”Thomas Jefferson said that eternal vigilance is the price of liberty. It seems that the same is true when dealing with Oracle licensing.”
— Dan Woods, Early Adopter Research
If your ERP software is Oracle, you’re in a business relationship with Oracle. How would you say the relationship is going? Great products at a great price with great service? Or something other than that?
If your answer is the latter, Oracle probably has the upper hand in your relationship. And if so, Dan Woods of Early Adopter Research has advice for how to shift the balance of power more toward your organization’s favor while protecting your IT budget from expensive support and audits.
Woods relays his advice in a series of in-depth articles about Oracle licensing compliance and Oracle support. His high-level recommendations include:
- Understand Oracle licensing compliance and find non-Oracle alternatives.1
- Prepare for an Oracle audit before you have to.2
- Determine your risk level and use it as a tool to improve your position in the relationship.3
- Understand major fears of ending Oracle support and what the remedies are.4
Understanding Oracle Licensing Compliance
According to Woods, the keys to Oracle license compliance are understanding what you’re entitled to under your contract, determining if you are over- or under-licensed, then working to get or stay in compliance as quickly as possible.1 Complicating factors, explains Woods, are the ease with which your employees can download Oracle software (no license keys are needed), as well as the variety of licensing forms that are still intact, inherited from companies that Oracle acquired.
The greater the variation in licensing terms and the greater the quantity of software downloaded by employees, the more difficult it is to track usage and Oracle license compliance. Woods recommends getting ahead of this before Oracle can “make short work of finding just how far out of compliance you are.”1 He also recommends identifying alternatives to Oracle products and Oracle support—and identifying the risks of choosing those alternatives—for leverage in a potential Oracle negotiation.
Preparing for an Oracle Audit Before You Have To
The Oracle relationship, maintains Woods, is complex. Over time you are likely using many Oracle products, and Oracle support is a major line item in your IT budget. “Many (if not most) companies,” says Woods, “are found to be out of compliance, which costs them money.”2 The relationship, he says, “must be controlled, or it may control you.”
Woods recommends six steps to help you get what you want out of your Oracle relationship and prevent IT budget damage from an Oracle audit. The steps include actually auditing yourself, educating employees about Oracle license compliance, and sticking to the plan.2 Interestingly, “do not call your Oracle rep for help” is also an important step in the process. It’s “a sure invitation to an audit,” says Woods. Get outside license compliance expertise if you need it, he recommends, because it can save you money.
Improving Your Oracle Licensing Compliance Risk Level
Where are you on the risk scale of an Oracle audit and how does that position impact your bargaining power in your Oracle relationship? To answer this, Woods presents a self-diagnostic tool and framework called the Four Zones of Freedom from Oracle.3 Your goal, explains Woods, is to be in a position of full compliance where you need value—value that Oracle will want to sell to you—rather than being out of compliance and vulnerable to a large technology bill from an Oracle audit.
The framework ranges from the red zone of unknown Oracle license usage and unknown risk to the green zone of optimized Oracle usage and freedom from Oracle lock-in.3 Get yourself into a position where you could walk away from Oracle technology if you had to, recommends Woods, in order to make this a credible threat in an Oracle negotiation. Identify and correct any uncontrolled risk as soon as possible, he advises, to prevent the absence of negotiating leverage and additional costs.
Addressing the Fear of a Move to Third-Party Support
If you’d like to escape your support relationship with Oracle altogether rather than shift the balance of power, Woods has a recommendation: move to third-party software support. With that idea comes fears, he recognizes; he also offers remedies for the fears.4 Three of the biggest fears concerning a move to third-party support, says Woods, are cybersecurity breaches, missing out on Oracle “innovation,” and the viability of third-party support itself.
In debunking these fears and others, Woods explains that:
- Oracle licensees are at greater cybersecurity risk on outdated software and Oracle Sustaining Support than they are with third-party support
- inspection of the Oracle “Continuous Innovation” model reveals more minor enhancements to existing features than major new innovations
- the benefits of third-party support are “too profound to ignore,” and leading analysts like Gartner confirm it as an established option4
Take Your Next Step
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1 Early Adopter Research, “How to Gain Control Over Your Business Relationship with Oracle,” December 4, 2017.
2 Early Adopter Research, “Get Your Oracle Spend Under Control,” December 9, 2017.
3 Early Adopter Research, “Four Zones of Freedom from Oracle,” June 17, 2019.
4 Early Adopter Research, “The Psychology of Overcoming the Fear of Ending Oracle Support,” January 20, 2021.