Evaluate Weigh the pros and cons of technologies, products and projects you are considering.

Take control of your Oracle contracts -- and stop fearing Oracle

Dealing with Oracle on software contracts can seem like a scary task, but it doesn't have to be if you take control of the licensing process.

I worked at Oracle for over 15 years. A good part of that time, I ran its global contracts and business practices...

teams. When I left Oracle in 2011, I really thought I had seen it all on Oracle contracts and how Oracle works with its customers. Boy was I wrong.

For the last five-plus years, I've been on the other side of the table, helping Oracle's customers with their software licensing and contract challenges. While no two client engagements are exactly alike, there are similarities that run through many of them.

One trend we see over and over is the absolute fear many companies have of Oracle and its aggressive legal tactics and business practices. While it's normal to be worried about a negative license audit, some of the concerns we hear are over the top.

I'm paraphrasing, but here are some real examples from clients with Oracle contracts:

  • "We signed the deal because we don't want to make Oracle mad at us."
  • "We bought the cloud subscription because we're afraid Oracle will audit us."
  • "We have to renew now because it's Oracle's year end, and we can't get Oracle upset."
  • "I can't move off of the Oracle product because I don't know what Oracle will do to me once it finds out."

Part of me is very jealous of Oracle. The company is obviously doing something effective to get its customers so worked up that they turn over millions of dollars because they're afraid of it. I can't even imagine getting one of my clients to sign a contract with our firm because they're worried about making us mad. That just sounds nuts!

An uncommon hold on customers

In most sales situations, no matter what your business is, you want your customers to at least want, or even need, your services. Is there another IT company that has this type of hold on their users? Does SAP? IBM? I don't hear my clients talk about these other vendors the way they talk about Oracle.

The good news here is that companies and individuals don't have to be afraid of Oracle. Really, you don't. And it's not because the fears are overblown. In fact, they aren't.

If you do something Oracle doesn't want you to do (such as give it less money than you have been), Oracle won't be happy. The company will try to find a way to get at your budget and push you to buy more of its products. If selling the value of using them doesn't work, Oracle will do it with audits -- or even just the hint of an audit. The worries are well-founded because making a mistake can cost you $1 million, $10 million or more.

But just because you should be worried doesn't mean you're powerless. The secret here is that companies that take control of their Oracle contracts and the licensing process don't make decisions based on fear of Oracle. They make decisions based on what's in their best interests.

Let's say you've decided to move off of Oracle's business applications and onto Salesforce. If you know that you're complying with your contract, who cares if Oracle audits you? Yes, audits by Oracle's License Management Services group can be a brutal thing to go through -- but if you're in compliance, you don't have to worry about the outcome of the audit.

Keep your cool in contract negotiations

Take another example. Many companies that have an Unlimited License Agreement with Oracle are afraid to get out of it and to certify their actual usage of Oracle's software, even though paying by the number of separate licenses that they need might save them money. Why? Because they're scared of Oracle's certification process and what it might produce.

But companies that are proactive can implement their own certification process and methodology upfront. There's no need to fear Oracle here because you can control the entire exercise.

What if you want to use more Oracle technology? The same rules apply. I've seen too many companies sign Oracle contracts prematurely because their Oracle sales rep wanted to close the deal before a quarter ended, and the customers were afraid they wouldn't get the same deal in the next quarter. Again, you don't have to be afraid. You will get that same discount in the next quarter if you stay on top of your Oracle licensing -- and retain your leverage.

Oracle's fiscal year ends in May, which is by far its biggest sales month of the year. This May, we saw Oracle pushing its customers to close deals harder than ever. Oracle's push to the cloud is really just that; Oracle is pushing users to go to the Oracle cloud whether they want to or not. That makes it even more important for companies to take stock of what Oracle products they own and how much they're using the software -- and to take control of their Oracle contracts.

Once you do so, you don't have to be afraid of Oracle, and you don't have to be pushed by Oracle into spending money that is best used elsewhere by your company. Think about it: How good will you feel when you aren't afraid of Oracle anymore? 

Next Steps

Common traps to help you prepare for an Oracle audit

Watch for vendor lock-in on Oracle contracts

The risk of turning down Oracle licenses

This was last published in June 2017

Dig Deeper on Oracle governance, risk and compliance

Join the conversation

2 comments

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

How did your last contract negotiation with Oracle go?
Cancel
Interesting!
Cancel

-ADS BY GOOGLE

SearchDataManagement

SearchBusinessAnalytics

SearchSAP

SearchSQLServer

TheServerSide

SearchDataCenter

SearchContentManagement

SearchFinancialApplications

Close