrated with how difficult it is to get Oracle’s fees reduced. Well, I’m sorry to say that Oracle is trying to make it even more difficult for you to get out of their support contracts.
Historically there was no notice period required to terminate your Oracle support contracts. You simply stop paying your bill, and Oracle would stop supporting you. However, in the last year or two Oracle rolled out their “Auto Renew” strategy and customers are now feeling the pain.
Oracle’s Auto Renew Strategy is simple. Rather than sending you a new support contract and waiting for you to send Oracle an invoice to activate the new year’s contract, Oracle will now automatically renew your support unless you opt out 32 days prior to the end.
While Oracle claims this change is an effort to avoid customer pain of going without support for a few days, it’s really a money grab to lock you in and increase Oracle’s margins. Remember, Oracle support margins are already around 94%. How much higher can they go? Well, Oracle thinks there is room for improvement.
Oracle is implementing this change in phases. It appears, however, they are ramping up their efforts as more and more clients are seeing “auto renew” language in their support contracts. Many customers have no idea it’s in there. One client called Oracle support to protest the auto renewal and, according to that client, Oracle admitted their rollout has left many customers fuming.
What can you do to avoid this trap?
First, check your current support contracts from Oracle. Look to see if they say your support is being auto renewed OR if they say next year will be auto renewed. If either is present then you must log into your Oracle support account and opt out of the auto renew program. You can also call your Oracle support rep (while you still have one) and have them take you out of the auto renew program. Second, carefully check all new support contracts that come in from Oracle. For example, if you have a support contract that expires in May 2018, you probably have your renewal letter from Oracle. Read it carefully and see if it says whether you will be auto renewed. Again, if that’s what it says, you should call your Oracle support rep immediately and have that changed.
Why It’s Important To Opt Out Of Auto Renew
Many Oracle customers will undoubtedly renew their support contracts with Oracle and continue paying Oracle’s fees without much hesitation (yes, it’s true). Even for these Oracle loyalists, it’s important to opt out of the auto renew program. The reason is simple. When you are in Auto Renew you lose all your leverage with Oracle. You are giving power to Oracle and you lose control. You lose the power to negotiate your fees with Oracle. (Yes, it is possible to negotiate your fees with Oracle!) and you lose the power to hold on to your money should you decide to renew later and pay Oracle their fee at a later time. Why would you make it easy for Oracle to take your money? You should make Oracle, and every vendor you work with, earn your loyalty, your business, and your money every single year. Oracle’s Auto Renew program allows Oracle support to get even lazier in the level of effort they must exert to get your business. Make them work for it.
Now, if you are an unsatisfied Oracle support customer and looking to third party maintenance providers to give you better support at a fraction of the cost, then the auto renew clause is something you need to manage around as you move away from Oracle support. Many of our clients use Rimini Street for third party maintenance and seem quite satisfied citing better quality of support, half the price, support for all custom code included, and no forced upgrades just to stay supported. A simple review of your Oracle support contracts will determine the best path forward. The Oracle auto renew program is just a speed bump in your move off Oracle support and, if properly managed, will not prevent your move.
At Palisade, we help our clients take back control of their Oracle business relationship. If you have any Oracle licensing, contracting, compliance, negotiation, or audit issues, please contact us for consultation. In a little more than 6 years we empowered over 300 clients around the world to spend less with Oracle, achieve compliance, and take back control.