Oracle enacts 'all or nothing' hardware support policy

The new rules went into effect Mar. 16

Oracle has adopted what amounts to an "all or nothing" hardware support policy, according to a document the vendor has posted on its Web site.

The policy, which went into effect March 16, states that "when acquiring technical support, all hardware systems must be supported (e.g., Oracle Premier Support for Systems or Oracle Premier Support for Operating Systems) or unsupported."

It includes all systems running Solaris version 10.9 or later, those running Enterprise Linux and Oracle VM, as well as "all hardware systems for which you have applied services received under a technical support contract for another hardware system (including sharing of updates, patches, fixes, security alerts, work-arounds, configuration/installation assistance or parts)."

Customers who don't purchase support for hardware systems aren't allowed to obtain "maintenance releases, patches, telephone assistance, or any other technical support services."

Machines that have reached the end of their useful life, or which are registered as "retired," are not affected by the policy.

The policy also lists costs that will incur in the event a customer's hardware support contract lapses for longer than 90 days, or if one was never originally purchased.

These systems must be determined "service ready" by Oracle, which requires customers to "acquire the Premier Support Qualification Service (at the then current fees) and meet all requirements set forth by the service team to obtain a qualification certificate for your hardware system."

A reinstatement charge also applies. The fee amounts to "150% of the last-paid support fee, or 150% of the list technical support price for the covered hardware system, prorated from the date technical support is being ordered back to the date technical support lapsed (or the hardware order date if technical support was never purchased)."

Customers also must buy the "Premier Support Qualification Service" when they want to move up from operating system support to Premier Support for Systems.

Citing time constraints due to Oracle's quarterly earnings report, which will be released Thursday, an Oracle spokeswoman said she could not immediately provide comment on the new policy. Pricing information for the support tiers was also not available Thursday.

Since Oracle moved to acquire Sun Microsystems, observers have speculated about how it will derive more revenue from the hardware business it gained, as hardware has lower profit margins than Oracle is used to making on software licenses and maintenance fees.

The hardware support policy is "an indication to us that Oracle is starting to inject its discipline in the Sun business," JMP Securities analyst Patrick Walravens said in a research note.

"Our view is that Oracle is likely to take a harder line in terms of enforcing its support policies than Sun did, particularly in the small to medium-sized business market," Walravens wrote. "Our checks suggest that some of these customers sometimes used patches from supported machines on unsupported machines."

SMBs might look to alternatives as a result, but Oracle's move may prove effective with bigger customers, Walravens added. "To avoid the hassle of registering each machine, larger accounts may increasingly move to site license arrangement. In the end, our checks suggest Oracle is focused on the higher-end customers who want support and are willing to pay for it on every machine."

Oracle is pushing a vision of soup-to-nuts systems spanning storage and servers to applications, saying the tight integration of all those components will pay big dividends for customers.

"The question is, can Oracle deliver such amazing performance by owning the [entire] stack that the big customers will want to stay with them?" Walravens said in an interview.

But enterprises are also looking for "a single point of accountability," instead of the finger-pointing that can occur over problems when multiple vendors are involved in a system, Walravens said.

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