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November 11, 2014

Oracle must fix “hostile” customer relationships

Campaign for Clear Licensing calls foul play on Oracle's audit tactics.

By Joe Curtis

Oracle is guilty of creating "hostile" customer relationships based on confusing licensing agreements, according to a Campaign for Clear Licensing (CCL) study.

An overwhelming 92% of those surveyed blamed the database giant for failing to communicate license changes, while just 8% described their relationship with the company as ‘acceptable’.

The findings come from a survey of 100 Oracle customers, collected in a CCL report titled Key Risks in Managing Oracle Licensing.

As a result, CCL claimed Oracle customers do not feel in control of license negotiations, adding that inconsistent messages from Oracle over alterations to agreements help move the goal posts to suit its revenues.

CCL founder and report author Martin Thompson said: "Customers’ relationships with Oracle are hostile and filled with deep-rooted mistrust.

"Whilst every organisation entering into contracts must be accountable for the agreements they purchase, a disproportionate amount of risk and management overhead appears to be placed on the customer by Oracle.

"Similarly, many customers have not invested, or are not capable of investing, sufficient resource to manage their Oracle estate, or are aware of the investment in management overhead that they will require prior to engaging with Oracle."

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He added that customers’ dealings with Oracle were conducted at "arms length", and called on Oracle to address a number of issues to remedy the situation.

License Management Services (LMS)

Oracle’s LMS department came under particular scrutiny. One customer told CCL that "Oracle LMS operates from the tagline ‘we don’t care, we don’t have to’".

Just 22% of respondents found the department helpful during the audit and contract renewal processes, and CCL put a spotlight on "internal silos" causing confusion over customers who should seek licensing updates from – LMS, sales or contracts.

Oracle responsed within the report saying that it had trouble getting customers to complete feedback forms about LMS.

Clouded with doubt

Anonymous customers listed a range of issues with Oracle inside the CCL report, and one attacked the firm for making it difficult to move to the cloud.

The customer said: "Oracle is one of the most difficult software vendors when it comes to licensing; they have made it very difficult for customers to move licensing as customers consolidate data centres or move to the cloud."

This contradicts Oracle’s new cloud-friendly approach emphasised at Oracle OpenWorld 14 last month, during which CTO Larry Ellison boasted about the ability to shift database applications from on-premise to cloud and back at the click of a button.

Wider choice

CCL warned that organisations have, in the past, failed to allocate enough resources to manage Oracle deployments, putting them on the back foot in negotiations.

It added: "Oracle places a disproportionate amount of risk and management overhead towards their customers."

The body advised that senior managers should bear in mind that any Oracle purchase will drain more cash in management overheads, and must be budgeted for.

Historically organisations have not allocated sufficient resource for managing Oracle and have been on the back foot in negotiations.

"Modern audits are more about revenue generation for Oracle," the body warned. "Typically, due to a poor working relationship and mistrust, software publishers must audit their customers to build sufficient data to drive the next sales deal. Similarly, organisations typically have insufficient governance controls in place to defend themselves.

"Oracle customers should think carefully about their choice of vendor."

How Oracle can fix this

CCL outlined a series of issues Oracle must address to improve its relationship with customers, starting with one port of call for licensing management issues.

This was followed by a better knowledge base in order to educate and communicate effectively with customers. It must also reduce unnecessary risks for customers and become "crystal clear" during audits.

The news follows a scare in the Oracle community over fears its £14,000-per-processor Database In-Memory option could be turned on by a software bug in Database 12c.

After some back and forth between the firm and an ex-Oracle engineer who discovered the bug, it was revealed that the bug made it appear the feature had been enabled, but that the feature was not actually live. This resulted in no charge for customers.

Oracle declined to comment on the CCL report.

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