Navigating NetSuite Licensing: The Hidden Costs of Dropping ACS and Switching Resellers

NetSuite’s pricing and licensing structure can be complex, and many businesses don’t fully realize the potential cost implications when trying to adjust their licensing agreements. A recent example that highlights these challenges involves a business that attempted to drop Oracle's Advanced Customer Support (ACS) service, only to face a steep increase in their ongoing licensing costs. This situation is not unique, and it serves as a cautionary tale for businesses considering renegotiations or switching resellers.

The Hidden Pitfall of Dropping ACS

Advanced Customer Support (ACS) is a service that many NetSuite customers purchase as part of their initial agreement. It provides access to Oracle's dedicated support team, offering enhanced troubleshooting, prioritized case handling, and more. However, businesses often come to a point where they feel they no longer need ACS—perhaps because they have an experienced internal team, or they want to lower their overall operational costs.

In this particular case, a company reached out to discuss renegotiating its licensing agreement. They had signed up for ACS the previous year but decided not to renew it for the next term. However, when they informed Oracle of their decision, they were met with an unexpected response: Oracle stated that not renewing ACS would void the originally agreed-upon 5% renewal cap on licensing increases. Instead, they were faced with a proposed 28% increase on their ongoing license fees—or, as an alternative, a 3-year renewal with a reduced increase.

The Real Cost of Switching Resellers

The situation grew even more complex when the business asked if they could switch their licensing to a different reseller. The question arose: Could they move to a reseller while maintaining their current software without needing new implementation services, since they were already using NetSuite?

The answer is yes—it is possible to switch your reseller. However, this process needs to be done within a specific timeframe, often with strict conditions attached. Timing is critical, especially if you are up against a renewal deadline. In this case, the company had a 30-day renewal deadline, making the window for switching resellers quite narrow.

But switching resellers isn’t as simple as just transferring the license. It requires understanding the impact on your entire agreement, including licensing terms, support services, and potential price adjustments. If you're moving to a reseller who offers better terms, you may be able to secure more favorable pricing—but if you’re not careful, you could find yourself locked into a more expensive deal than anticipated.

What Does This Mean for Your Business?

For businesses that are considering renegotiating their NetSuite licensing agreements, there are several critical factors to keep in mind:

1. Dropping ACS Can Lead to Increased Costs: While it may seem like a cost-saving move to drop ACS, this decision can trigger a much higher ongoing license fee if the renewal cap is removed. Be prepared for potential increases that could erode any savings.

2. Timing is Crucial: If you’re thinking about switching resellers, make sure you’re aware of any renewal deadlines or window periods. Missing these windows can lock you into unfavorable terms or prevent you from switching altogether.

3. Understand the Long-Term Impact: It’s not just about the immediate renewal or licensing cost. Altering components like ACS, or changing resellers, could affect your overall relationship with Oracle and your ability to negotiate better terms in the future.

Kimberlite Partners: Helping You Navigate NetSuite Pricing

At Kimberlite Partners, we understand the complexities of NetSuite licensing. We offer an alternative to the typical ACS offerings, helping businesses manage and control their costs while optimizing their NetSuite environment. Our experienced consultants can guide you through the nuances of licensing, whether you're looking to renegotiate your agreement, switch resellers, or drop services like ACS.

If you’re facing challenges with your NetSuite pricing, it’s essential to partner with a trusted advisor who can help you make informed decisions that align with your business goals. Don’t navigate these tricky waters alone—reach out to Kimberlite Partners to learn how we can help you save money and simplify your NetSuite experience.