A Rimini Street White Paper. Procurement s Lead Role in Reducing Oracle Database Spend

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1 A White Paper Procurement s Lead Role in Reducing Oracle Database Spend

2 About, Inc. is the global leader in providing independent enterprise software support services. The company has redefined enterprise support services since 2005 with an innovative, award-winning program that enables Oracle and SAP licensees to save up to 90 percent on total support costs. Clients can remain on their current software release without any required upgrades for at least 15 years. Over 1000 global, Fortune 500, midmarket, and public sector organizations from a broad range of industries have selected as their trusted, independent support provider. and the logo are trademarks of, Inc. All other company and product names may be trademarks of their respective owners. Copyright All rights reserved. LT-US

3 Executive Summary Database customers and industry analysts agree that Oracle maintenance costs are out of control. Customers are satisfied with their Oracle Database but frustrated with the insufficient value and limitations of Oracle s support policy. Today, independent support offers a proven option: hundreds of world-class organizations have already made the switch to independent support and are investing the money saved in strategic innovation and retaining headcount at risk of loss due to budget cuts. IT procurement professionals have unique responsibilities and accountability to the companies they work for and this puts them in a pivotal position of leverage in terms of driving cost-saving initiatives such as independent support. Independent support offers an unusually attractive value proposition: Rimini Street, for example, takes your Oracle invoice for annual support and cuts it in half, while offering the most ultra-responsive support services in the industry. ( engineers are senior-level only, with an average of more than15 years of experience; average response time to critical support issues is less than five minutes, 24/7/365, anywhere in the world.) This white paper is designed to answer the following questions: How can I get better value for my support dollars? Procurement professionals need to understand what it actually costs to keep their Oracle Database maintained and supported. How is independent support different from Oracle support? We ll highlight the contrasts between the old, obsolete vendor support model and the innovative, disruptive independent support model in terms of focus, cost model, support coverage, delivery model, upgrade philosophy, innovation, and strategic flexibility. How can I find out more about independent support? We ll help you outline your next logical steps as you continue your research to determine whether independent support is a good fit for your company. 3

4 The Database Maintenance Value Gap Rock Solid Database but High-Cost Insurance With more than 320,000 customers, Oracle Database is universally recognized as the leading database even among SAP customers. It is mature and stable and more than supports your business requirements. There are typically few issues, and so support tickets with Oracle are relatively rare. However, you still need insurance for those infrequent instances when something does go wrong but why pay a huge premium for it? Unfortunately, critical IT dollars continue to be squandered on maintenance fees accounting for 33 percent of the entire software budget. E-Commerce Times Database Maintenance Costs Are Out of Control Estimates by analysts vary, but with as much 87 percent 3 of the average IT budget spent on maintaining current operations, procurement professionals are rethinking enterprise software maintenance strategies. Annual maintenance fees have been under intense scrutiny, with fees taking an increasing bite out of already tight IT budgets. Ongoing costs associated with Oracle are particularly well known to be difficult to address. Independent Support Offers a Proven Option This significant value gap is driving procurement managers to look at alternative software maintenance strategies. The cost savings alone from switching to independent support often more than a 50 percent annual cost savings compared to Oracle s annual support fees is usually substantial enough to justify the move. Furthermore, the elimination of upgrade-related costs and the addition of premium support program features at no extra cost such as ultraresponsive service and support for customized code can drive the cost saving even higher. Hundreds of World-Class Organizations Have Already Made the Switch to Independent Support Today, hundreds of enterprise software licensees are declaring their freedom from vendor agendas by choosing the database support provider that best fits their needs. Hundreds of clients, including global, Fortune 500, midmarket, and public sector organizations from across a broad range of industries have selected as their trusted, independent support provider. Independent support closes the maintenance value gap by delivering the disruptive value equation: 50 percent savings plus premium service. 3 Gartner, Gartner IT Key Metrics Data, 2014 IT Enterprise Summary Report, January 31,

5 Reducing Out-of-Control Maintenance Costs with the Independent Support Model Oracle Database Client Snapshot: The Valspar Corporation Industry: Chemical Manufacturing Revenue: $4 Billion Employees: 9,800 Databases: Oracle 10gR2 EE/SE + Partitioning, Essbase Plus Applications: EBS , Oracle Transportation Management Valspar selected to support its Oracle Technology and applications and reduce its support costs by 50 percent. Expert diagnosis of performance problem areas, root cause analysis, and action plans to restore system performance at no extra charge are a huge benefit for Valspar as its system usage grows. s value proposition becomes very strategic, almost invaluable. In terms of value add, it s not incremental, it s not additive. It s a multiplier effect. An order of magnitude. When procurement managers run the numbers and become aware of their total support costs under Oracle annual support, they are often motivated to pursue less costly alternatives such as independent support. Indeed, in recent years a steadily increasing number of customers, analysts and industry commentators has been questioning the value and fairness of the traditional vendor support model for example, one observer has called that model broken. 5 Why? Read on. 87% Ongoing Operations and Enhancements IT Spending Categories* 13% Business Transformation Initiatives *Gartner, Gartner IT Key Metrics Data, 2014 IT Enterprise Summary Report January 31, 2014 Tom Grooms, CIO, Valspar 5 The packaged software maintenance model is broken. Don t reward software vendors for it by staying on their upgrade treadmill at their arbitrary 18 or 22 percent a year of software license value. Vinnie Mirchandani, Deal Architect, September 26,

6 Upgrades. A recent Oracle Application User Group (OAUG) customer survey demonstrated that 73 percent of customers are upgrading just because support for their current release was ending not for new features or capabilities. 6 With independent support, you can run your current releases for 15 years or longer, upgrading only when it makes sense for your business. And if you re not on the very latest release, you can take possession of it now and upgrade down the road. Technology Support Services. Independent support from includes Technology Support Services that provide guidance around best practices, configurations and hardware at no additional cost. This helps you ensure interoperability, security and optimal system performance. Flexibility. Independent support helps keep your future strategic roadmap options open. How? Every upgrade you deploy may further lock you into your technology stack offerings. Not only can this cost you budget, but it may also severely limit your flexibility down the road in choosing the next-generation system that best fits your needs. 6 OAUG Research Line, ERP Upgrades: What s Your Philosophy? 2012 OAUG Survey on Enterprise Application/ERP Suite Upgrade Strategies, February, 2012, pp. 11, 16. 9

7 Key Reasons For Choosing Independent Support Explanatory Notes Check If This Applies To You You want to reduce costs. You want to better align cost with value. Your database is stable and mature. You want more responsive, personalized service. You want to cut operational costs and make more funds available to meet tighter IT budgets and/or retain current headcount. You need to free up funds to invest in strategic IT projects. You don t use Oracle database support enough to make it worth the high cost (for example, you might call Oracle for help only a few times per year if at all). You believe your database support fees are high for the level of support you are actually receiving from the vendor. Your database s high level of availability and reliability is meeting your business and operational needs. You want faster response defined in SLAs and direct access to senior engineers who already know your environment; and you want your specific issues addressed. You spend too much support time with lower-level responsive, technicians, sometimes outside your working hours. You don t want to be forced to upgrade. You want to avoid Oracle-imposed penalty fees. You would prefer a full service, personalized support experience instead of a self-service model through a web support portal. You plan on staying on your current database release for an extended period of time. You may want to upgrade to the new releases available, but at your own pace, along a timeline of your own choosing. You are nearing the end of the Premier phase of your Oracle support and are faced with a price increase for Oracle Extended Support. Interpreting Your Results The more check marks, the more formidable business case you can build and champion within your organization for making the switch to independent support. 11

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