How To Get The Best Deal On Your Microsoft And Oracle Negotiations

How To Get The Best Deal On Your

Microsoft And Oracle Negotiations

Mark Bartrick, Senior Analyst

Joe Galuszka, VP & Principal Consultant

April 22, 2014

Joe Galuszka Mark Bartrick

We have been advising companies on how to

negotiate with Microsoft, Oracle & SAP for over 20

years.

© 2014 Forrester Research, Inc. Reproduction Prohibited 3

Agenda

› Microsoft Negotiations - Office 365 and alternatives

› Oracle Negotiations - ULAs and growth challenges

› How Forrester can help your negotiating team.


Microsoft Negotiations


Microsoft’s desire for monopoly drives its strategy

Persuade customers to

standardize on its stack

Lock you in for three years

Eliminate competitors

Renew existing revenue stream and add 10%

Grow the business,

revenue and profit

Defend Office business from

Google


Multi-year programs (ie. EA and Cloud) represent a growing share of Microsoft’s total revenue


Microsoft’s challenges

› Microsoft needs to keep new revenues

flowing in.

› Its main products are fully mature.

- How can it keep persuading customers to purchase

a new version of Office every three or four years?

› Many customers skip product releases.

- SA’s price assumes triennial upgrades.


Microsoft claims that SA includes 26 “benefits”

Source: Microsoft


Microsoft will push you to Office 365

Source: July 12, 2012, “How To Negotiate A Better Microsoft Office 365 Deal” Forrester report


Moving to the Cloud means Office 365 isn’t the only game in town….


Collaboration and productivity suites alternate vendors

April 2013 “Answer Five Questions When Selecting A Cloud Collaboration And Productivity Suite”


Collaboration and productivity suites alternate vendors

April 2013 “Answer Five Questions When Selecting A Cloud Collaboration And Productivity Suite”


Oracle Negotiations


Oracle closes 40% of its sales in its Q4


Oracle wants you to buy all its stack

› You can get negotiation leverage from the products you might buy,

as well as those you already own or will definitely buy.


Oracle’s ULA’s accelerate its short-term revenue growth, at the expense of subsequent years

Note. This graph exaggerates the effect to illustrate the point and are not meant to reflect the actual numbers

1. Customer A buys a ULA in 2010, so buys nothing in 2011 or 2012

2. Customers B and C buy ULAs in 2011, so buy nothing in 2012

3. Oracle needs to sell 3 similar ULAs in 2012 to replace this revenue and show growth too


Oracle’s profits come from support WHILE SALES AND MARKETING IS THE LARGEST EXPENSE CATEGORY


Oracle’s maintenance revenue growth is stalling

Oracle’s maintenance

renewal rate appears to have

fallen in the last three years.


How Forrester Can Help


Forrester has Helped Thousands of Companies Negotiate Better Deals with Microsoft, Oracle and SAP


Forrester uses research-based knowledge to help you get a better deal

› Structured Best Practice Process

› Decision Support

› Vendors’ Policies

› Latest Deals

› Strategic Insights

Microsoft Volume Licensing

Product Use Rights

Worldwide English | October 2012


The Forrester Consulting difference

Primary research

Vendor interactions

Proprietary global data

Client engagements

Research-based consulting delivered with speed, depth, and objectivity.

Forrester’s intellectual capital is leveraged

for every consulting engagement.


Next Steps

1. If you’re negotiating with these vendors in the next few months,

check out some of our research on the topic including:

- “HOW TO NEGOTIATE A BETTER MICROSOFT 365 DEAL”

- “A QUICK GUIDE TO HELP YOU PREPARE FOR AN ORACLE SOFTWARE

NEGOTIATION”

2. Contact your Forrester Account Manager to leverage Forrester’s

team of negotiation advisers to ensure you get the best deals

from Microsoft and Oracle (and SAP).

http://www.forrester.com/How+To+Negotiate+A+Better+Microsoft+Office+365+Deal/quickscan/-/E-RES77242?cmpid=mkt:soc:ss:MicrosoftOracle

http://www.forrester.com/A+Quick+Guide+To+Help+You+Prepare+For+An+Oracle+Software+Negotiation/quickscan/-/E-RES87301?cmpid=mkt:soc:ss:MicrosoftOracle




http://www.forrester.com/reg/contact.xhtml?id=26

http://www.forrester.com/reg/contact.xhtml?id=26

Thank you Mark Bartrick

Software Contract Negotiation

[email protected]

Joe Galuszka

Software Contract Negotiation

[email protected]