PeopleSoft Support and Maintenance Fees: How to Negotiate and Reduce Ongoing Oracle Costs

PeopleSoft Support and Maintenance Fees

Introduction: Why PeopleSoft Support Fees Keep Rising

Oracle’s one-size-fits-all support model for PeopleSoft is expensive and inflexible, causing support fees to rise steadily each year.

Oracle typically charges 22% of the software license value annually for PeopleSoft support, with automatic yearly increases (around 3–4% on average, sometimes higher in recent years). Read our PeopleSoft licensing guide.

This means your support bill climbs every year with no reduction for lower usage or aging software, straining IT budgets and frustrating customers.

Understanding Oracle’s PeopleSoft Support Fee Structure

Oracle’s standard maintenance fee for PeopleSoft is 22% of your license costs per year (Premier Support). That fee grants access to updates, patches, and technical support for a defined period (usually up to 5 years from release).

After that, Oracle offers Extended Support for additional years (often at an extra surcharge like +10% in the first extended year), and then Sustaining Support indefinitely (with no new patches).

Importantly, Oracle never lowers the support fees as your PeopleSoft system ages – even on Sustaining Support, you continue paying roughly the same 22% yearly.

Combined with the ~4% annual uplift trend, this structure locks customers into high costs that only grow over time, regardless of how much value you still get from the software.

Common Traps in Oracle Maintenance Costs

Oracle’s maintenance policies contain several pitfalls that can inflate costs for PeopleSoft customers:

• Paying support for shelfware: Many companies continue paying Oracle’s 22% support fees on unused PeopleSoft modules or licenses (“shelfware”). Oracle will still charge support on all licenses under contract unless you formally terminate them, so idle software racks up ongoing fees.
• No fee reduction for unused modules: Oracle’s policy requires maintaining support on all licenses in a product set – you generally cannot drop support on select unused modules without fully terminating those licenses. As a result, support costs remain unchanged even if some PeopleSoft functionality goes unused.
• Escalating costs for extended support: If your PeopleSoft version is out of Premier Support, moving into Extended or Sustaining Support can trigger extra cost increases. For example, Extended Support often carries a 10% premium (or more) on top of regular fees. Under Sustaining Support, you pay full price for minimal service (no new fixes), essentially paying more for less as the product ages.

Negotiation Strategies to Reduce PeopleSoft Support Fees

Despite Oracle’s rigid policies, you can negotiate better terms.

Here are key strategies to help reduce your PeopleSoft maintenance costs:

• Cap or freeze annual uplifts: Negotiate a multi-year support agreement with a fixed or capped yearly increase. For example, aim for a 0% increase for the next 1–2 years or cap any annual uplift at 3%. This prevents Oracle’s default 4–8% escalations from compounding your costs.
• Seek credits for unused licenses: If you’ve identified shelfware, push Oracle to remove those licenses from your support base or provide a credit. Oracle is hesitant to cut the support bill, but with evidence of significantly reduced usage, you might secure a one-time discount or an offset (e.g., having a year’s uplift charge waived).
• Bundle future projects for concessions: If you plan to buy more Oracle products or cloud services, bundle those negotiations with your PeopleSoft support renewal. The promise of new business can motivate Oracle to offer support discounts or price breaks to secure the combined deal.
• Leverage Oracle’s quarter/year-end timing: Try to align your renewal discussions with Oracle’s quarter-end or fiscal year-end (May 31). Oracle sales reps have quotas and are more flexible at these crunch times. Engaging at year-end – and making it known that you’re considering alternatives (like third-party support) – can improve your leverage and yield better support terms.

Read about the audit risks, PeopleSoft Audit Risks: How to Avoid Oracle Licensing Penalties

Third-Party Support as a PeopleSoft Cost Reduction Alternative

Another way to slash PeopleSoft support costs is by switching to an independent third-party support provider. These providers (e.g., Rimini Street, Spinnaker Support) offer to support Oracle products at roughly 50% of Oracle’s fee.

In practice, organizations can cut their PeopleSoft support bill in half by moving to third-party support – and often avoid the annual uplift increases entirely, as third-party contracts typically come with fixed fees and no mandatory hikes.

Key pros of third-party support include:

• Major cost savings: You immediately save around 50% on PeopleSoft maintenance fees, freeing up budget. Over multiple years, avoiding Oracle’s yearly increases multiplies the savings – companies report millions saved by switching.
• No forced upgrades: Third-party support lets you run your current PeopleSoft version as long as you want. Oracle’s support policy pushes customers to upgrade periodically (since older versions eventually lose full support), but an independent provider will continue supporting your existing system indefinitely. You won’t be forced into unwanted upgrades just to stay supported; you upgrade on your own timeline based on business needs.

Potential cons of third-party support:

• No new Oracle patches or releases: Leaving Oracle support means you lose access to Oracle’s official updates and new version releases. The third-party vendor will provide bug fixes, troubleshooting, and even regulatory updates for your current PeopleSoft version, but you won’t get any brand-new Oracle features. Essentially, you’re committing to your existing version for the long term (unless you later re-enroll in Oracle support to upgrade).
• Certification and compliance considerations: Oracle will no longer certify your system or integrations once you’re off official support. Using third-party support is fully legal – you still have valid licenses – but be sure you’re license compliant before switching. Oracle may scrutinize compliance (via audits) for customers who leave support, so it’s wise to double-check you have no license shortfalls. There’s no contractual penalty for moving off Oracle support (you can’t be fined just for switching), but Oracle does require that you drop support for all your PeopleSoft licenses if you switch (no partial support allowed).

When does third-party support make sense?

Typically, when your PeopleSoft environment is stable and not undergoing major changes. If you’re happy with the current functionality and don’t need Oracle’s ongoing updates, a third-party support provider can keep your system running smoothly at a much lower cost.

This option is especially attractive for older PeopleSoft deployments or those planning to eventually migrate to a new system – you can save substantially on support in the interim without affecting day-to-day operations.

Comparison Table: Oracle Support vs Third-Party Support

Below is a comparison of Oracle’s standard PeopleSoft support versus a third-party support alternative:

Checklist: How to Cut Oracle Maintenance Costs

Use this checklist of actions to help reduce your Oracle/PeopleSoft support spend:

• Audit your entitlements vs usage: Review all PeopleSoft licenses and modules you’ve purchased. Identify what’s actually being used versus what’s lying unused.
• Identify “shelfware” modules: Pinpoint the PeopleSoft components or user licenses that are not in use. These shelfware items are candidates to be eliminated from your support contract.
• Request support fee reductions or credits: Armed with your usage data, ask Oracle to adjust your support fees. Request removal of unused licenses from the contract or seek credits/discounts based on the reduced scope.
• Explore third-party support bids: Get pricing from third-party support providers before your renewal. Knowing you could cut costs by 50% elsewhere gives you leverage – and a backup plan if Oracle won’t budge.
• Time negotiations with Oracle’s sales cycle: Plan your renewal discussions around Oracle’s quarter-end or year-end. Oracle reps aiming to hit quotas are likelier to agree to concessions (like capped increases or discounts) at those times.

FAQ: PeopleSoft Support & Maintenance Costs

Q1: Can Oracle reduce my PeopleSoft support fees?
A: Oracle typically won’t reduce fees on its own, but you may negotiate savings. By highlighting unused licenses or considering alternatives (like third-party support), you can sometimes secure caps, discounts, or credits on your support renewal.

Q2: What is the standard Oracle support %?
A: Oracle’s standard support fee is 22% of the license price per year for PeopleSoft (and most Oracle software). That is the baseline annual maintenance rate (for Premier Support).

Q3: Does shelfware still require support fees?
A: Yes. Oracle charges support on all active PeopleSoft licenses under contract – even unused “shelfware” modules. Unless you terminate a license entirely, it continues to accrue the annual support fee.

Q4: Can I switch to third-party support anytime?
A: You can switch to third-party support at the end of your Oracle support period (upon renewal). It’s best to time the move for when your current support term expires, to avoid overlap. Mid-term switching isn’t practical once you’ve paid Oracle for the year.

Q5: Does leaving Oracle support affect compliance?
A: No. Ending support doesn’t cancel your PeopleSoft license rights. As long as you follow your license terms, you’re still compliant. Oracle might audit you, but your licenses remain valid.

Q6: Can Oracle penalize me for moving off support?
A: No. Oracle can’t fine you for leaving their support. You’ll lose Oracle’s updates/services, and they might audit you more closely, but there’s no contractual punishment for switching providers.

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