Ten years of Oracle Support – what did it cost?

Leave Oracle Support, escape rising cost

How does Oracle Support work?

Oracle has many different products, all of them varying in age and version. Oracle states that it cannot reasonably manage that number of products and that level of variation at all times, so the vendor only offers support and maintenance on just the most recent releases.

This is essentially Oracle saying, “in a few years, we won’t help you – not unless you upgrade.” Such is the limit of the vendor’s support.

We, on the other hand, support all older versions in line with response and resolution SLAs, and ISO quality parameters too. It’s not just a matter of covering what Oracle won’t – we also do it better.

The newest products that receive Oracle’s full support are entitled to legislative and security updates, critical patches, and so on – the technical fixes necessary to keep organisations functioning, protected, and compliant.

As time passes and Oracle continues to develop and release new products, older versions are relegated to lower tiers of support, and no longer receive the same services as before. If customers don’t (or can’t) keep up with Oracle’s endless upgrade cycle, they are basically left behind and expected to make do with the support they have.

Products have an established number of years on Oracle’s top tier of support until they “expire.” The vendor’s expectation is then for organisations to upgrade to the latest version and maintain its top tier of support. Otherwise, the product moves down the tiers, the level of support and service diminishes, while the costs only continue to rise.

What are Oracle’s levels of support?

Oracle splits its support model into three key headings: Premier, Extended, and Sustaining.

What is Oracle Premier Support?

Premier Support is Oracle’s top tier of support. It is the level that every new product release starts on, and it includes patches, security, legislative changes, bug fixes, access to My Oracle Support, and more. Premier Support ends on a designated date. This is usually a few years after the product’s release date, but not necessarily a long time after the customer bought the software.

This can become a problem for the buyer. An organisation could be sold a product on Premier Support and very soon after be told that it needs to upgrade in order to maintain it, otherwise it’ll move onto Extended Support.

What is Oracle Extended Support?

With Extended Support, the clue’s in the name. It’s a way of extending the shelf life of Premier beyond its deadline. For this service, organisations pay an additional fee: an extra 10% on the existing support fee in year one, an extra 20% in year two, and another 20% in year three.

Extended Support usually lasts for three years after Premier, but it can be more depending on the product, and often Oracle will extend the Extended cut-off date even further – one example being Oracle E-Business Suite 12.1.3.

Sometimes, Extended Support isn’t offered at all.

What is Oracle Sustaining Support?

The bottom tier, Sustaining Support, lasts indefinitely. Organisations have access to My Oracle Support, fixes, updates, critical patch updates, and upgrade scripts that were created during the Premier Support stage, but not new ones.

The lack of legislative and security updates leaves organisations on Sustaining Support at risk of threat, and/or falling out of compliance, and it can force organisations into an unwanted move they may have been reluctant to complete.

Despite this significantly reduced level of service, organisations on Sustaining Support have to continue paying the same support costs with the percentage increases added from Extended.

Moving onto Sustaining does not instigate a price reduction; the price increases only stack up. In the first year of being on Sustaining Support, an organisation can be paying way more on support costs than when it first purchased the product.

Below is our simplified breakdown of the differences between Oracle’s Premier, Extended and Sustaining Support tiers:

Support FeaturesPremier SupportExtended SupportSustaining Support
Major product and technology releasesYesYesYes
Technical supportYesYesYes
My Oracle SupportYesYesYes
New updates, fixes, security alerts, and critical patchesYesYesNo*
New tax, legal, and regulatory updatesYesYesNo
New upgrade scriptsYesYesNo*
Certification with most new third-party products/versionsYesYes**No
Certification with most new Oracle productsYesYesNo
Price rises+4% annuallyAdditional 10% in year one, then additional 20% in years two & three
+4% annually
+4% annually

*Unless created during the Premier Support stage.
** Extended Support may not include certification with some new third-party products/versions.

How much does each level of Oracle Support cost?

Short answer: it depends. But it always costs too much.

It depends entirely on what products you have and how many, which tier they’re on, how long they’ve been on that level, how long you’ve been with Oracle, what price increases you’ve already been through, and so on. With so many variables, it’s difficult to comprehend the figures.

To make things clearer, here is a ten-year timeline of how Oracle’s support costs can stack up:

For this example, we’ll use Oracle Database 19C. A Processor Licence costs £36,500 per licence with support fees charged at 22%. Your organisation decides to pay for 100 Processor Licences on Oracle Database 19C, totalling £3,650,000.

Customers spending this much would likely expect a discount, of at least 50%. The licences would therefore cost £1,825,000 and support & maintenance, charged at 22%, would be £401,500.

YearSupport levelAnnual support costReason
TwoPremier£417,560Oracle applies a 4% annual price increase.
ThreePremier£434,262Another 4% increase.
FourExtended£496,7964% annual increase, plus 10% on top for Extended Support.
FiveExtended£620,002Second year on Extended Support means a 4% annual increase, plus 20% on top.
SixExtended£773,762Another 4% annual increase plus 20% on top.
SevenSustaining£804,713Almost all support services are no longer available. 4% increases still apply.
EightSustaining£836,901Another 4%.
NineSustaining£870,377Another 4%.
TenSustaining£905,192Another 4%.
(Annual increases calculated by “previous cost + 4%” | Extended Support increases calculated by “(previous cost + 4%) + 10%” and so on)

Ten years later…

A decade on and your organisation has gone from paying £401,500 in support fees in year one, to £905,192 in year ten. That is a price increase of 125% (or £503,692 extra) in just ten years.

During that time frame, you will have spent a grand total of £6,561,065 in support fees on £1,825,000 worth of Processor Licences. In addition to this, how much support you actually received has decreased dramatically.

Bear in mind that this represents just one portion of your Oracle estate. It doesn’t include additional costs for applications and middleware support or even audit fines.

Even if you upgrade to the latest version of Oracle Database and return to Premier Support, that support cost will follow you. In fact, it will only continue to increase by 4% annually, and then you may happen to go through Extended Support once more.

Conclusion: the sooner you escape Oracle Support, the better

The increment spikes of these numbers are outrageous, but it does help explain why Oracle’s support fees create a 90% profit margin for the vendor.

It also demonstrates why organisations need to urgently consider switching to third-party support as soon as possible. Because the sooner they make that switch, the better. Why is that the case?

Our third-party support guarantees to cut your existing Oracle Support fee by at least 50%. So, if you moved over in year one of our example, instead of paying £401,500 a year on support fees, you would pay £200,750. At the end of ten years, you would have paid £2,007,500 in support fees and saved £4,553,565 – an amazing boost to your IT budget.

With our support in place, you’ll receive a superior service to Oracle’s Premier Support, and you’ll be able to extend the lifespan of your Oracle software indefinitely. Unlike Oracle, we don’t degrade or diminish our services over time. Customers, especially those currently on Sustaining Support, have the opportunity to switch to third-party support and receive a greatly enhanced service for a greatly reduced price.

The figures we’ve used here are hypothetical, but the amounts some organisations are currently paying to Oracle are all too real. The good news is, so is the amount you could save with our third-party support.

Mark Smith, CEO of Support Revolution
Build a business case for third-party support

The example we’ve given is a basic one to illustrate our point and demonstrate the savings possible with third-party support. To build a business case for switching to third-party support, you should provide an example that is relevant and specific to your organisation.

To help do this, we have created a free-to-use template that will demonstrate to you and your key stakeholders just how much you’re currently spending on Oracle Support costs, and how much you stand to save by moving to third-party support with Support Revolution.