Oracle set to increase support fees to keep up with inflation
US customers can expect an increase of 8%, rest of world to follow
Oracle is planning to increase support fees by 8% in the United States, and will reportedly implement similar price hikes in other regions of the world, where inflation rates have been steadily approaching the highest seen for decades.
Craig Guarente, founder and CEO of Palisade Compliance, a software licencing consultancy, said Oracle customers had contacted his firm to inform it of the upcoming price changes.
"Note that Oracle has an annual support increase embedded in their terms and conditions. It's based on the general inflation rate in a country," he said.
"The US has run at between 1 and 2 percent for years. Now with inflation the way it is, Oracle is seizing that opportunity."
The move is should not come as a surprise given the tech industry, much like the rest of the world, has seen higher material and production costs this year.
IT budgets are being impacted by inflation, which is driving up costs for things like servers, storage, and professional services.
Gartner predicts that worldwide IT expenditure will increase by 3% in 2022 compared to previous year, reaching $4.5 trillion.
The move toward cloud computing, which Gartner predicts will increase 22.1% in 2022, is one change brought on by inflation.
The migration to the cloud seems to be influenced by rising costs for on-premises hardware.
Price hikes and delivery uncertainty, made worse by Russia's invasion of Ukraine, are the main factors that Gartner identified as hastening the shift of CIOs' purchasing models from IT asset ownership to as a service.
Inflation in the UK has reached 9.4% and is predicted to reach 12% in October.
Inflation in the US consumer price index reached an 40-year high of 8.8% in June.
Guarante said that Oracle might use the opportunity to pitch cloud deals and offer concessions on support hikes to gain leverage with customers.
Scott Jensen, Oracle practise head at software licencing consultancy Anglepoint, confirmed Oracle was planning to implement a support fee hike, although he said he had not yet seen it in customers' new contracts or renewals.
He did, however, point out that Oracle has updated its terms and conditions for support. The firm's terms and conditions document [pdf] addresses support pricing in the event that a subset of licences is terminated.
However, Oracle is not the only tech firm that is adjusting its rates to account for inflation.
Earlier this month, it was reported that Intel had begun informing customers that the company intends to raise prices for the bulk of its microprocessors and peripheral chip products as a result of rising inflationary pressures.
The changes are anticipated to go into effect in October.