Counting the opportunity cost of the Oracle license structure

  • Oracle licensing fees and structure are both excessive and inflexible so they are likely costing your business big time
  • The cost of hefty IT licensing fees is not just the dollars spent, it’s the huge opportunity cost of where else that money could be spent
  • Businesses that are allocating IT budget towards research and innovation are making the most out of digital transformation

Did you know that licensing fees can make up to 60% of an organisation’s IT budget? If your IT budget is around $10m, this is a massive slice of funds. We work with clients in this field every day and are still shocked at the scant attention that is paid to this figure.  And while Oracle is not the only perpetrator contributing to the excessive licensing costs, we are focusing on it today as, when it comes to their critical database environments, businesses often think that they don’t have a choice.

But you absolutely do. The legacy licensing structure of Oracle is one of the platform’s most draconian features and one of many aspects that is holding customers in a costly clinch.

Not only are you forking out for the fees, you are missing a raft of opportunities that this IT spend could be diverted to – innovations and new solutions that can drive huge business change.

Cheaper and more flexible licensing options

Shifting to Microsoft SQL Server can save you big time when it comes to licensing fees. Oracle costs up to 10 times more than Microsoft SQL. This is because Microsoft SQL comes with one full-feature license while you have to pay for every additional feature with Oracle.

And – importantly – licensing of the Microsoft database stays the same no matter what cloud platform you are using. Whereas with Oracle you are much more limited and may have to pay a hefty extra premium to use an Oracle database on a non-Oracle cloud platform. Be warned – these charges came into effect recently and are likely to be retrospective so you may get stung with fees you have not budgeted for.

Incalculable opportunity cost

Paying too much for restrictive licensing fees is one thing. It may hurt but you can account and budget for it if you have to.

What is harder to quantify – and potentially costing much more long term – are the lost opportunities of what your IT budget could be achieving.

Digital transformation is seriously changing the way we do business and those businesses that aren’t able to capitalise on it will get left behind when it comes to relevance and user experience.

IT can deliver astonishing business value so it makes sense to make sure you have as much budget and human resource as possible to be researching, innovating and implementing new solutions.

When IT is given rein, it becomes a powerful business tool

Here is a list of different ways we have seen businesses leap forward with their operations, customer service and product offerings when IT budget can be allocated to business goals, not stuck in licensing fees.

  • Implement Business Intelligencesolutions that can provide faster, better and more comprehensive customer insights via single pane of glass to your company or market data.
  • Research AI and machine intelligenceand their potential impact on productivity and cost saving and be able to invest in the new technology to make this possible.
  • Supply chain optimisationthat ensures optimal stock levels at every location and allows for range planning and consistent stock level depth.
  • Deeper and more informative marketinganalysis – collecting more data from more sources including wifi networks so customer interactions with stores can be tracked and monitored
  • Develop smart botsthat can analyse call centre data, thus reducing support costs of doing this manually and providing customer insight at the same time.
  • Social listening– being able to tap into what customers are saying outside of their direct interactions with you so as to understand better what customers want and need.
  • Improve pricing structures and competitiveness– for example the energy sector where deregulation has disrupted the market so significantly and the development of smart meters has allowed companies to get better insights to inform their pricing policy.
  • Providing better service to customersby seeing where they are in their lifecycle and offering specific, relevant and targeted offers – for example in the finance sector an institution might notice a customer logging frequently in to check their home loan statement, this might indicate they are looking to move or want to re-finance and this triggers the customer service team into action

There are multiple other ways in which businesses have and can harness digital transformation. You want as much leeway in this area as possible and if something like steep licensing fees and inflexible licensing structures are holding you back it might be time to learn more about transitioning away from Oracle. Our whitepaper goes into more detail about three key aspects to consider when thinking about, planning or making this transition. Get your copy here. And if you have any questions you’d like to discuss we invite you to get in touch.

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