A group of former Oracle executives with roles on its software compliance teams described the close ties between Big Red’s audit process and its drive to increase revenue.
Speaking in a webinar aired last week, Adi Ahaja, senior director of Palisade Compliance and former head of Oracle Licensing Services (LMS), said Oracle’s audit has become “a tool for ‘sales aid”.
[S]ales has much more power within Oracle than the audit team. If reps want something done, they get what they want
Oracle’s website states that Oracle LMS “operates independently of any ongoing commercial discussions. Our services are provided by a global team of highly experienced and knowledgeable consultants who collectively offer unparalleled knowledge on all aspects of licensing policy. of Oracle”.
However, in practice, there was a close relationship between sales and license audits, Ahaja said.
“Some sales targets are based on audit numbers and the revenue generated from client audits. It’s not like they just do it in a vacuum. Typically, [auditors] obtain permission or approval from the [sales] team, so they are aware; and sales have a lot more power within Oracle than the audit team. If sales want something done, they get what they want. Most of the time, the audit has become a sales support tool. The auditor comes in, finds levers and hands them over to the business team and you negotiate with them.”
Ahaja was speaking at a webinar from Palisade Compliance, a company that advises and represents Oracle customers in issues and disputes regarding licensing of Big Red’s software.
Speaking on the call, Craig Guarente, CEO of Palisade and former Oracle lead on the LMS team, said attendees represented 50 years of experience dealing with Oracle licensing practices.
He noted that there was nothing illegal about Oracle, or any other company, using auditing to generate revenue.
However, Ryan Bendana, director of delivery for Palisade Compliance, said Oracle’s LMS is there to help sales teams facilitate conversations.
“Oracle has a lot of sales reps and they’re all very hungry and they’re all eager to try and sell something. A lot of customers tend to get annoyed with Oracle for a good reason. LMS is actually a great facilitator to open a dialogue, and that’s what sales do.”
The register asked Oracle for their perspective.
Oracle customers also experience licensing challenges in VMware environments, other Palisade experts said.
The issue dates back to 2015 after US confectionery giant Mars sued Oracle in the US over its licensing terms following an audit. Mars was represented by Palisade.
The register found that similar issues were affecting a number of customers. Oracle does not accept VMware’s worldview on licensing and its definition of hardware partitioning. An Oracle partitioning document showed that it only accepts Solaris containers, IBM’s LPAR, and Fujitsu’s PAR. VMware was not on the list of hard partitioning partners.
Ahaja said one of the biggest misconceptions about Oracle audits remains around the VMware issue. “It’s in the middle of every audit and the engine of half their transactions. I always find that weird.”
The panel also discussed the challenges of migrating Oracle users to the cloud and the licensing pitfalls this transition could present.
Oracle last year failed to block a lawsuit alleging it had inflated cloud revenue with questionable sales practices, although the provider managed to narrow its reach. Big Red denies a claim made by an investor group led by the City of Sunrise Firefighters’ Pension Fund in 2020 that alleged Oracle misled investors about sales of its cloud products by threatening expensive software license audit customers unless they agree to use Oracle Software’s cloud. The most recent amended complaint in the case was filed in June [PDF] Last year.
During the Palisade webinar, Max Shlopak, head of strategic delivery and former senior Oracle executive at LMS, said there was a general tendency for Oracle to want to create license doubt when transitioning to the cloud.
“Oracle wants all customers, all of its customers, to migrate to Oracle Cloud, and they’re trying to create all kinds of barriers that might deter customers from moving to another cloud provider. For example, [they might say] you need double the number of licenses, as in some white papers. They might say you can’t access this cloud because you can’t get support from Oracle for deployments. The list is lengthened increasingly. Most – if not all – actually amounts to the fear, uncertainty and doubt they are trying to create.
“The reality for all customers is that they really have to go back to what is in their contracts with Oracle. Not Oracle’s interpretation, especially the interpretation of the wisdom of their sales teams, but the real contracts real Oracle images in black on white.” ®