As 2019 drew to a close, many of you may have missed a significant development that came out of the U.S. District Court of Northern California. On December 17th, the lawsuit brought by the Sunrise Firefighter’s Pension Fund against Oracle Corporation for misleading investors on their cloud business – was dismissed. They have until February 2020 to make some changes and refile the case, but what the real take-away from this case is that we can expect ‘business as usual’ from Oracle on the audit front. To get a real sense of just how egregious and critical the audit practice was (and is) to Oracle’s revenue machine, you need only read some ...
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Clients are well advised to include specific language governing Oracle audits. Most important is the ability to purchase any compliance licenses as a result of an audit action at the contractual price hold discounts (#12 on our Oracle's Most Egregious list), and in the event that the price hold expires, at a mutually agreeable discount at the prevailing discounts available in the market for similar deals not to be unreasonably withheld. The current contract language in the standard Oracle agreement requires clients to purchase compliance licenses at list price. In the case of a 75% price hold discount, ...
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What is Auto-Install? Auto-Install is an executable file in the Oracle software kit that activates when a customer installs certain software and automatically loads various options that may or may not be included in the purchase price of the acquired software. Why is it Important? It’s important because generally the people who install the Oracle software are not contextually aware of all the intricacies of software licensing, nor perhaps are they even aware of the particulars of the commercial arrangement between your company and Oracle. They are, however, generally fans of the Oracle technology, and want all the added features, so when ...
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Business Transaction Protection is language in the agreement that provides some much needed flexibility in the event of a business transaction that significantly alters the value of the Oracle software deployment Why is it Important? These business transactions are often the source of many audit demands, and the standard Oracle language is vague and limited on what rights a customer has with regard to these types of transactions. We suggest clients include language in the agreement that gives added protections and flexibility for business transactions like mergers, acquisitions, divestitures, carve-outs, etc. Transition Service Agreements ...
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Why is it important? It’s important because many of our clients have multiple operating environments in different business units, sometimes in different geographies or even countries, and sometimes these are unrelated businesses that just so happen to be owned by the same company. In many cases, there is no relation between the needs of the operating environments, and therefore any policy to enforce equal treatment is unjustly onerous and costs our clients dearly. The business reason Oracle cites is to prevent customers from having many similar licenses, but only supporting a few of them, which makes it difficult for Oracle to determine ...
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This latest installment is probably one of our shortest, but no less important! In the standard Oracle agreement, Oracle refers to externally controlled websites for things such as the definition of support, and as such, they have the unilateral ability and control to fundamentally change the terms and conditions of your agreement without you even knowing about it until it is too late. Even if there is notification, over time these communications get lost, people leave who were points of contact, and or it may never have gotten sent to start with. We have many suggestions for Oracle's customers in this area around notifications, potential ...
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What is the Bundling of Support? The bundling of support is Oracle’s long-standing policy to sell product upgrades and technical support together as a single offering, and not allow customers to buy them separately. Why is it important? It’s important because in mature deployments, many customers no longer need product upgradability, but they still want access to technical support for the appearance of risk mitigation. In those instances, they are forced to pay for one to get the other. Oracle combines technical break/fix product support with product upgradability (the rights to upgrade the product with no additional software license ...
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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, ...
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What are reduced minimums? When Oracle licenses certain software by various metrics (other than their preferred metric of Processor), Oracle is responding to customer demand for an improved metric designed to provide some economic relief, generally for non-production use. Most commonly, Oracle agrees to allow its customers to license certain environments (like test or development environments) by named user, instead of by processor. In so doing, however, Oracle generally requires user minimums (a minimum number of users that have to be licensed in order to receive that benefit), so as not to give too big of a financial concession to the ...
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In our previous posts, we have reviewed the need for: Price Holds Maintenance Freeze And in this post, we will discuss the need for caps on the Annual increases for Maintenance and Support Services. Support Caps What is a Support Cap? A support cap seeks to place limits on the compounded effect of annual increases to the costs of the annual maintenance and support services fees beyond the Maintenance Freeze term. Why is it Important? If there is no language to govern the amount of increase after the Maintenance Freeze (#11 in our list) term, the costs of annual maintenance and support services can skyrocket and quickly get out of ...
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