1. Webinar Oracle Licensing And Negotiation Trends And Best Practices
Duncan Jones, Vice President, Principal Analyst
March 10, Call in at 10:55 a.m. Eastern time

2. Work within Oracle’s business model — don’t try to fight it.

3. Agenda
Understanding Oracle
Maintenance renewals
Software license optimization
Oracle Unlimited License Agreements (ULAs)
Summary and recommendations

4. Agenda
Understanding Oracle
Maintenance renewals
Software license optimization
Oracle Unlimited License Agreements (ULAs)
Summary and recommendations

5. Oracle’s profits come from support
SALES AND MARKETING IS THE LARGEST EXPENSE CATEGORY
Source: Oracle

6. Oracle closes 40% of its sales in its Q4
Source: Oracle

7. Oracle’s maintenance revenue growth is stalling
Oracle’s maintenance renewal rate appears to have fallen in the last three years.
Source: Oracle

8. Oracle wants you to buy all its stack
Your leverage comes from the products you might buy, not from what you already own or will definitely buy.
Image source: Oracle (

9. Oracle is now embracing the cloud
Increased focus on “bookings” may force it to change its commercial approach.
“Our billion dollar SaaS business delivered overall bookings growth of 35% in the quarter,” said Oracle CEO, Larry Ellison. “Our fastest growing cloud services were Fusion Human Capital Management and Fusion Salesforce Automation, each growing bookings at a triple-digit rate.”
Source: “Oracle Reports GAAP EPS Up 5% To 56 CENTS, Non-GAAP EPS Up 7% To 69 CENTS,” Oracle press release, December 18, 2013 (
Oracle will have to offer cost flexibility if it is to compete in the XaaS business.

10. Navigate around Oracle’s sales silos
Oracle’s sales organization structure can be frustrating for sourcing professionals.
Focus on the rep who will get the most from your deal.
Make some useful contacts outside sales.
Escalate within Oracle as high as possible to someone with pan-product responsibility.

11. Agenda
Understanding Oracle
Maintenance renewals
Software license optimization
Oracle Unlimited License Agreements (ULAs)
Summary and recommendations

12. Use Forrester’s strategic software sourcing model
Optimized commercial approach
Price, flexibility, risk
Supplier tiering
Do we want to buy more or reduce our dependence?
Category strategies
Sole or multisource?
Standardization versus autonomy?
Supplier’s portfolio
Opportunities and threats
Commitment versus uncertainty
Source: Forrester’s The Strategic Software Sourcing Playbook

13. Map Oracle’s portfolio to your strategy
EXAMPLE FROM COMMUNICATIONS INDUSTRY CLIENT
What is your sourcing strategy for each of these categories?
Image source: Oracle (

14. Put maintenance in a strategic context
Identify a salesperson who has something to gain from you.
Explain how maintenance inflexibility is hurting his chances of winning new deals.
Use third-party support to cut costs.
Make purchases in one category, conditional on savings in others.

15. Agenda
Understanding Oracle
Maintenance renewals
Software license optimization
Oracle Unlimited License Agreements (ULAs)
Summary and recommendations

16. Per core pricing is a cost escalator that you can’t escape
Big data increases data volumes every year.
More data = more cores = license sales for Oracle
Virtualization, cloud, and competition threaten that revenue stream.

17. Oracle counts your full physical capacity
Subcapacity
Peak concurrent cores running software (= 2)
e.g., IBM, Microsoft VM VM
Full capacity
All named cores in cluster that could run software (= 6)
e.g., Oracle, SAP
Physical processors
VM = virtual machine

18. Control and monitor VM creation
Group Oracle VMs in their own dedicated cluster.
Document and approve creation of new VMs:
Including which packs and add-ons the originator intends to activate.
Use a certified discovery tool to monitor and validate actual deployment against approvals.
Continually fix inadvertent activation and inefficient (from licensing POV) deployment.

19. Agenda
Understanding Oracle
Maintenance renewals
Software license optimization
Oracle Unlimited License Agreements (ULAs)
Summary and recommendations

20. Oracle’s ULA can be good for both sides
Customer
Oracle
Lower price
Simplifies license management
Creates shelfware
On which you pay maintenance, forever
Reduces Oracle’s motivation to help you succeed
Increases this year’s license revenue
Encourages client to deploy its software
Reduces future revenue from that account

21. Consider a ULA if demand is predictable
Ensure that you are getting the best possible discount.
Take the extra maintenance costs into account.
Clarify the certification process at the end of the ULA.
Track deployment to ensure you get full value for your money.

22. Agenda
Understanding Oracle
Maintenance renewals
Software license optimization
Oracle Unlimited License Agreements (ULAs)
Summary and recommendations

23. Selected Forrester Research
February 26, 2014, “Quick Take: The Rimini Street Ruling Has Serious Implications For Oracle Customers”
October 31, 2013, “Oracle Is Buffeted By Headwinds — Are You Prepared?”
January 4, 2013, “Get Better Software Deals By Aligning Your Sourcing Strategy And Commercial Approach”
April 27, 2012, “Understand Oracle Better To Marshal Maximum Software Negotiation Leverage”

24. Forrester uses research-based knowledge to help you get a better deal
Structured best practice process
Vendors’ policies
Strategic insight
Latest deals
Decision support

25. Next steps Define the wider strategic context.
Map each Oracle product’s existing and potential role in your sourcing strategy for that category.
Assemble and focus your leverage.
Which salesperson has most to gain from you?
Look beyond the discount percentage when assessing proposals.
Balance impact on outcomes with price, flexibility, and risk.

26. Duncan Jones
Blog: