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Councils continue to spend on Oracle despite budget constraints

Local authorities face a challenges balancing their meagre budgets with services they can afford to provide, but spending on Oracle seems to be increasing

Despite local authorities facing budget cuts, spending on Oracle appears to be increasing, according to a Freedom of Information (FOI) request conducted by database firm TmaxSoft.

Out of the 60 councils that responded to its FOI request, TmaxSoft reported that just under a third said their spend on Oracle had increased by 20% in the past two years, with 2% stating their spend had increased by more than 100%.

According to TmaxSoft, a fifth of councils that responded to its FOI request stated that they had spent more than £100,000 or more on Oracle in the past two years, with 2% saying the spend had tipped the £500,000 mark.

TmaxSoft said councils also appear to be being tied into long-term licensing arrangements. It found that more than 20% said their existing licensing agreement was over four years, while 43% stated between one and two years.

Out of those who responded, 5% had an Oracle audit in the past year, which equals roughly 21 of the 418 councils in the UK.

“The pace of the audits conducted by Oracle must be a concern for local councils,” said Carl Davies, UK CEO at TmaxSoft.

“It is, of course, the responsibility of the council to make sure that it adheres to the terms of its software licenses but, with Oracle auditing just 5% of councils per year, there is a real risk that some cash-strapped local authorities may be operating outside of the remit of their software licenses without knowing it.

“This could have very expensive ramifications, as councils may find themselves forced to purchase additional, costly licenses from Oracle,” he added.

Many councils find themselves operating in an opaque, rigid licensing system, where they often do not know exactly what they are paying for and how many licenses they need. However, as Computer Weekly has previously reported, CIOs are in a far stronger position than they think.

Read more about Oracle licensing

  • An eight-step guide to tame the Oracle auditors. Don’t take the bait...
  • Surviving an Oracle audit comes down to understanding what’s being asked for, good software license management and preparation.

In a recent Computer Weekly article, licensing expert Robin Fry wrote: “Despite Oracle’s $170bn might, and a 39-year history in which to have fashioned the toughest contracts to its benefit, the truth is that Oracle’s audit rights are weak and ambiguous. They do not give it the rights that its licence management service [LMS] team and CIOs assume.”

Specifically, some organisations may be afraid their licensing restricts use of Oracle. For instance, Oracle could charge for a whole physical server, since its licensing does not appear to recognise soft partitioning on certain hardware.

Like many Oracle database alternatives, TmaxSoft’s rival database does recognise virtual environments. “TmaxSoft’s RDBMS, Tibero, is designed to address many of these issues,” said Davies.

“Tibero bridges the gap between outdated relational databases and the new paradigm of running workloads in virtualised data centres and the cloud, allowing local authorities to fully leverage their investment by embracing a simple, true utilisation licensing model,” he said.

Read more on Software licensing