Lessons from DeepSeek about Reducing Oracle License Costs
(While I am writing about Oracle costs, this inference from DeepSeek’s debut is true about every large enterprise software or cloud licensing costs)
The DeepSeek Revelation: A 20X Reduction in Costs
DeepSeek’s debut has taken the AI Tech world by storm and stunned the world Tech markets with NASDAQ almost in free fall.
- NASDAQ dived down by 3%
- NVIDIA down by 12%
- Broadcom down by 17%
- Marvell Technologies down 19%
- Vistra dropped by 28%
- Siemens Energy down by 19%
Oracle too was feeling the DeepSeek heat and was trading down by 13% on 27th January 2025.
The stock market trends up or down based on an assumption of what the future will bring – whether the future is bright for a company or whether the future is gloomy decides the price movements. And, on the first full trading day a week after the DeepSeek revelation, the market felt that there is something really misplaced about what the earnings of these companies will look like in the future.
Enterprise Software Licensing Costs & DeepSeek Revelation
My interest, though, is not about how DeepSeek will affect these companies’ future. My interest is about what the DeepSeek revelation teaches us about enterprise software licensing costs.
Oracle Cost Reduction & DeepSeek !!! ??? Are these two even remotely connected?
Yes indeed. And it is not about Oracle alone. If customers are smart, they can reduce their costs of SAP, IBM, AWS, Azure, GCP, etc. All of them are fair game for IT cost reduction.
Let us understand why and how
What are the key revelations from DeepSeek’s debut?
The key revelations from the DeepSeek encounter are about
- Cost Reduction in IT
- Being creative in software configuration.
- Doing more with less.
Clearly, in all the above, the DeepSeek encounter with the IT world has been nothing short of transformative.
Let us now get down to understanding Oracle costs and methods for reduction:
Reasons for High Oracle Licensing Costs
The world of enterprise software licensing, particularly Oracle licensing, has long been a complex and costly affair for organizations. Organizations have been struggling with the burden of constantly increasing Oracle costs. Oracle’s dominance in the database and enterprise software market has often led to customers feeling trapped in a cycle of escalating costs, aggressive sales tactics, and opaque licensing terms.
The reasons for the high Oracle costs have generally been
- IT departments are not creating leverage opportunities.
- Getting into long term deals that are both costly and inflexible
- Succumbing to fear of aggressive salespeople and processes
- Not benchmarking prices with peers or similar products.
- The fear of license audits & not having the knowledge to manage audits
Can Oracle license costs be reduced?
Yes, indeed.
In fact, we have always believed that Oracle costs can be reduced much beyond whatever customers have done so far. And, we have a very large number of customers who have been able to do this by engaging us.
DeepSeek’s revelation has today brought the focus back into IT cost reduction. We do hope customers of Oracle (& other enterprise software & cloud providers) gear up to this task of cost reduction.
Potential Quantum of Oracle license cost reduction
Let me just put these into categories, some of which I will discuss later in this document:
- Future additional license costs can be brought to zero.
- Alleged exposures can be brought down by 30% to 100%
- Support annuities can be reduced between 10% to 60%
And, all of the above reduction is without affecting any internal or customer stakeholders’ need for application performance.
Professional help for reducing Oracle license costs
While the reasons for high Oracle license costs are easy for most people to recognize, it is almost impossible for customers to reduce these costs by themselves. The reasons for this has nothing to do with the intelligence or smartness of the buyer or the IT leadership.
The reason for not being able to reduce Oracle costs are:
- a lack of specialized experience and expertise in this task; and this gets magnified with the Dunning-Kruger effect
- the fear of failure in managing Oracle license requirements in the future.
Where can we help customers in Oracle cost reduction?
The list is endless, but the most important areas are:
- Oracle Unlimited License Agreements (Oracle ULAs)
- Oracle Java
- Oracle LMS Audits
- Oracle Support
- Oracle SaaS & OCI procurements
Rythium’s experience
Rythium has helped customers across India, the Middle East, and Africa bring down their Oracle costs by orders of magnitude, often achieving reductions of 60% to 90% or even 100% in quite a few cases. The success lies in a combination of technical expertise, deep industry knowledge, and a specialization in mega-vendor negotiation.
We can help you drive down your IT costs and especially Oracle costs.
