The two support tiers.
Oracle offers two named support tiers for most product lines. Premier Support is the standard tier and includes new patches, new updates, technical support, and certification of the product on new operating systems and database versions. Sustaining Support is the long lifecycle tier and includes technical support against existing patches and updates but does not include new patches, new updates, or new certifications. The shift from Premier Support to Sustaining Support is published by Oracle for each product version and is generally between eight and twelve years from the product general availability date.
The pricing implication.
Premier Support and Sustaining Support are priced identically in Oracle's published price list. The standard 22 percent annual fee on the original license cost applies to both tiers. The economic value delivered by the two tiers is materially different. Premier Support customers receive ongoing engineering investment. Sustaining Support customers receive only access to the existing engineering output. The same fee buys very different things. This pricing structure is one of the most material commercial features of Oracle's support model and is rarely surfaced in standard renewal conversations.
What changes between Premier and Sustaining
- New patches and updates: included in Premier, excluded from Sustaining.
- New OS and database certifications: included in Premier, excluded from Sustaining.
- Technical support: included in both with reduced response commitments in Sustaining.
- Security alerts: included in Premier, generally not included in Sustaining.
- Price: identical in standard pricing, materially negotiable in Sustaining.
The negotiation opening.
The transition from Premier Support to Sustaining Support opens a substantial negotiation lever. The buyer side argument is that the support fee should drop materially when the delivered value drops. The Oracle counter argument is that the support fee is part of the original contract terms and is not tied to the tier delivered. Both arguments are partly true. The contractual position varies by agreement and many older Oracle contracts include language that supports the buyer side position more strongly than newer contracts.
The negotiated outcome in our portfolio averages a 30 to 45 percent reduction in the annual support fee for products that have transitioned to Sustaining Support. The reduction is delivered as a discount to the published pricing rather than a change to the contractual pricing methodology. Oracle prefers this structure because it preserves the formal pricing model. The buyer is indifferent to the structure as long as the cash impact is delivered.
Market driven support extensions.
Oracle has, for several product lines, introduced Market Driven Support as a paid extension to Premier Support beyond the standard end date. Market Driven Support is priced at a premium to the standard support fee and includes elements of new patch development that would otherwise be unavailable. The Market Driven Support option is negotiable and the standard premium of 10 to 20 percent above the support fee is routinely reduced in negotiation to 0 to 5 percent for committed multi year customers.
The third party support alternative.
The Sustaining Support tier is the point at which third party support becomes most economically attractive. The cost saving against Oracle Sustaining Support is approximately 50 percent. The capability gap is small because Sustaining Support already excludes new patches. The decision to remain on Oracle Sustaining or move to third party support is typically driven by the customer's view on regulatory requirements, on integration with other Oracle products, and on the strategic direction of the Oracle relationship.
The timing discipline.
The Sustaining Support transition is published well in advance by Oracle and is visible in the product lifecycle policy. The negotiation window opens approximately twelve months before the transition date. Negotiating earlier than twelve months is possible but Oracle account teams generally do not engage on the substantive pricing question until the transition is within the next renewal cycle. Negotiating later than the transition date is possible but materially reduces the available leverage because the contractual terms have already taken effect.
Related resources.
- Renewal Negotiation pillar guide
- Renewal Negotiation service
- Perpetual Licenses deal type
- Oracle Database product page
- The Negotiation Playbook
- Renewal Procurement Process Best Practices related sub article.