Microsoft Takes Aim at Oracle – How Customers Can Benefit

Microsoft recently announced its release of SQL Server 2016 along with a new offer through June 30, 2016, for Oracle database customers to migrate to Microsoft’s SQL Server for free.  Well, not exactly free, but the SQL Server licenses themselves will be at no charge provided customers sign up for a 3 year Software Assurance subscription, which is Microsoft’s version of maintenance and support but includes added benefits.

Here are the main details of the offer:

• Enroll in a new/renewed Server Cloud Enrollment with a 3 year Software Assurance subscription
  ο  Minimum 50 core requirement and Software Assurance on entire SQL Server installation
• Free SQL Server licenses
• Receive free training on SQL Server Essentials for your Oracle DBAs
• Receive subsidies for deployment services to assist with migration
  ο  Deployment and training services only available through June 30, 2016

This offer presents Oracle and Microsoft customers with a substantial negotiation leverage opportunity for fiscal year end deals – May 31 for Oracle and June 30 for Microsoft. The fourth quarter is the biggest revenue generating quarter with the most contract renewals for both suppliers.  So customers should expect to receive many calls over the next couple of months, with both suppliers eager to close deals.  While this may seem like a great negotiation opportunity for customers, only the ones who take a holistic approach, research the market to understand what is possible, and then develop a well thought out negotiation strategy will achieve highly competitive deals.

If you are looking to negotiate with Oracle, now is the time to contact Microsoft to learn about SQL Server 2016 and determine if it can meet your requirements as a replacement for your Oracle database licenses.  Assuming it is a viable replacement option, this can be used as leverage in negotiating a renewal or new purchase with Oracle, but smart organizations will use this opportunity to position financial and commercial terms to right-size their entire Oracle relationship.  This may include license and support discounting, price protections, and license and support termination for unused licenses, among other terms.  Oracle is heavily pushing its cloud offerings, so a willingness to enter into a cloud subscription will provide additional negotiation leverage.

If you are looking to negotiate with Microsoft, now is still the time to contact Microsoft to learn about SQL Server 2016, but also the time to identify other Microsoft requirements and understand market competitive financial and commercial terms.  Microsoft is highly incentivized to displace Oracle wherever possible, which means there is a willingness to negotiate other terms across your Microsoft stack if coupled with a migration to SQL Server.  Additionally, you will notice that the terms of Microsoft’s offer above leave considerable room for negotiation around the pricing of Software Assurance, scope and duration of training, and scope and subsidy amount for migration deployment services.  If you have been a loyal customer that has paid License and Software Assurance (L&SA) for SQL Server previously, this presents an opportunity to ask Microsoft for a credit or additional discounting on a new purchase, since this offer confers preferential treatment to new customers over long standing loyal customers.

In summary, we have not seen this type of public migration offer between large suppliers for many years.  This type of competitive behavior provides customers with a tremendous opportunity to right-size their relationships, correct any mistakes from the past, and establish the foundation for making future investments over the next 3-5 years.

If you have an upcoming Microsoft or Oracle renewal and would like to understand the potential opportunity to transform your supplier relationship, please do not hesitate to contact me directly at jlazarto@upperedge.com for a confidential discussion regarding your specific circumstances.