Situation – Client had one remaining year on their Oracle ELA. Client CIO inquired as to opportunity benefits lost or gained in renegotiating their Oracle ELA one year early. Effort began in late April. Client required future purchases of Technology, Applications, Consulting Services, and Maintenance/Support. Total forecasted three year estimated spend was $100M. Oracle 31 May FY end deal closure target date. Time, thoroughness, and attention to detail was tantamount.
Our Activities Included —
Create tiger task team w/ CIO to rapidly create strategy plan for future Technology, Applications, and Oracle Consulting Service requirements.
Leveraged Oracle executive relationships to socialize potential deal and unexpected revenue opportunity. Intent here was to provide access to previously inaccessible commercial benefits.
Leveraged Oracle’s desire for a FY end deal by initially securing fully negotiated 3-year ELA pricing, and then requiring VMware waive all client global audit findings.
Challenge – Overreaching an acceptable negotiation position would de-incentivize Oracle management to closing a new ELA one year early. Oracle understood customer had limited leverage in final existing ELA year term, thereby ensuring Oracle had favorable revenue and terms.
Results – Generated unexpected large revenue opportunity excitement with Oracle sales executives. Initial 3-year term offer was $105M. Relationship and deadline leverage resulted in $65M ELA, including access to desired Technology, Applications, and Consulting Service components. $40M cost avoidance delivered on $65M deal. 38% reduction returned from $105M baseline. Negotiated, signed, closed ELA renewal on time. Client exceedingly happy with results as well as access to products and executive resources.