Beware of Oracle’s Support Renewal Strategy

When we talk to clients about Oracle, the number one issue we hear all the time is how they are paying too much for support, how they get little if any value from that support, and how frustrated they are with how difficult it is to get Oracle’s fees reduced. Well, I’m sorry to say that Oracle’s support renewal approach is making it even more difficult for you to get value out of their support contracts.

Two support renewal practices to understand

Oracle has created two practices that you need to understand as you manage your Oracle support spend.  The first is a mandatory notice period to cancel your support contract. The second is an auto renew program that will bill you unless you cancel. Both practices have been implemented by Oracle in recent years, and neither practice is good for you.

1. Mandatory notice period

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. That all changed with Oracle’s notice provision. Check your support renewals carefully. You may have a notice period that you accepted online.  Typical notice periods are 56 days, but they can range from 30 days to 90 days depending on your contract.  Failure to notify Oracle in time will cause you problems. An administrative error on your part can cost you millions of dollars. Yes, we’ve seen Oracle enforce this provision!

2. Auto support renewal

Added to the notice provision is Oracle’s auto renewal program. 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 in time.

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 has implemented this change sporadically. First trying to push it out to everyone through an opt-out program, then after customer backlash, moving to an opt-in program. It appears, however, they are ramping up their efforts again. It is important you take care in understanding exactly what you’re accepting as you scroll through Oracle’s contract acceptance regime.

What can you do to avoid this support renewal 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 2022, 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 renewals

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.

How Palisade Compliance can help

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 third party (or independent) maintenance providers 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 review of your Oracle support contracts by Palisade Compliance along with a discussion of your strategy and pain points can determine the best path forward.

Palisade Compliance has helped companies reduce their Oracle support fees and optimize their Oracle support contracts. We helped one client stay with Oracle support and reduce their fees by $21 million! If, however, you’re looking to move off Oracle support and on to a third party support provider, we can help in that transition as well. Contact us today for a free consultation.

Find out more about our services to help you manage your Oracle support spend.

Craig Guarente
Craig Guarente
Craig is the CEO of Palisade Compliance, which he founded in 2011. Before 2011, Craig worked at Oracle for 16 years where he was the Global Vice President of Contracts, Business Practices, and Migrations. He was also the Global Process Owner for Oracle’s audit teams (LMS), a member of Oracle’s CIO advisory board, and on the Oracle User Group’s contract and licensing advisory board. Craig is now the leading expert on Oracle licensing, is quoted in dozens of publications, and assists with many high-profile Oracle disputes.
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