Chief Information Officers (CIOs) are constantly pressured to optimize IT budgets while maintaining reliable systems. Enterprise software support is one area ripe for cost savings, particularly for Oracle products. Oracle’s standard support contracts are known for their hefty price tags and annual increases, which can consume a significant portion of IT budgets. Many organizations have turned to independent third-party support providers like Rimini Street and Spinnaker Support as an alternative in recent years. The central question is: how much can you save by switching to third-party support for your Oracle systems?
This article explores the potential cost savings, breaks down where those savings come from, compares third-party providers to Oracle’s support, and offers strategic guidance on when a CIO should consider switching.
The High Cost of Oracle’s Native Support
Oracle’s software support isn’t cheap. Under Oracle’s standard policies, annual support fees are typically around 22% of the original license cost. If your company paid $10 million for Oracle software licenses, you might be paying roughly $2.2 million yearly just for support. Compounding the issue, Oracle has introduced inflation-indexed increases, reserving the right to hike support costs by up to 8% annually. In practice, many Oracle customers see their support bills grow 2-4% yearly due to these escalators. Over a few years, a $2.2M annual fee can balloon considerably, straining IT budgets.
Why is Oracle’s support so expensive? One reason is that it’s a major profit center – some estimates say Oracle enjoys profit margins around 90% on support revenue. Customers are paying a premium for the right to updates, patches, and phone support. For CIOs, the key question is whether that premium delivers commensurate value, especially if your Oracle systems are stable and not in need of constant updates. If not, those dollars might be better spent elsewhere.
Large enterprises often pour tens of millions into Oracle support fees annually, only to receive what many consider “maintenance mode” service. This has led CIOs to explore alternatives to recapture part of that spend. Enter third-party support providers, which promise to cut those maintenance costs dramatically while keeping systems running smoothly.
Where Do Third‑Party Support Savings Come From?
The headline appeal of third-party support is cost savings. Providers like Rimini Street and Spinnaker Support advertise more discounts than Oracle’s support fees, often about 50% off the annual maintenance cost. But the savings extend beyond just a lower contract price. Here’s a breakdown of where organizations typically save with third-party support:
- Lower Annual Support Fees (50% or More Savings): The reduced support contract cost is the most immediate benefit. Third-party support vendors generally charge about half of what Oracle does for equivalent support coverage. For example, if you currently pay Oracle $2 million annually, switching to a third-party could bring that down to around $1 million. Some providers even offer additional discounts for unused licenses (“shelfware”) or multi-year commitments. The upshot is an instant reduction in yearly run-rate costs, often freeing up significant budget for other needs.
- Avoiding Expensive Upgrades and Extended Support Fees: Oracle’s model often forces customers to go into a cycle of upgrades to stay fully supported. When Oracle declares an older version end-of-life, you face a tough choice: either upgrade to the latest version (incurring project costs and possible new hardware), or pay steep extended support fees (often an extra 10-20% surcharge) to keep the old version on Oracle support. Third-party support breaks this cycle. Without forced upgrades, you can continue running your stable, legacy Oracle versions for many years with full support. This deferral of upgrades yields major savings – you avoid the labor, testing, and downtime costs of an upgrade project, and you don’t pay Oracle’s premium for extended support. When factoring in avoided upgrade costs, total savings from third-party support can reach 70% or more compared to staying with Oracle. (Some analyses even claim up to 90% savings in total maintenance over the long run when all factors are considered, though ~50–70% is more common.)
- Extended Hardware and Platform Lifespan (Hardware Independence): Along with avoiding software upgrades, third-party support allows you to extend the life of existing hardware and infrastructure. Oracle’s support policies sometimes nudge customers to purchase Oracle’s engineered systems or move to Oracle Cloud for optimal support. They may also stop supporting certain operating systems or hardware for new versions, effectively pushing a hardware refresh. In contrast, independent support vendors will support your Oracle software on any platform – on-prem servers, older operating systems, public cloud VMs, etc. This hardware independence means you’re not forced into costly upgrades just to remain supported. You can continue using your current servers and infrastructure until it’s time to change. CIOs can realize additional savings by avoiding premature hardware investments and choosing lower-cost infrastructure (for example, running Oracle workloads on a third-party cloud or commodity hardware).
- No Vendor-Driven Price Hikes or Penalties: With Oracle, you face annual inflationary increases and risks like audits or repricing if your usage changes. Third-party support offers a more predictable cost structure. The rate is typically fixed (at the lower level) for the duration of your contract, and there are no surprise fees for things like downloading patches or supporting customizations – it’s all included. You also sidestep Oracle’s practice of tying support to license lists; if you choose not to use certain Oracle modules, a third-party provider can often exclude those from support. Oracle would still charge support as long as you own the license. This flexibility ensures you pay only for what you truly need, without sudden cost surprises. As a result, companies get a stable, predictable support spend year after year.
- Soft Savings: IT Staff and Operational Efficiency: While harder to quantify than the direct fee reductions, many organizations report that third-party support improves overall support quality and responsiveness. Issues get resolved faster and with more personalized attention, since vendors like Rimini and Spinnaker assign seasoned engineers to your account. This can reduce downtime and your team’s internal effort to manage support tickets. Additionally, by outsourcing break-fix and maintenance tasks to a third party, your internal IT staff can refocus on strategic projects rather than fighting fires or executing vendor-mandated upgrades. Over time, these productivity gains translate to cost savings (or at least cost avoidance, by not needing to hire additional staff for support). For instance, one company, Welch’s, avoided a major upgrade and freed up IT personnel – they saved nearly $1 million annually and reinvested that into new marketing initiatives and a security analyst hire.
In short, third-party support cuts costs in multiple ways: lower fees upfront, no forced spending on upgrades/hardware, and more value from your existing assets. These savings can be quite dramatic, which is why thousands of Oracle customers globally have switched in recent years.
Rimini Street vs. Spinnaker Support vs. Oracle: Cost Comparison
Two leading third-party support providers for Oracle environments are Rimini Street and Spinnaker Support (others include Support Revolution, US Cloud for Microsoft/Oracle, and more). Rimini and Spinnaker have built their business by offering support for Oracle (and SAP and other enterprise software) at a fraction of Oracle’s price. How do these providers stack up against Oracle’s native support regarding costs and services?
- Pricing Model: Rimini Street and Spinnaker Support typically charge 50% of Oracle’s support fees for equivalent coverage. In practice, if you paid Oracle $5M annually, a third-party contract might be around $2.5M – a huge reduction. Spinnaker notes that 50% is a starting point – they often further adjust cost based on things like shelfware (idle licenses you don’t use) and multi-year commitments. Rimini Street advertises “save 50% on support and up to 90% on total maintenance” when all secondary costs are factored. From a pure cost perspective, both vendors are fairly comparable and significantly cheaper than Oracle’s support. CIOs can leverage quotes from both to negotiate the best deal, but expect the savings to be in the same ballpark.
- Support Scope and Quality: Oracle’s Premier Support provides the basics – bug fixes, patches, and technical help – but it won’t touch customizations and often follows rigid scripts and escalation paths. Third-party providers pride themselves on more personalized service. For example, Rimini Street assigns a named primary support engineer, and both Rimini and Spinnaker support your custom code and integrations, which Oracle would typically decline to troubleshoot. While this article focuses on cost, it’s worth noting that the higher-touch support model can indirectly save money too (through faster problem resolution and less downtime). Rimini and Spinnaker consistently report client satisfaction ratings in the high 90s and emphasize their expertise in legacy systems that Oracle no longer fully supports. In short, you’re paying less and often getting a broader scope of support (covering legacy versions, custom mods, etc., at no extra fee).
- Updates and Patches: One caveat is that only Oracle can provide official product updates/upgrades. Third-party support cannot deliver new Oracle versions or proprietary patch bundles. Instead, they create their fixes, security patches (often called “virtual patches”), and tax/regulatory updates to keep your system compliant and secure. This approach has proven viable for many companies. Still, CIOs should know that staying on Oracle support might be necessary if they need the latest features or a compliance requirement mandates a vendor-supplied update. However, for most organizations running mature products (E-Business Suite, PeopleSoft, Oracle Database, etc.), the feature enhancements in newer versions are “nice to have” rather than must-haves, and third-party providers can fill the gap with custom fixes. It’s a trade-off: innovations via upgrades vs. cost savings and stability. Many CIOs find that for stable ERP or database environments, they can forego Oracle’s updates for years without issue, as long as they have a support partner to keep things running and patched.
- Hardware and Platform Flexibility: Oracle’s support is tied closely to Oracle’s ecosystem – they’ll support your software running on officially certified platforms (and they may be reluctant to fully support if you run, say, Oracle Database on VMware or AWS cloud beyond basic break-fix guidance). Third-party support, on the other hand, is agnostic. They will troubleshoot your Oracle systems wherever you run them, and even support you if you’re integrating with non-Oracle systems. This gives CIOs freedom to, for example, move an Oracle workload to a cheaper cloud provider or keep it on an older operating system without losing support. The cost benefit is that you’re not forced into Oracle’s more expensive hardware or cloud offerings to stay “fully supported.”
In summary, third-party support providers like Rimini Street and Spinnaker Support offer an attractive value proposition: roughly the same support coverage (and often more hand-holding) at about half the cost of Oracle’s support fees. They enable longer system life and flexibility, which yields further savings over time. Oracle’s support, while comprehensive in what it officially provides (access to new patches, etc.), comes at a steep price and is bundled with Oracle’s interest in selling you more licenses, hardware, or cloud services. The third-party providers only sell support – their incentives align with keeping your costs down and your existing systems running.
Real-World Savings: Benchmarks and Case Studies
Third-party support isn’t just a theoretical cost saver; many real-world examples of organizations have slashed their support bills and freed up funds for innovation. Here are a few illustrative cases and benchmarks:
- Public Sector Example – Rochester School District: The Rochester City School District in New York faced tight budgets and growing Oracle support costs. After switching from Oracle support to Rimini Street, they saved over $500,000 per year in support fees – roughly a 60% reduction, equating to a projected $8.9 million savings over 10 years.
- Those funds, previously locked into Oracle maintenance, were reallocated to prevent budget cuts in critical educational programs. This example underscores how even public institutions with smaller IT budgets can reap significant benefits from third-party support.
- Enterprise Example – Welch’s: Welch’s, the well-known consumer goods company, faced an expensive Oracle upgrade that brought little business value. By opting for third-party support instead, Welch’s avoided the upgrade and saved nearly $1 million annually in maintenance costs. The CIO repurposed the savings to fund new marketing initiatives and hire additional staff (a new security analyst), turning a “keeping-the-lights-on” expense into strategic investments. This case highlights how avoiding vendor-forced upgrades directly translates to dollars that can drive innovation elsewhere.
- Global Enterprises – Hyundai & Doosan: It’s not just smaller organizations benefiting; large global enterprises have also leaped. For instance, automaker Hyundai Motor and industrial conglomerate Doosan worked with Rimini Street to support their Oracle systems. They cut their Oracle support costs by about 50%, freeing up millions channeled into new technology initiatives in transportation and energy. The scale of these companies demonstrates that third-party support can meet the demands of complex, multinational IT environments – and deliver very substantial absolute savings (often measured in the tens of millions over several years).
- Additional Benchmarks: According to a Database Trends & Applications article co-authored by Oracle experts, customers who switch to Rimini Street or Spinnaker Support “can save up to 50% on their current support bill”, and the savings “could reach 70% or higher when you factor in that the customer is no longer doing major upgrades”. These figures align with what third-party vendors advertise and what many clients report. In Gartner’s analysis (as referenced by independent consultants), the average annual savings with third-party support tends to be around 50% of the original vendor support costs – a consistent finding across the industry. In short, cutting your support bill in half is a realistic expectation, and anything beyond that depends on how much ancillary cost (upgrades, hardware, etc.) you can eliminate.
It’s worth noting that savings aren’t limited to Oracle software. Organizations running other enterprise applications (like SAP or IBM software) have similarly turned to third-party support for cost relief. However, Oracle, with its high support margins and aggressive sales tactics, has been a focal point, and thus, the third-party support ecosystem around Oracle is particularly well-developed.
When Should a CIO Consider Switching to Third‑Party Support?
While the cost benefits are compelling, moving to third-party support is a significant decision. It means parting ways with the vendor (Oracle) for support and entrusting an independent provider with your mission-critical systems. When does this make sense for a CIO? Here are key scenarios and strategic considerations for making the switch:
- When Cost Reduction is a Top Priority: If your organization is pressured to cut costs, and Oracle maintenance fees are a big line item, third-party support should be on the table. The savings (50 %+ on support costs) can be a quick win for the IT budget. Companies facing budget crunches or seeking free funds for digital transformation often find this an attractive option. As noted, many clients redirect the saved funds into innovation, shifting significant budget from “keeping the lights on” to growth initiatives.
- When Your Oracle Systems Are Stable and Sufficient: Ideal candidates for third-party support are mature, stable systems that meet current business needs. For example, if you’re running E-Business Suite 12.1 or Oracle Database 11g and it’s working fine, you may not need the new features Oracle is developing in later versions. If there’s no immediate need for new functionality, why pay for it? Third-party support lets you comfortably run these stable, legacy systems for 5, 10, even 15+ years with ongoing fixes and compliance updates. In contrast, Oracle will eventually push you to upgrade as their support policy deadlines hit. Organizations in a “steady state” with their ERP/CRM/database, and don’t want disruption, should strongly consider staying on their current release with third-party support.
- When You Want to Avoid Forced Upgrades: This goes hand-in-hand with the above point. Perhaps you plan to modernize or migrate in the future, but not right now. It might be more strategic to defer that Oracle upgrade until you’re ready (or until you switch to a different platform altogether). Third-party support can buy time and avoid the costly upgrade treadmill. You can remain on an older version without losing support, thus avoiding the resource-intensive upgrade that Oracle would otherwise require. CIOs often use third-party support as a bridge to eventually move off a platform on their schedule – for example, staying on Oracle EBS for five more years with third-party support while a transition to a cloud SaaS is planned, rather than doing an interim EBS upgrade just to satisfy Oracle’s support timeline.
- If You Have Extensive Customizations: Many Oracle customers have heavily customized their software (be it the database, EBS, PeopleSoft, etc.) to fit business processes. Oracle’s standard support does not cover custom code – they’ll often tell you to reproduce an issue on an uncustomized environment. In contrast, third-party support will help with your customizations as part of the deal. Suppose your environment has significant custom workflows, integrations, or modifications. In that case, you likely aren’t getting much value from Oracle’s vanilla patches (which might not apply cleanly) or their support (which can’t delve into your code). Third-party providers, on the other hand, excel in supporting unique configurations. In such scenarios, you’re paying Oracle 22% for support that doesn’t fully support you. That’s a strong signal to consider an independent provider who will troubleshoot your system (customizations included) and save you money.
- When You Desire More Personalized, Responsive Service: CIOs frustrated with Oracle’s ticket process and slow response might find third-party support a breath of fresh air. While this is more about service quality than direct dollars, a more responsive support model can reduce the internal cost of managing issues. If you’ve experienced poor support from Oracle – long waits, bouncing between junior support staff – you may be paying premium dollars but getting commodity service. Third-party vendors often tout dedicated senior engineers and faster SLAs. One consulting group noted that these providers offer “personal contact persons, high service quality… much more flexibility than Oracle itself.” This better experience and lower cost can improve IT’s efficiency. So if support pain points impact your operations, that’s another reason to switch.
- When Oracle’s Roadmap Doesn’t Align with Yours: Perhaps Oracle is pushing you toward their cloud offerings or a Fusion upgrade, but your strategy is different. By staying on Oracle support, you might feel pressure to follow Oracle’s roadmap to remain in their good graces. Switching to third-party support liberates you from Oracle’s agenda. You won’t have Oracle account reps using support renewal time to sell you more products or cloud subscriptions. You can chart your course – whether that’s a hybrid cloud approach, sticking with on-prem, or evaluating non-Oracle solutions – without the vendor’s influence via support. This independence can be strategically valuable. In essence, third-party support decouples the software maintenance from the vendor, giving you more control over your IT roadmap.
- If You’re Near or Past Oracle’s Support Deadlines: A very common scenario for considering third-party support is when Oracle announces end-of-support or end-of-updates for a product version you rely on. Maybe your database version is moving to Extended Support (with a 10% fee uplift), or your ERP will soon require an expensive upgrade to stay supported. These junctures are natural decision points. CIOs can compare the costs: do we pay Oracle even more (or take on a big upgrade project), or do we switch to a third-party who will continue supporting us at half the cost? Often, the latter wins out. Many companies proactively leave Oracle support just before a deadline to skip the extended support phase. Third-party providers will indefinitely support “out-of-life” versions, so you avoid Oracle’s ticking clock and extra charges.
- When You Have a Clear Exit Strategy (or None at All): If you plan to eventually migrate away from the Oracle product (maybe in 3-5 years), third-party support can provide cost-effective coverage in the interim, as mentioned. Conversely, if you plan to stay on your Oracle system for the long haul but don’t need new updates, third-party support can be a long-term solution to save millions over the system’s life. However, staying on Oracle support might be necessary if you need Oracle’s updates or a close partnership with Oracle for your plans. Each CIO must evaluate how critical Oracle’s ongoing innovation is to their business vs. the value of cost savings and extended support for the status quo.
Important Considerations: Moving to third-party support does carry some strategic considerations. Oracle will consider your support cancellation as a termination of that relationship, which has a “one-way door” effect. If you later decide to go back to Oracle support, Oracle typically will require you to pay all back support fees for the period you were off support (plus possibly reinstatement fees). In practice, few companies return to Oracle support once they leave, but CIOs should decide with a long-term mindset. You won’t receive new product versions or official patches without Oracle support, so you rely on a third party for fixes. It’s wise to thoroughly vet the provider’s capabilities (ask for references, success stories in your industry, etc.) and ensure you have any necessary access to Oracle knowledge bases or documentation before your support access is cut off.
Another consideration is software license compliance. Support status doesn’t directly change your license rights – you still own the licenses. However, some Oracle agreements tie certain benefits to having support (for example, the right to upgrade to new versions is included with active support). Before switching, reviewing your Oracle license situation (possibly with expert help) is prudent to avoid any compliance pitfalls. Also, be prepared for Oracle to audit your licenses at some point; some observers note that Oracle may increase audit pressure on customers who drop support (since it’s one way Oracle tries to recoup revenue). Having a clean license posture will prevent audits from eroding your savings.
Key Takeaways for CIOs
For CIOs, the allure of third-party Oracle support boils down to hard dollar savings and strategic flexibility. Organizations are reporting 50% or more maintenance cost reductions by moving to providers like Rimini Street and Spinnaker Support. Those savings stem from lower fees, avoiding costly upgrades/hardware refreshes, and more efficient use of IT resources. In real terms, we’re talking about potentially millions of dollars per year that can be reallocated from “keeping the lights on” to driving new value (as seen when companies use savings to fund innovation, hires, or necessary projects).
However, the decision isn’t one to take lightly. CIOs should weigh factors such as the need for future Oracle innovations, the state of their systems (stable vs. in flux), and the implications of severing ties with the vendor. Due diligence is key – evaluate the third-party provider’s track record, ensure executive buy-in (since Oracle may attempt retention offers or raise concerns), and plan the timing carefully (often aligned with your Oracle support renewal cycle).
When executed correctly, switching to third-party support can be a game-changer for the IT budget and extend the useful life of software that still serves the business well. As one set of industry experts put it, third-party support is a “viable and often advantageous alternative” that offers significant cost savings, high-quality service, and greater flexibility.
In an era where IT leaders must do more with less, it’s no surprise that many CIOs ask: “Why continue paying top dollar to Oracle if we can get the same (or better) support for half the cost?” For those running mature Oracle environments, the prudent move is to at least investigate third-party support options. The savings could be substantial, and as numerous organizations have learned, those savings can be the catalyst for funding the next wave of technology investments that drive the business forward.
Ultimately, the amount you can save will depend on your Oracle footprint and circumstances. Still, case after case has shown that the potential savings are significant, often in the tens of percent of your IT budget. For a CIO, that’s an opportunity too big to ignore. By understanding the trade-offs and planning strategically, you can make an informed choice about whether third-party support is the right path to stretch your IT dollars further while keeping your Oracle systems running strong.
