Oracle is an expert at adapting their policies and practices to counter customer ‘conventional wisdom’ in contracts and procurement.
Conventional wisdom is to consolidate purchases for maximum leverage in pricing discussions. Oracle ‘enables’ this by offering big discounts that satisfy both IT and procurement executives. The gotcha? Unbalanced terms and conditions provided mere hours before a signature is required, along with undisclosed internal policies that cost you far more later when your business requirements change.
Where conventional wisdom is to review existing contracts 30-60 days before expiration, Oracle’s policies for certifying (exiting) an Unlimited License Agreement (ULA) make this very late to begin the complex process of counting software. As a result, many customers renew or extend their ULAs, increasing their costs without benefiting from better contract terms or a wider license grant.
Finally, where conventional wisdom is that everything you need to manage a vendor relationship is on your team, think again. Oracle is very complex (often on purpose), features business units working at cross purposes, and can demonstrate an unusual indifference to being cooperative with customers. This means that a contracts or procurement group has to be very careful about the advice coming from this vendor. Even if you just dealt with Oracle a year ago, Oracle adapts to stay ahead of the conventional wisdom – especially when they are under sales pressure.
The parallel we always encounter from clients is between Oracle and the U.S. Internal Revenue Service:
- Neither is particularly reliable when it comes to advice; if one part of the organization tells you something (sales) it does not bind another department (LMS).
- Both tend to interpret the rules to suit themselves at any given moment and put the onus on customers to prove them wrong.
- Both seem to enjoy the reputation of uneven playing fields and tension with customers.
In both cases, it makes a lot of sense to get independent advice before any dealings with them. With the IRS, it is your accountant. With Oracle, it makes sense from both a technological and contractual point of view to get expert advice from an independent party who has your interests in mind.
Oracle will remain the expert at making money from the conventional wisdom game. Your goal in 2016 must be to change the game with them, taking control and countering their game. The savings will be worth it!