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CCL Study Slams Oracle's Software Licensing Practices

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CCL Study Slams Oracle's Software Licensing Practices

November 07, 2014
By Tara Seals, TMCnet Contributor

Oracle (News - Alert) has to do a much better job in its interactions with customers, according to a report by the Campaign for Clear Licensing (CCL).


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

Audits and the overhead involved with them contribute to a large part of the dissatisfaction. For instance, Oracle reserves the right to audit as part of their contract with customers. However, audit requests from software publishers can arrive in different shapes and sizes to different contacts within the customer’s organization. When respondents were asked to rate whether Oracle audit requests were clear and easy to respond to, 88 percent either disagreed or strongly disagreed.

“Modern audits with software publishers are no longer only about reducing compliance (not in developed countries at least),” CCL (News - Alert) explained in the report. “Modern audits are more about revenue generation for Oracle. Typically, due to a poor working relationship and mistrust, software publishers must audit their customers to build sufficient data to drive the next sales deal. Similarly, organizations typically have insufficient governance controls in place to defend themselves.”

Meanwhile, Oracle's Global License Management Services (LMS) describes itself as an organization that “promotes the management, governance and awareness of the proper use and distribution for Oracle systems through expert services.” But when asked whether the Oracle LMS team had been helpful during the audit, contract renewal and negotiation process, only 22 percent agreed that LMS were helpful.

Another question to respondents attempted to ascertain the business value of working with Oracle LMS, and whether it would lead to a better relationship with Oracle and ultimately more spend.

“In this case Oracle LMS faired only slightly better than in previous questions, with 24 percent stating they agreed that working with Oracle LMS would lead to a better working relationship and increased spend with Oracle,” CCL said. “However, the vast majority disagreed, but felt that if there were an improvement in the way LMS operated that could influence the quality of their relationship with Oracle.”

CCL’s advice on managing Oracle relationships is a mixed bag:

  • 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.

While every organization entering into contracts must be accountable for the agreements they purchase, Oracle places a disproportionate amount of risk and management overhead towards their customers, CCL concluded.

“Historically, organizations have not allocated sufficient resource for managing Oracle and have been on the back foot in negotiations,” it said. “Oracle customers should think carefully about their choice of vendor. Senior management should be aware that any Oracle purchase includes a significant management overhead and should budget accordingly.”




Edited by Alisen Downey

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