Oracle Series: Countdown of the Top Twelve (most egregious) Oracle Terms and Conditions, #8 License Exchange

What is a license exchange?

A license exchange is a private market setup between you and Oracle, whereby you can ‘trade-in’ the list license value of software you no longer want or need for a list license value credit on new titles you do want. 

Why is it important?

It’s important because absent this protection, it’s exceedingly difficult to get any value from software that you no longer want or need, and in many cases, it’s because the software didn’t work the way you thought it was going to work, or it didn’t provide the level of value you needed to justify its use. 

The other critical flaw in the Oracle approach to licensing management, is that they will often require you to migrate your licenses from one version to another, or even from one product to another.  In the cases of license migration, you are often required to pay a migration fee and a license upgrade charge both of which carry incremental support as well as continuing to pay the full burden of the underlying original maintenance in perpetuity.  This “binding” effect of legacy maintenance costs Oracle’s customers millions.

In real world terms, a customer with a list license value of $2M, a net license value of $1M, and an existing maintenance obligation of $220k per year that migrates to a new net license of $500k, will not pay $110k in annual maintenance and support services costs as you might expect, rather they would pay $330k as the migrated maintenance is additive to the legacy maintenance.  In our direct experiences, this policy has been enforced numerous times even when it is quite clear that the client could simply dispose of the legacy licenses, terminating the usage rights, buy the migration license at market value, and pay considerably less overall. 

Amazingly, Oracle has even erected policies that attempt to prevent its customers from this very behavior, making it nearly impossible to escape punitive maintenance costs from impaired Oracle assets. NET(net) has have helped our clients avoid this trap after the fact.  Obtaining a license exchange as a contractually agreed vehicle can save countless hours of headaches and countless millions of added fees.

To learn more about these terms from the experts at NET(net), please contact us today, and we'll arrange for call to discuss your situation.

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