Re[2]: Oracle Arm Twisting?

Tim,

    From our recent wrangling with Oracle Support. First off there is the Support Sales folks who are absolutely idiots. Change as little with these folks as you absolutely have to. And double check any quotes they send you, most will not add up the first few times around. Also these folks are not all that upset about de-coupling upgrade and tech support, though when you want back on tech support they will very happily add in the "re-instatement" fee which equals what you should have paid, but didn't. Thankfully you only have to talk to these folks once a year.

Next are the actual support folks at OTS. Now I know we all like to bash these people around, but in the end they are some very good people there right now. Once you've got your CSI, get onto MetaLink & make heavy use of it, I do & I believe it's worth the price you pay. Around 90% of our problems are solved by a scrounge around on MetaLink, the last 10% need an iTAR & I kinda like the iTAR process, it's definitely faster than the old phone support. Although I like the list and do cull that occasional pearl from it, I also make heavy use of MetaLink.

Dick Goulet

____________________Reply Separator____________________
Author: "Tim Gorman" <Tim_at_SageLogix.com>
Date:       8/14/2002 8:53 AM

Some background info on support pricing...

For the RDBMS and related database products, support pricing is based a percentage of license pricing. Generally, "perpetual" licensing means just that (i.e. forever), while 2-year lease pricing typically comes at 35% of perpetual licenses and 4-year lease pricing typically comes at 60% of perpetual licenses. Perpetual, of course, really means "until we need to renegotiate for some reason" instead of "forever and ever". Regardless of whether you purchase a perpetual license or 2- or 4-year leases, you pay for Support based on the price of a perpetual license, and that's an important point...

There are two components to support: "upgrades" and "tech support". The right to get automatic upgrades during the term of the license is priced at 15% of a perpetual license while the right to log TARs and use MetaLink (i.e. get a CSI number) is priced at 7% of a perpetual license. Together, this is 22% of a perpetual license. You really can't get rid of the "upgrade" piece of support (i.e. the 15% portion); as far as I know it is not optional. But the "tech support" piece (i.e. 7% portion) is optional and can be split out, if you wish. Of course, Oracle is very resistant to this and will fight like crazy against it, but I'm pretty sure that it is still an option...

I imagine that licensing for Apps R11i modules is priced somewhat different -- I believe it is still based solely on numbers of users, instead of the "CPU" and "power-unit" pricing options offered for the RDBMS and related database products. Still, I think support pricing is still based on a 22% share of the license price, which keeps the discussion relevant.

So, support pricing will only change if your basic licensing changes -- ongoing support costs are pegged to the upfront license costs. Cancelling and restarting perpetual licenses does not pay in this situation -- you only want to pay that upfront cost once if you can, if you have purchased a perpetual license. Going with the 2-year lease can be cost-effective (if pricing stays relatively the same) for roughly 5-6 years (i.e. 2-year lease is 35% of perpetual license), so that is one option that gives you 2-3 tries to adjust or fine-tune your base licensing (along with associated support costs) before you "lock in" by buying perpetual. But many Oracle sales folks won't even mention the 2- or 4-year leases as an option; they'll just pretend it doesn't exist because the "perpetual" option is easier to administer...

---

Yep, it's a whole lot of number-juggling and I could be just plain wrong or
out-of-date on these numbers, but that's my understanding of the money
issues...

----- Original Message -----
To: "Multiple recipients of list ORACLE-L" <ORACLE-L_at_fatcity.com>
Sent: Wednesday, August 14, 2002 9:33 AM


Maintenance cost is much less to the purchase cost, but how can a company
force us to renew the support contract? I'm ready to live without the
support
because I have not implemented a few modules. Does that mean that either we
have to pay the support price till the time we decide to start using the
modules(and every year thereafter too), or will have to buy it again?

Naveen

-----Original Message-----
Sent: Wednesday, August 14, 2002 8:24 PM
To: Multiple recipients of list ORACLE-L


Keep in mind, you end up having to pay the purchase price again. So
yes, the maint cost goes down, after paying the new inflated setup
cost.  We looked at the "let it expire" approach carefully...


John P Weatherman
Database Administrator
Replacements Ltd.



-----Original Message-----
Sent: Wednesday, August 14, 2002 10:09 AM
To: Multiple recipients of list ORACLE-L




-- John Weatherman <john.weatherman_at_replacements.com>



> Naveen,

>


> I can't say if it's a global policy or not.  However in my last life,

> we initially purchased ALL modules assuming about 2000 users.  We ended

> up with only a handful being implemented and closer to 600 users.  Oracle

> pulled the same "you can't reduce licensing" stunt with us.  Of course

> I'm sure they will be happy to sell you more licenses the second they

> think you have 1 extra user.  In general, its probably best to always

> get the absolute minimum number of licenses you think you can get by

> with.

>


> Sorry I can't be more encouraging,


Cancel the contract and renew it with a different number
of users. Once the old contract has expired and is no
longer in force you are not "changing" the number of users
since it is a new contract. It may be that playing hardball
is the only way to get their attention.

--
Steven Lembark                               2930 W. Palmer
Workhorse Computing                       Chicago, IL 60647
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