Users warned over 'aggressive' Oracle software licensing tactics

Oracle has been slammed by a new report for its lack of transparency and aggressive sales practices

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Oracle has been slammed for its lack of transparency and aggressive sales practices, in a report by the Campaign for Clear Licensing (CCL).

The Key Risks in Managing Oracle Licensing study found that only 8% of users said their relationship with Oracle was "acceptable". In the survey of 100 Oracle customers, 92% disagreed or strongly disagreed that communication from Oracle had been clear and straightforward.

"While every organisation entering into contracts must be accountable for the agreements they purchase, Oracle places a disproportionate amount of risk and management overhead towards its customers," the report said.

Software audits are more about revenue generation for Oracle, the report warned: "Senior management should be aware that any Oracle purchase includes a significant management overhead and should budget accordingly."

CCL urged Oracle customers to think carefully about their choice of enterprise software supplier. One Oracle customer quoted in the report said: "Oracle is one of the most difficult software vendors when it comes to licensing. They have made it very difficult for customers to move licensing as customers consolidate datacentres or move to the cloud."

CCL advice on managing Oracle

  • Do nothing – accept the risk and budget for the worst.
  • Vote with your feet – find alternative technology to Oracle with less management overhead, simpler licensing terms and customer-focused ethic. Ultimately hitting Oracle in the wallet will force change.
  • Manage it proactively – if you can’t manage the metrics in an agreement on an ongoing basis you shouldn’t be deploying it. Assign resource for proactive management.
  • Change the agreement – Work with Oracle to pick a metric or a framework you can manage. Pick a game you can win. Renegotiate your audit rights. Seek clarity on who the notice is sent to, the timeframes between notification and audit, the requirement to work within customer confidentiality agreement of results, How disputes will be managed etc.

Source: Key Risks in Managing Oracle Licensing, report by Campaign for Clear Licensing

Martin Thompson, founder of the Campaign for Clear Licensing and author of the report, said: "Based on our research and conversations over the last six months, we have found that customers’ relationships with Oracle are hostile and filled with deep-rooted mistrust."

While researching the report, Thompson said he found huge silos in Oracle: "Customers get passed around between sales and contracts, which is very frustrating."

When asked about Oracle's Licence Management Service (LMS), which is supposed to help organisations audit their licences, another user said: "It is my experience that the LMS representatives have a direct relationship with sales. So it is very hard to trust them with sensitive information. For instance, in a recent licence certification process, I shared a preliminary report which was meant to make clear what types of data we will pass onto Oracle. A while later, those figures ended up as a compliance claim."

Thompson said: "People should be aware that while Oracle may have superior technology, you have to look at the total cost of ownership. It may be better to choose lesser technology." He also recommended that CIOs enter an Oracle contract with "their eyes wide open". Thompson said: "If you are going to spend a million pounds with Oracle, set aside a budget as the contract will need managing."

Thompson added that none of the top 10 software providers are particularly easy to deal with. But he said: "Oracle is particularly difficult. Too much of the responsibility is pushed back to customers, who get little help from Oracle."

Thompson recommended that organisations include licencing within change management policies. He said: "If a server falls over, the server team may throw more cores and CPU – and this will increase the licensing."

Piaras MacDonnell, a specialist in software licensing within large datacentres and founder of SureDatum, said: "Virtualisation is a massive risk for Oracle customers. It does not recognise the virtualisation software of any other supplier."

In particular he warned companies using VMware to be wary when using vMotion, since it allows live migration of running virtual machines (VMs) between physical servers. Even if a company chooses not to run vMotion, MacDonnell said it would still need to licence for all physical processor cores, since VMware makes it very easy to move VMs, each of which has the potential to run Oracle.

In his experience many businesses tend to avoid fighting Oracle over licensing: "So many CIOs do not know for sure if they are compliant, it is easier to give Oracle £3-4m and they will go away for a few years. It is chequebook compliance."

The hidden licence costs are not the only costs impacting Oracle users, according to the CCL report. DevOps and the move to cloud-based applications means that IT has switched from two-year delivery cycles to continuous development and agile project management.

A traditional contract like a three-year software agreement does not work well in the agile world, especially if the supplier takes several weeks to reply to enquiries. As CCL's research has found, trying to get clarity on Oracle licensing is complex, which can delay projects.

To avoid this and reduce the licence overhead, some organisations are swapping out Oracle at contract renewal. For instance, the Met Office recently swapped out Oracle for PostgreSQL in a bid to reduce costs.

In July, Mark Flynn, managing director of the Campaign for Clear Licensing, warned users of the licensing impact of enabling Oracle's in-memory database feature. He noted: "From a licence compliance and risk perspective, Oracle is a loaded gun. Organisations should follow licensing best practices to minimise their exposure to unplanned spend and audit penalties."

The Campaign for Clear Licensing is running an Oracle licensing seminar on Friday 21 November at the BCS’s London office.

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