Budget planning can be a challenge. You need to consider any upcoming projects and development, and where the budget for these projects will be coming from.
However, this challenge can come with potential rewards. Making the time for budget planning now could yield benefits throughout the year. Specifically, organisations should analyse their current costs and usage, to identify the areas where money is being lost, and where changes should be made to unlock critical savings.
Here’s one to get you started.
The hidden costs of software licences
There is nothing quite so disheartening as paying for something you’re not using. But a misused streaming subscription or insurance policy is nothing when compared to the amount organisations lose on having the wrong number of software licences.
Organisations generally spend millions every year on software licences for applications they don’t even use. It can represent roughly £2.1 million a year on wasted investment. This is budget that could be reinvested back into the business.
Big expense with bigger consequences
For some, this cost has only increased as organisations purchased new applications in response to the pandemic. This was a necessity for some, in order to provide customers with digital experiences during times when branches and key locations are temporarily closed.
However, this effort in digital transformation has led to a number of organisations with significant quantities of duplicate licences, and the hefty expenses that come with it. But even with these costs rising, organisations are trying to resolve the problem with more long-term decisions, such as reducing staff numbers.
And the cruel twist is that this will only hinder their ongoing digital transformations.
The vendors don’t make it easy
Mega-vendors like Oracle and SAP are partly to blame for this. As a start, these vendors won’t allow organisations to scale their licences back to a more appropriate level.
This behaviour is quite shocking, given that most services in our everyday lives allow an opportunity to reduce (or even cancel) contracts through lack of use. If you don’t claim on your car insurance, for example, you might expect the renewal price to come down.
But there are no “no-claims-bonuses” in the Oracle/SAP handbook.
Meanwhile, in addition to being obstinate, Oracle and SAP also rely on the uncertainty they generate to keep their customers overspending. And ultimately, a lot of organisations will settle for overspending, rather than falling foul of future licensing audits.
Rest assured; we understand. The vendors are notorious for using audits to their advantage, and as we’ve said before on the subject of Oracle/SAP audits, it’s always a matter of ‘when’ not ‘if.’
To the organisations that are already aware of this, we have a way to help you recover from Oracle/SAP audits.
There is another clever licensing trap the vendor uses. If you own your licences in perpetuity like the majority of on-premise Oracle customers, you are able to ask Oracle and reduce the number of licences you own. You might think this would reduce your support costs too since the vendor defines the support and maintenance pricing as 22% of your licence costs. Therefore, fewer licences means a lower licence cost and a lower support and maintenance fee, right?
However, customers are finding that when they approach the vendor for this price reduction on the smaller number of licences they now own, Oracle explains that they bought the original licences at a discounted rate due to the amount they purchased and the vendor will have to recalculate the new cost. The recalculation inevitably results in a support cost which is the same or higher than before!
Instead of living in fear of what the vendor might do or expecting more from Oracle when it comes to service and support, organisations should instead be focused on their own journeys, and what they’re trying to achieve.
Essentially, what organisations need is someone on their side, who actively works with them, not against them. They need a collaborative support provider.
Where to start?
The simple truth is: Oracle and SAP software can be complex and difficult to manage. Losing track of licence numbers and which applications are/aren’t in use is understandable.
That’s why there’s a growing market of services out there to help. However, before you jump into the world of software asset management, it helps to first understand your estate, and talk it through with dedicated experts who are experienced in – but do not work for – Oracle and SAP.
A previous Oracle/SAP partner
Before Support Revolution began, our teams worked alongside Oracle and SAP as support partners. While that’s no longer the case and we’ve since moved into third-party support, that knowledge and experience of Oracle and SAP licences has come along with us.
The upshot is that we can help you to understand the principles of software licensing. In addition to our third-party support service, we can work with your teams to understand your software estate, if you need it. We’ll also put in the time and effort to understand your roadmap and plans.
Ultimately, our objective is to help your organisation reach its own objectives.
Plus, as standard, our third-party support will reduce your Oracle/SAP support bills by at least 50%. You can start making savings straight away before you even get started on your licences.
A chance to save without compromise
It’s time for organisations to accept that their current situations (and current costs) are unlikely to change while sticking to Oracle/SAP. It’s time to move on and explore the alternative support partners that are available.
Third-party support can be an ideal place to start. Granted, we would say that, but third-party support is a Gartner-supported industry. Gartner has reported that the “uptake of independent third-party support is increasing year over year,” and CIO leaders should “evaluate third-party support as an alternative, in order to help fund future innovation.”
If nothing else, Gartner wouldn’t report on an industry if it didn’t believe its services could make a positive difference. And we can. We’ll lower your support costs, and help you to understand your estate and licence usage.
That’s just your first step towards a software estate and support network that works in your best interests, and not in the interests of your vendors.
“There are countless opportunities for organisations to optimise their costs and save money without harming their ability to operate effectively.”Emma de Sousa, Senior Vice President EMEA, Insight (Source: ITProPortal)
And our third-party support is definitely one of those opportunities.
Want a copy of Gartner’s full 2020 market guide?
If you’d like to read Gartner’s full report on third-party support, we have a free copy for you to download. The report explains the increase in demand, why organisations need to consider it, and lists what Gartner considers to be the best options currently available in the market – including Support Revolution.
Click the button below to get your copy: