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It appears the frustration with Oracle’s practices has moved at least one national government to investigate and find fault with Oracle’s tactics.  Chile’s National Economic Prosecutor (the FNE) conducted an investigation of Oracle’s licensing and audit practices for possible anticompetitive practices.  In particular the FNE looked at approximately 100 clients, many of them large sophisticated Oracle clients to determine why Oracle found them out of compliance and forced them to pay large sums of money to Oracle.  This move by the Chilean government may be the first salvo in a move by governments to take back control of their relationships with Oracle.

What the FNE discovered was that Oracle’s audit results found customers to be out of compliance because of a incorrect or automatic installation of products where customers did not know, and were not warned that a separate license was required. The FNE found that 64% of clients were negatively impacted by Oracle’s process of automatically installing products.

In addition to installing products automatically, the FNE found multiple other problems with the way Oracle does business.  These include:

  • Oracle pushing cloud to resolve audits even when the customer did not want cloud
  • Aggressive sales tactics to force customers to sign contracts quickly without allowing for a proper review
  • Changing policies on a website rather than informing clients directly
  • Faulty findings from the LMS audit team.

The list goes on with many other issues being identified by the FNE.  For more details you can find a report from the FNE here.  According to the FNE website, at the end of this investigation Oracle agreed to the following steps:

  • Improve information on products related to those for which customers acquire a license, but that may have an additional cost and require a separate licensing agreement, incorporating a notice on the product download page and sending a communication to Customers, both new and current.
  • Improve the information provided in the letters of initiation and closure of the audit processes.
  • Improve the visibility for customers of the tools that allow them to internally verify which Oracle products have been downloaded and / or are being used in their systems, in order to determine if it is necessary to acquire additional licenses and / or if the company’s policies are complied with. Oracle licensing.
  • Create a special contact so that customers can escalate disputes and claims.
  • Implement local training to workers in the division called License Management Services of Oracle (LMS), in charge of audits.

At Palisade Compliance, we’ve worked with government agencies at both the Federal and State levels in the United States.  We’ve also worked with governments outside the U.S.  Our experience shows that the frustration levels with Oracle in the commercial sector are equally matched in the government sector.

Many government agencies have signed huge ULAs with Oracle and are forced to pay support costs in the multimillion dollar levels often for products that are not in use or not required.  While governments are looking to reduce their Oracle spend, Oracle is looking to get a bigger piece of the pie.

Given the findings of the FNE (which are no surprise to us at Palisade since we’ve been helping customers with these very same issues for years), and ongoing revenue push by Oracle,  it’s only a matter of time before the next large government agency looks to start their investigation.  Of course, Palisade will be available to help!

Co-authored by Craig Guarente and Luis Nunez

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