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Oracle Licensing - Some Common Pitfalls to Avoid

Thought-Leadership by Eric Guyer
on June 23, 2015

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Innovation comes in many forms. For example, some of Oracle’s most ingenious features have little to do with software. Rather, Oracle’s Technical Support Policies are arguably responsible for the publisher’s dominance. Much has been written of these policies, so the purpose of this post is not to explain them, but to warn unsuspecting customers of a couple associated pitfalls.

Anyone who has tried to remove shelfware (entitled software that is not in use) from an Oracle software support contract has seen these policies in action. The frustrating result for Oracle’s customers is the disconnect between the fees paid for software support and the value received in return. As a side note, it doesn’t help that Oracle touts that its software support business is operating at 89% profit margin; after all, where else do companies spend money that provides only 10 cents on the dollar in return?

Beware of intriguing discounts. They may not equate to value.

The four technical support policies of License Sets, Matching Service Levels, Reinstatement, and Pricing following Reduction (aka Repricing) embody the aforementioned revenue-capturing innovations. However, these four policies represent the Venus flytrap of operational expense. Lured by deep discounts on high list prices, customers unwittingly fall prey only to realize later—sometimes years later—that they are trapped. Therefore, the first pitfall is believing that discount percentage equates to value. Ultimately, it is better to pay lower discounts on software you are using than higher discounts on shelfware, assuming equivalent renewal fees, of course.

Control your own licensing destiny.

Another pitfall is allowing Oracle to roll legacy support streams together, as is infamously the case with Unlimited License Agreements (aka ULA). There are other situations where Oracle rolls legacy CSIs together, but ULAs are the most common example that most will be familiar with. The point is, it’s a bad thing to do for long-term flexibility’s sake. Oracle’s technical support policies revolve around the modern list license value of individual Customer Support Identifiers (CSIs), which are the unique identifiers of original license orders. Consolidating multiple CSIs forfeits their identity and eliminates the flexibility to save money later when subsets of software are no longer needed.

What you can do to ensure you don’t get trapped by inflexible terms!

There are several approaches you can take to ensure you achieve the greatest value from your Oracle investments:

  • Understand the true value of how much you are spending with Oracle before considering additional purchases.
  • Assess how appropriately the entitled products, metrics and quantities map to business requirements.
  • Ensure common compliance risks have been mitigated.
  • Discover how the software is being utilized at a technical and functional level, including medium and long-term plans.
  • Deploy an effective SAM strategy that ensures proper value within the software spend.

Of course, covering the above points can be a monumental task if you have neither the time nor the expertise. If you would like help discovering how you can receive the most value from your Oracle deployments, click the banner below to schedule an appointment with a SoftwareONE Licensing Specialist.

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