When Oracle released their new (or not so new) program to offer credits on support contracts on June 22nd, a lot was left unsaid. One could question that the migration of dollars is heavily weighted towards Oracle and not the client. After all, Support is Oracle’s bread and butter – a whopping 96% profit! So why give up such a lucrative cash cow? Is it the need to capture more cloud dollars to pad financial statements? Is it to further hold hostage unused support dollars so they cannot be cancelled?
Cloud is a particularly prickly subject for Oracle – Client adoption hasn’t been without issue as documented with aggressive sales tactics and using audits to generate cloud revenues. Clients have a ton of options with 3rd Party Cloud and Oracle is feeling the heat from this competition. SLC’s prospective, Oracle’s program is not new in the sense that Oracle has offered such concessions in the past in different forms including License Shelving and License Terminations without penalties. Just like these older programs, the support credits most likely go away if you switch from Oracle to another cloud provider. Is this really a good incentive for a client? In the example of the ULA client, is it really “saving” $500k in support costs if you have to purchase $1.5 M in net new cloud offerings? What happens when that ULA comes up for renewal? If the customer cancels, does that credit go away or are they locked in?
There are a lot of questions here that would need to be answered before anyone could claim it is a good deal for the clients. At SLC, we prefer to help clients cancel unused licenses and get out of the yoke that Oracle puts on clients with ULA’s. This offers clients an immediate savings versus simply an exchange of one cost for another higher one! It will be interesting to follow along here as clients evaluate the cost/benefit of the cloud credits and whether or not it truly saves them money.
