On the face of it, upgrading your Oracle applications and databases may seem an easy choice. Upgrading means you’re on the vendor’s top tier of support, and so won’t see such steep price increases, and you’re generally keeping yourself in the vendors’ good books.
Some may argue that you’re also keeping up with the latest technology, and so therefore, the newest benefits (although most innovative changes we’ve seen have been mostly cosmetic in recent years, and don’t add much in the way of real value).
Even so, if upgrading has these potential benefits, why aren’t more organisations doing it?
Oracle upgrades have complex costs and costly complexions
Oracle (and SAP) customers are already quite acutely aware that the benefits of upgrading, from usability perspective, aren’t as enticing as the vendors make out. Some organisations feel that they are practically unable to implement upgrades, due to fear of breaking compatibility, and/or disrupting legacy software that’s been in place for years. There’s the old worry, that if you take down an older Oracle Database to make changes, it may not come back again.
But, if these aren’t an issue for your organisation, and you feel that you’re all set to upgrade, there’s no downsides, right? Wrong.
Oracle upgrades can come with additional costs you may not have been aware of before starting the project. Here are some potential hidden costs to an Oracle upgrade…
An additional upgrade
Sometimes, upgrading your Oracle software will require an additional upgrade you didn’t see coming.
For example, your organisation needs to upgrade an application such as Oracle E-Business Suite. You need to have access to the latest payroll patching to keep up with legislative changes, as without it, you’ll be unable to pay the staff. To keep these updates, you need the vendor’s top tier of support, and for that, you need to upgrade.
This isn’t the only way to retain current payroll patching, but by the vendors’ logic, it is the ‘only way.’
So, you embark upon the project to upgrade E-Business Suite. However, due to compatibility issues, you cannot run a newer version of E-Business Suite on an older version of Oracle Database. In order to upgrade the E-Business Suite, and receive the support you need, you may need to also upgrade the database on which it sits.
Upgrading Oracle applications can therefore contain a double cost to upgrade, and the additional effort and hassle involved in bringing the database in line with recent versions, too.
Remember, budgeting for just an application upgrade may not be enough.
The cost of customisations
If you’re a longstanding customer of Oracle’s, and have been using its software for years, the chances are you have customisations scattered all over your estate. Even if you’re a relatively new customer of Oracle’s, customisations are necessary for small things, such as ensuring your logo appears on invoices. These customisations take time and money to develop and implement across your estate.
One hidden cost of the upgrades Oracle is pushing the most at the moment that will frustrate your IT team the most is the reimplementation of customisations. When you upgrade, you’re moving to a brand-new system. Your customisations do not come with you. They will all have to be redeveloped in the new environment.
This is an issue for almost every Oracle customer, but especially customers with heavily customised estates. The time and money involved in this process can really stack up, all to ensure your systems are the same as they were before you upgraded.
Not only does it cost time and money, but it costs opportunity too. While your IT team is focused on getting your systems to how they were before the upgrade, they are not focused on projects that will push the company forward. While customisations are developed, no new innovation is carried out.
The endless cost of support
It’s important to mention here that making an Oracle upgrade doesn’t improve your support costs, but it may at least delay them from getting even worse.
Oracle’s support model works on a system of progression. Every Oracle product sits somewhere on the vendor’s three support tiers. In descending order, they are: Premier, Extended, and Sustaining. As a product descends through each level, the support you receive – security updates, legislative patches, incident resolution – either diminishes, or in the case of Sustaining, disappears altogether.
New products start on Premier; the majority of older products are either already on Sustaining or will wind up there eventually. The vendor’s “logic” in all this is if you want to continue receiving the best support on offer, you need to keep upgrading to the latest offering.
As an additional incentive, moving through support tiers also comes with a price increase. Extended Support will see your support fees rise by 10% in year one, then 20% in years two and three. To put that in perspective, if you started Extended Support paying £500,000 a year on support fees, you’d move into Sustaining Support three years later, paying £792,000 a year on support (that’s not even including Oracle’s standard 4% support price increases each year). But your support service has gotten worse.
And this is the ongoing issue. Even if you decide to finally make that upgrade, and go along with Oracle’s ideology, your support cost doesn’t come down. It simply slows down its increase rate by avoiding the Extended Support price hikes – but Oracle’s standard 4% annual increase still applies.
That is the biggest hidden cost of Oracle upgrades. Paying to make that upgrade doesn’t make the problem go away. It just delays it, until the next one.
Avoid hidden costs and find savings
Every organisation will upgrade its Oracle software for its own reasons. But if you’re planning an upgrade purely to stay supported, we would suggest considering third-party support as an alternative option. We can provide the same services as Premier Support – legislative & security changes, incident reports etc – and we’d even argue that we can do it better than Oracle.
That was, your organisation can remain supported with the services you need in place, without having to upgrade a thing in order to get there. No need to upgrade the database on which it sits. No need to call in specialists to help with an upgrade you may not have wanted in the first place.
And, as part of our standard support service, we’ll aim to reduce your Oracle support bill by at least 50%.
Oracle may have hidden costs – we’ll help you to find hidden savings.
