As consumers, we expect some services to auto-renew, and others to wait for our approval. Calling or filling in an online form to re-confirm our broadband or streaming TV subscription every month would certainly give us more control, but it would also be incredibly annoying. We’re used to certain types of services simply continuing until we say stop.
This convenience can, of course, work in favour of the service provider. Many can relate to the experience of being charged an unexpectedly high amount for another year of insurance cover, having missed the notice that this would increase. This often feels less like convenience and more like a company taking advantage of a customer’s inattention for profit.
Oracle ERP customers may be in for a similar surprise. In a change to policy, support contracts will now auto-renew rather than simply run out, unless 32 days’ notice is given.
Will this be seen as convenience or exploitation?
Everyone should ditch auto-renew
Getting out of an Oracle support contract used to be simple: when you no longer paid them, they no longer offered you support. An organisation using Oracle ERP was then free to either go it alone without the considerable expense of official support, or switch to a third-party support provider to make savings.
Now it’s a little trickier. By default, a support contract will auto-renew unless 32 days’ notice is given. There will be reminder emails 120 days and 60 days before the renewal date, but these will contain the phrase “no further action is required by you”. Technically, this is correct, but if this email is not received by someone who is responsible for making decisions about support, then it’s more likely to be ignored, just another informational email to file away with no response needed.
Oracle has said that this decision has been made to benefit its customers. With contracts auto-renewing, its argument goes, organisations won't be left without support. We’re not sure its customers would agree—Oracle has always been proactive in selling its support to customers, so it’s unlikely that it would let a customer go without support and not get in touch in order to offer them a new deal.
It’s for this reason that any customer, even those who want to continue with Oracle’s official support, should switch off auto-renew. To do so, all that’s necessary is to log into the Oracle support account platform and opt out of the auto-renew program.
But why cancel Oracle Support if you’re happy with the support received?
The answer is that it gives you leverage. We’re all familiar with the calls and emails with special offers that follow cancelling a service, or being transferred to a retention team able to offer reduced rates. Auto-renew removes all of that, and Oracle is able to simply roll over the contract from before. Renewing manually means that you can ensure that you’re receiving the best deal—and carefully consider if official support is your preferred choice after all.
It’s important to be careful, however. Oracle say they charge a reinstatement fee to bring back support if it lapses. This fee is calculated as 150 per cent of the annual technical support cost for the last year, and prorated from when support lapsed. That is, whatever a customer would have paid for support for the time they were without it, they would pay that and half again. This penalty is there to discourage turning support on and off when needed, but could also punish those who don’t want to auto-renew.
But are they really going to charge you? We’ve been working with customers for 20+ years and Oracle rarely try applying this particular penalty because they desperately want you back on their books as a paying customer.
Auto-renew may be about convenience, but convenience comes at a cost. This is fine if it’s less than a tenner a month for a recurring Netflix subscription, but organisations should be in control of bills that represent a major outgoing such as Oracle Support.
But what about matching service levels?
Some of Oracle’s customers may worry about the new “matching service levels” policy. Doesn’t it require that all Oracle software has official support? Not quite—but it does imply this, possibly deliberately.
The matching service level policy in fact states that if two products from the same family are used on one system, they must be licensed on the same basis, and this includes support. Oracle says that “you may desupport a subset of licenses in a license set only if you agree to terminate that subset of licenses.” In other words, for certain groups of products, organisations need to choose if they want official support for everything or nothing—there’s no way to pick’n’mix what’s needed.
But this does not mean that an organisation is required to stick with official support for every product they license from Oracle, and it doesn’t mean it might as well auto-renew through a lack of choice. Navigating what is and what is not allowed is, however, tricky, and since the policy was introduced there have been reports of Oracle sales reps telling customers that cannot terminate support on one contract if they want to continue to use any Oracle software at all, implying that support is mandatory.
Oracle has gained a reputation for wielding the threat of software audits to get customers to agree to upgrades, and for pushing its cloud platform to users for whom it may not be the best option. The aim is to bamboozle the customer into choosing the option that is best for Oracle, and not necessarily best for them. Auto-renew and matching service levels are just part of this.
We recommend that Oracle customers not only reject auto-renew, but reject the autopilot mentality that can often come with complex software decisions. There are more choices than the default or what is offered by the Oracle sales rep (like third-party support or a hybrid cloud setup for example), and the matching service levels policy, while making decisions more difficult, shouldn’t stand in the way of exploring all of the options.
Mark Smith, CEO, Support Revolution
Image Credit: WalkMe