Oracle renewals: The myth of the Oracle May spend?

Author: Robert Lamb, Oracle Practice Head, Livingstone Group

May, Oracle’s year end, is commonly considered to be the best time to renew contracts with the vendor, with deals and discounts being offered across the board. But this year, as May draws near, maybe it is worth taking the time to reflect before rushing into signing any contracts.

Last year we wrote about how to navigate Oracle's renewals season, explaining the importance of starting negotiations early. This year, we’ve decided to expand on this idea, and in this blog, we’ll take you through why it may be beneficial to your organization to negotiate your contracts with Oracle at different times throughout the year, not just in May.

 Use your time wisely

I often consider Oracle and May year end as equivalent to retail’s Black Friday in November, where people race to take advantage of “heavily discounted prices”. However, although Black Friday is often lauded as the best time to secure unrivalled consumer deals, it’s been frequently proven by financial experts that this is far from the case. Prices might not be what they seem at face value. Could the same be said for Oracle and May? Like Black Friday, we see equivalent discounted deals for Oracle at other times of the year, so how good a bargain is your organization really achieving in May?

Through lack of preparation and being in a hurry to take advantage of the perceived May deal, we often see organizations caught short, finding themselves with unsuitable and unoptimized contracts. Instead, organizations should take time to contemplate the suitability of any deal presented. Proceeding with caution and spending time to secure the best deal – even if this means missing out on May deals – could lead to significant savings in the long term. In addition, although price is important with Oracle, going forward it’s absolutely crucial to consider the contract terms & conditions and future contract flexibility

Preparation is key to successful Oracle negotiations. Every organization has specific product and license requirements, as well as unique contract terms and conditions. It takes time to put a fully optimized Bill of Materials (BOM) together, not to mention how lengthy it is to get a contract approved and signed on both sides – no more so than for Oracle. Indeed, last-minute contractual clauses are notoriously difficult for Oracle to execute, leaving organizations with a “take it or leave it” deal based on price.

For an optimized deal with tailored requirements, combing through contractual details is a slow process, often with delays along the way. To ensure that you’re not rushed into a deal that could prove problematic further down the line, it’s imperative to start preparing ahead of time, starting with a strategic approach. Otherwise, your business could suffer lasting effects, being tied to an expensive and suboptimal contract for several years.

Unnecessary add-ons

During Black Friday, or any other retail sales event, shoppers are often pressured into buying items that they didn’t necessarily set out to purchase, but still leave with the impression they secured a good deal. However, these needless products typically end up untouched. I have seen many unused products on an Oracle Enterprise Agreement, including products purchased twice over because a parent product contains the same functionality.

Crucially, these decisions can end up costing hundreds of thousands of dollars a year for tools employees will never use; costs which will carry over for the entire contract length. Most Oracle procurement personnel have experienced the pain of trying to remove such items from an historic contract with Oracle’s support “re-pricing policy”.

On your terms

I do not need to remind customers that buying Oracle is a multi-year commitment. If you are ready and prepared, then by all means strike a deal in May. However, if you are not, then think clearly about the specific needs of your business, including the timescales. Negotiate the best terms to ensure that your business has the best future flexibility.

One thing that I know is certain, in my last 22 years in the Oracle sphere, the opportunity to do a deal on price has never faded. But sadly, what also never goes away are the inappropriate contracts which require further Oracle spend in order to re-structure and meet current business needs.

 To find out more, Livingstone’s experts are on hand to help you navigate the twists and turns of all matters Oracle. Find out more about our services visit our new website at www.livingstone-group.com.

About our Author

Robert Lamb, Oracle Practice Head, Livingstone Group

Rob is passionate about Technology and Licensing and has dedicated the past 20 years working with Oracle customers.

During the last 10 years Rob has supported clients to manage their Oracle Application & Technology License as well as consulting on contract negotiation, cost optimisation & Audit Protection. Rob has experience in working with over 250 Oracle customers worldwide