Executive Summary
The global vice-president of IT at a packaging company was faced a strained relationship with Oracle after years of unsuccessful attempts to renegotiate a 20-year-old contract. Following a recommendation from a third-party systems integrator, the client engaged LicenseFortress for their expertise. LicenseFortress, alongside their legal partners Beeman & Muchmore, known for their success in the Mars v. Oracle licensing dispute, brought unparalleled expert contract negotiations to transform their outdated contract. This resulted in $2.5 million USD in savings over five years and transformed the client’s relationship with Oracle into a more collaborative partnership.
$40K
Project Cost
$2.5M
Savings
6.15K%
ROI
Challenges
The client had signed a deal with Oracle nearly twenty years ago. The original deal covered a lot of Oracle products, including the E-Business ERP system, and was tied to the client’s overall revenue. At the time, the deal was a win-win for the client and Oracle; however, it had long since hit its “best before date” and was not serving the client well.
At a Glance
They had tried unsuccessfully to get Oracle to the negotiating table to rework the contract terms so it better aligned with the company’s current needs. But despite the client’s repeated appeals, Oracle remained unresponsive to their requests.
Each year – for SEVEN YEARS – the client requested to discuss the topic with Oracle, but the answer for each billing cycle was the same, “Pay your bill. We’ll deal with this later.”
Oracle’s unwillingness to discuss the deal in light of the company’s current needs (plans to move more infrastructure and workflow to the cloud) made the client wonder if Oracle was the right partner for the next phase of the client’s business growth.
Solution
Fortunately, the client had an existing relationship with a seasoned systems integrator, who recommended that they speak with LicenseFortress regarding the Oracle deal issue. This introduction proved pivotal in setting the stage for transitioning the outdated deal into one that better served both parties.
LicenseFortress quickly grasped the client’s challenges and initiated a strategic resolution process. What set LicenseFortress apart from other SAM solutions was their partnership with Beeman & Muchmore, a legal firm renowned for its expertise in contract management and its success in high-profile cases like Mars v. Oracle. This partnership provided a significant competitive edge, allowing LicenseFortress to leverage legal insights and apply pressure points that compelled Oracle to re-open negotiations.
Together with the systems integrator, LicenseFortress successfully brokered a new contract that not only favored the client but also proved advantageous for Oracle, demonstrating the power of combining expert negotiation with unparalleled legal expertise.
Results
The new contract negotiated with Oracle saved the client $1MM USD immediately by renegotiating revenue limits. Additionally, it garnered another $1.5MM USD over the next five years by reducing the annual support increase cap from 8% down to 2%. This, of course, pleased the client that had been stonewalled by Oracle for so long. Now, they were able to move forward with the Oracle relationship as the client moved more of its workflow into the cloud.
But the good news on this deal didn’t end with the client, as Oracle was also pleased with the outcome. Oracle had demonstrated that they wanted to be a good strategic partner, negotiating in good faith and working with our client as they moved to the cloud, using Oracle as a base. Oracle was able to retain a client that could have been on its way out the door. Plus, the client increased their commitment to Oracle Cloud over the next five years. Oracle is now positioned to be the client’s strategic cloud vendor past that five-year mark.
Finally, the systems integrator firm that steered the client towards LicenseFortress emerged as the unsung hero of this project. Their foresight of putting the client’s needs first and foremost paid huge dividends. Recognizing the unfavorable deal and guiding the client to a transformative solution earned them a deep appreciation of the client.
Is your long-standing Oracle agreement costing you more than it should?
It might be time for a refresh. Our expert contract negotiation services have helped companies like yours save millions by transforming outdated agreements into more favorable terms. Don’t let an old contract hold your business back.
