Shaun Forshey, Vice President, Customer Success
On Tuesday, June 22, 2021, Oracle made media waves by announcing the launch of its Oracle Support Rewards program. As a provider of alternative Oracle support, we were naturally interested in determining what this new program was and how it would impact Oracle customers and the support market. Here’s our abridged breakdown of what it all means.
What is Oracle Support Rewards?
Put simply, as you pay out cash on Universal Credits for Oracle Cloud Infrastructure (OCI), you earn discount credits that you can apply to offset what you are paying on your annual support for on-premise Oracle technology. As Oracle says on its site:
“With Oracle Support Rewards, the more that you use Oracle Cloud Infrastructure (OCI), the more you save. Customers earn $0.25 to $0.33 in rewards for every $1 spent on OCI. Then apply those rewards to reduce your tech software license support bill, even down to zero.”
Here’s an example: Customers who migrate $400K of workloads to OCI could eliminate an Oracle technology license support bill of $100,000. The math gets better when you add in volume discounts. And customers with an Unlimited License Agreement (ULA) get the 33% discount.
Sounds pretty appealing. Who doesn’t love a discount on the already expensive Oracle support fees? But this isn’t a new deal, really. For years, Oracle has negotiated using cloud credits this way. So what has changed?
Why has Oracle launched the program?
You might be inclined to think that this program is meant to steal business from third-party Oracle support providers, but that is really not the case. What has changed is Oracle’s amped up eagerness to attract or retain the cloud business of its existing customers before they are drawn away to rivals such as AWS and Azure.
Oracle wants and needs the cloud market share and aims to lock customers into their cloud for the foreseeable future. A short-term loss in on-premise software support revenue, which has a tremendous margin of around 90% or more, will eventually be offset by your ongoing investment in OCI. Oracle is banking on the fact that you can run any on-premise software you like on OCI, so you may be paying them more for software that won’t earn you support credits.
A few of the facts you should know about Oracle Support Rewards:
- It only applies to on-premise Oracle Tech License Support fees, not for Oracle applications or third-party technology products.
- Support Rewards does not apply to Oracle’s SaaS products, which run on OCI.
- The credits can only be applied to pay for any “open invoice” for technology support fees.
- You must first use OCI to accrue the support rewards, which come monthly. Only as you use OCI do you get the discounts, which you can track on your OCI console.
- The rewards are only valid for 12 months from the date they accrue.
- The program can be combined with other support programs that convert application support bills to cloud application subscriptions (Customer to Cloud), provide universal credits for OCI discounts, enable license portability, and support cloud migrations (Oracle Cloud Lift).
So who most benefits from Support Rewards?
- Your organization is committed to Oracle and its product strategy over the long term.
- You are already using OCI and want to move more software to it.
- You are considering a move to the cloud and are open to using OCI. Oracle is hoping to foster that interest with this program.
How can you find out more?
Visit the Oracle rewards site to read their terms. Then check out the blogs and websites of firms that specialize in Oracle licensing and compliance. Everyone is talking about this program (exactly what Oracle wants), and many of the best analysts are breaking down the pros and cons.
Don’t see your future on OCI? Then let’s talk.
The whole Oracle Support Rewards program is predicated on the notion that you want to invest in Oracle cloud for the medium or long term. If you do not, then Oracle’s new “buy this for discounted that” model won’t help you reduce your annual support fees for on-premise Oracle technology.
But what if you still yearn to reduce your annual Oracle support fees for technology and applications? Then it’s time to check out Spinnaker Support, a viable alternative that not only saves you 50% or more on support fees but improves the overall quality of support through live engineers that cover a wider range of issues. Reward yourself and contact us today for a conversation.