Oracle customers are constantly being sold to by Oracle sales reps. If you’re an Oracle customer, then you know the drill. These days, Oracle is selling two things more than ever. First is the Oracle ULA. Second is cloud@customer.
Clients ask for independent view on Oracle costs
Because Oracle is pushing these items, our clients are asking us about them more than ever. One thing our clients ask us all the time is to do financial modeling and multiyear cost projects. While your Oracle sales team constantly tells you that you can lower your cost with a ULA or cloud@customer, Oracle clients want the independent view on costs that Palisade Compliance brings to them.
With that being said, as we’ve been producing our financial models for clients, we’ve noticed something amazing. (Well, as “amazing” as things can get when you are talking about Oracle licensing and costs.)
We discovered that an Oracle ULA and cloud@customer contract have almost exactly the same financial impact on on your bottom line. They are literally the same thing when you look at them through a cost lens.
Examining the similarities between ULA and cloud@customer
An Oracle ULA and cloud@customer contract are both limited in duration.
For the purposes of this article, let’s say we have a 4-year ULA and a 4-year cloud@customer contract. Oracle likes it when you renew your ULA every four years. In fact, they want you to renew that ULA so much that they have inserted their aggressive and sales-focused LMS audit team into every ULA agreement. Below you can view the cost impact on a client who signs a ULA and then renews it a couple of times.
Now let’s do the same modeling, but this time for Oracle’s cloud@customer offering. Unlike the Oracle ULA, cloud@customer (in its current form) does not have a long track record, and there is no direct historic data from which we can extrapolate future costs. However, we do know that Oracle’s general track record with clients is 100% clear … charge them more money every year whether or not those clients use more Oracle or get more value from Oracle. In fact, Oracle will charge more money even when clients get less value from Oracle!
Using that as our benchmark, we’ve created financial models for clients and cloud@customer. Below you can see an example of what we believe it would look like if an Oracle customer signed up for cloud@customer and then renewed it a couple of times (the same parameters we used for the ULA model above.)
Two things jump out when looking at this chart. Firstly, your Oracle costs go up and not down. (Remember this when your Oracle rep tells you that your costs will go down with cloud@customer.) Secondly, the ULA chart and the cloud@customer chart are almost identical! Take a look side by side. It’s almost as if Oracle planned this intentionally.
Financial model similarities not accidental
Oracle doesn’t invite me into their planning and strategy sessions any more. (I wonder why?) However, I do know that Oracle plans out everything, and these financials are not accidentally identical. I am positive they are intentionally the same.
Oracle, like other technology vendors, wants the largest possible slice of your IT budget.
Oracle knows they can’t get it all at once, so what Oracle does it take over your budget in chunks. They have been extremely successful in setting up a business model where they lock you in technically and contractually, and then tighten the screws every few years to force you into another larger purchase.
With both the Oracle ULA and cloud@customer contracts, you are forced into an action every few years. Certify your ULA or move off cloud@customer. This event gives Oracle leverage to extract more revenue from you.
Simply put, if you are not prepared for these events you will give Oracle more and more money. Start preparing for these events as early as possible to minimize or avoid these Oracle cost increases. Obviously, we think Palisade Compliance can help you to be successful.