The Top Six Things Every CFO Should Know About Oracle
10th Nov 2020
Oracle’s products are complex and expensive while Oracle’s business practices are widely regarded as aggressive, even predatory. However, Oracle provides business-critical systems that its customers could not survive without and aren’t easily replaced. That’s a major dilemma.
But you are a CFO and most CFOs or IT Finance Directors don’t live in the minutiae of IT. Rather, you see a line item among many that represents a consistently growing cost. Attempts in the past to reduce this cost have seemed futile so you focus elsewhere to optimize, innovate, and contribute to the business.
What if we told you that optimizing your Oracle usage and reducing cost isn’t just a pipe dream?
Here are the top six things every CFO should know about Oracle
You determine how much you pay for Oracle! In fact, your contracts with Oracle are most likely perpetual licenses, perhaps originating in the 1990s. So, you could cancel the associated annual support, pay nothing, and keep using the software forever. Of course, no mere mortal should execute such a strategy without planning all the chess moves in advance, but that is why Remend exists. We know that Oracle will ultimately act like a proper commodity and seek to win you back under quantifiable, competitive, and favorable terms.
Deal making with Oracle is the Wild West. Other software publishers have tiered programs whereby size, volume, term length, etc., determine pricing. Not Oracle. Rather, Oracle honors shrewd business planning and good old-fashioned negotiation leverage with advantageous terms and pricing. Conversely, Oracle will capitalize on bush league IT and procurement personnel to run up the score and maximize its revenue. Remend knows the difference and brings balance to your relationship with Oracle.
A penny saved is a dollar earned! As mentioned above, Oracle’s agreements are perpetual and the annual software support payments last a lifetime. While exceedingly difficult, reducing these annual payments is likewise accretive for decades to come. Even if required to spend money to save money, and the payback is not for a year or two, the long-term impact is worth considering. Remend begins its consulting by interrogating this cost, exposing its long-term flaws, and creating a plan that balances risk with value.
There is nothing to be afraid of. Despite its rhetoric and reputation, Oracle can be put back in its cage, especially within formal license audits that result in “shock and awe” financial leverage. Such outcomes should be considered pure bluster, even fictional. But you must do your own math, develop a defensible position, and be willing to say “no” under intense pressure. Such negotiation planning and interaction with Oracle are commonplace for us at Remend.
Oracle makes software like McDonald’s makes hamburgers: fattening, addictive food as a mechanism to keep collecting annual software support. McDonald’s is a $30B real-estate company first, food service company second. Oracle maintains a $20B annual software support business while doing as little as possible to innovate. The key to understanding what you spend on Oracle is this dynamic alone. The rest is mostly a distraction.
No one in your business can tie together all the necessary components to manage the Oracle cost. It is an epic level of confusion among technical admins, IT management, procurement, contracts, legal, executives, board members, etc. As technical as we are at Remend, we often end up advising lawyers, even though we are not lawyers. This is because such technical concepts must be interpreted alongside ambiguous license terms, policy, and long-standing norms.
So if you are a CFO or an IT Finance Director who’s deep into 2021 business planning, get in touch with us today to learn how we can improve your bottom line.