Oracle pockets a whooping 85 % profit margin on maintenance contract

Wall Street Journal reports, Oracle Corp.’s lucrative business selling maintenance contracts could come under pressure if companies turn to lower-cost alternatives as the recession drags on.
Consider Santa Fe Natural Tobacco Co. The small cigarette maker, which is a unit of Reynolds American Inc., recently switched its service contract for Oracle human resources software to Rimini Street Inc., a software support company that says it charges half of what Oracle does.
“We were paying higher fees,” Rusty Gaston, Santa Fe’s chief information officer, said of the Oracle contract. “And getting no more for it.”
How many of Oracle’s customers follow suit is an open … Read More