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It’s Oracle Open World this week and announcements are coming out fast and furious from the Redwood Shores juggernaut.  One of the most intriguing announcements this week is centered on Oracle’s “new” cloud services.  While other companies have been quicker to embrace the cloud and the Saas model, Oracle is now making a large bet on this industry trend.

As I read through the announcements and look at the offerings I’m struck that new Oracle customers might find the use of cloud services to be a good fit.  They would have little if any Oracle infrastructure in place and might find this a good way to start using Oracle.  My concern grows, however, when I think about existing Oracle customers, the ones who have spent millions of dollars on in-house Oracle products.   Not included in Oracle’s announcements this week are all the policies and rules and guidelines for how customers can apply their existing licenses to these new cloud environments.

For example, Oracle claims they can run Oracle products more efficiently than you.  So, if you have 20 processor licenses of Oracle database on your servers, and you move your infrastructure to an Oracle managed cloud environment that only requires 10 processors, will you still pay support on those unused licenses?  My guess is yes, but that is based solely on the fact that Oracle maintains +/-90% margins on support.  I don’t see them leaving this money on the table in a cloud gamble.   It’s critical you know how to maneuver in this situation.

Another question/concern I have is around compliance.  We have customers come to us all the time looking for help managing their Oracle licenses and contracts.   History has shown that it is so easy for Oracle customers to fall out of compliance. In fact, by Oracle’s own admission, over deployment is the number one compliance issue for Oracle software.   So what if an unsuspecting customer goes to Oracle looking for managed infrastructure services, and in the course of the transition Oracle uncovers that their client was unknowingly using options they were not licensed for?  Will this be used as an opportunity to engage their audit team and drive more revenue for Oracle?  Will the issue be put aside?  Is that a risk you are willing to take?

My recommendations around the Oracle cloud computing services are two-fold.  First, and most obvious, make sure the technology meets your needs and fits within your budget and strategy.   Once you pass that hurdle, make sure you are in compliance with your current license grant and know your contractual options going forward.   If you have the expertise on staff to audit your Oracle usage and contracts then do it.  Otherwise, bring in outside experts like Palisade. (Shameless plug.) Under no circumstances would I permit Oracle’s LMS (audit) team to help you “manage” your licenses and tell you if you are in compliance.  I’ve said it before and I’ll say it again, letting Oracle LMS review your environment and licensing is like letting the IRS review your books without first consulting an accountant.

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