Surviving an Oracle License Audit

Surviving. For most organizations that’s what it can feel like at the end of an Oracle software license audit. It can feel like your castle has been invaded and ransacked. A small band of soldiers, backed by the might of the Oracle army, told you to lower your defences and you did. They marched right on in, asked you to tell them where you kept your gold and took as much as they could carry. Not only that but you helped carry it out of your castle for them.

Perhaps that’s an extreme analogy but we hear time and time again that Oracle have used their might to pressure organisations into handing over money for license shortfalls they didn’t agree with or were unaware of.

This blog post aims to summarize Oracle’s approach, their tactics, and what you can expect at the end.

The Rules of Engagement

So why is this article about Oracle and not IBM, Microsoft, Symantec or any of the other big vendors? It’s not only Oracle that have dedicated auditing teams. The answer, and perhaps why you’re reading this, is that Oracle is the most aggressive auditor out there. Perhaps you’ve already experienced their approach? Much of the feedback we get from customers tells us that Oracle care little of relationships or fairness and instead use their own interpretations of their license agreements to identify shortfalls for maximum financial gain.

Taking Aim

Where perhaps Oracle doesn’t differ from other vendors is in the audit process and in the end goal. Oracle’s audit process is much the same as any other major vendor; there’ll be a kick off meeting, the scope will be defined, you’ll provide hardware and software deployment data and they’ll tell you what they think that means when reconciled against your license grant. While some vendors are genuinely light touch, seemingly looking to make sure you have all the software you need, most are looking for one thing: money.

But here’s where it gets complicated and perhaps the part of this blog in which you’ll be most interested. Customers always ask us what Oracle is likely to settle on based upon the review that we’ve carried out for them. They ask us what the shortfall represents in financial terms so that they can budget for it. Well, the answer is ‘we don’t know’.

We don’t know because we can’t read the minds of the LMS (Oracle’s License Management Service) team. We can tell the customer what the first figure will be once Oracle presents its findings. They’ll come at them with the highest figure possible, which will likely include two years’ back support as well as license and one year’s future support costs. This could be at MSRP or at an agreed discount cost. What settlement figure they actually have in mind is anyone’s guess.

Negotiating a Truce

Although they would never confirm it, it’s in the interest of the LMS team to find license shortfalls in order to generate further revenue. Importantly, they’ll be motivated to tie you into subscription or long term support contracts. However, they’ll need to settle on a realistic figure: one they believe your organization can pay.

So, there are some things we can predict and some things we can’t. We can predict you’ll be pushed towards the cloud and/or long term support contracts. We know they’ll start ‘negotiations’ with the highest possible figure so that any reduction will appear to be a win for your organization. We know that they’ll use their interpretation of the license agreements for maximum financial gain: interpretations that you may not agree with. What we don’t know is what figure they’ll be willing to settle on.

Raising the Drawbridge

If Google led you here, then you’ve no doubt received the dreaded letter from the LMS team. If you’ve been proactively managing your estate, then you’re already at an advantage. Hopefully you’ve had SAM experts managing your complete Oracle software lifecycle and are aware of the license position. If that’s not the case what can you do?

It may not seem like you can do much and by all accounts that’s close to the truth. By the time you receive the letter there’s not much you can do if you have genuine license shortfalls. Buying new licenses at that point makes you look guilty (unless it was always the plan) and changing the configuration of your software or hardware estate is risky for several reasons, but there are some things you can do to minimize the pain you’re about to go through.

If you haven’t already, this is the point at which you need SAM experts on your side. Oracle isn’t looking to protect your interests, so you need a team that will. The right people can make sure the scope of the review is as limited as possible. They can make sure that Oracle is kept in check; that they don’t ask for information they shouldn’t be asking for, or talking with people that don’t need to speak to. The right people can also review all data before it’s passed on to Oracle. Any identified shortfalls can be queried and all efforts can be made to mitigate or argue against the outputs.

Oracle isn’t going to make it easy for you. Maybe you can hold them off for a short time before they march in. Perhaps they’ll take less of your gold than they said they’d take. However, if you seek out the help of the SAM warriors, maybe they can hold that drawbridge up for longer. Perhaps they can arm you with the right weapons to fight back. Maybe, just maybe, they can stop the great Oracle army from taking your gold.

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Paul Mitchell

Paul Mitchell

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