re-negotiating with oracleIt’s fitting that the most powerful piece of advice to keep in mind when preparing to re-negotiate your new license or cloud agreement with Oracle is itself most commonly associated with ancient Greece’s Socrates. It is the aphorism “know thyself”. I would also add an additional element: “control thyself”.

This is not to suggest that one needs the services of a PhD in philosophy to wrangle your Oracle relationship; far from it. Rather, there are concrete considerations founded on answering some hard-nosed questions about how your business operates and understanding the nature of an Oracle contract.

Non-compliance scenarios are almost always avoidable

Let’s begin by setting the record straight. Despite the nerve-wracking nature of the stories that circulate about companies being audited and found to be out of compliance or having received breach of contract notices from Oracle, the reality is that with effective guidance, these scenarios are almost always avoidable. Oracle only audits when they believe there is a problem. If you manage your Oracle usage properly, then Oracle will not audit you.

The solution lies not in pointing fingers, but in understanding the relationship between your organization and Oracle. The Greeks often depicted Cupid with a blindfold (perhaps inspiring Shakespeare’s claim that “love is blind”). That is a fair metaphor for how many companies begin their Oracle relationship. Of course they want to be with Oracle. Oracle has fantastic, powerful products used by millions to run their businesses. (The same may not be said, though, about Oracle’s cloud.) In their eagerness to start, however, they fail to recognize the nature of Oracle and its approach to contracting in the cloud or on-premise. It’s no wonder that years later they find themselves in a power struggle with a partner they barely understand.

Oracle’s approach to relationships is, frankly, a bit promiscuous. Its license terms are quite loose. This is not an accident. Oracle wants you using its stuff far and wide. They want you to depend on them. And you will, because their products are very good. You want to use this stuff.

Oracle counts on you being out of control

Most software products that you buy require you to make conscious choices that make it almost impossible to unknowingly fall out of compliance. Oracle is the exact opposite. Oracle software is easy to download, install, and use without any checks on your licensing. Oracle is counting on you being out of control, and they make that very easy to do. This is a feature of Oracle contracting, not a bug.

“Oracle is counting on you being out of control, and they make that very easy to do.”

This approach puts the burden on you, the user, to be the disciplined one in the relationship. It can be difficult to show restraint in those early days, and that sets up a pattern of behavior. That’s when companies find themselves, a few years down the road, walking on eggshells through an audit that reveals far more Oracle deployed than expected, which translates into significant financial liability.

Understand how you use Oracle

This is why the most important step to take in your next Oracle negotiation needs to start with understanding how you use Oracle and the ways in which your use might change over time, intentionally or of more concern, unintentionally. Gather up all your licenses, conduct a far-reaching review of your current usage, and get a clear understanding of how Oracle maps to your organization. The sooner you do this, the better. Then you can start looking to the future.

Decisions can increase your liability

Looking down the road, recognize there are many ways you can unwittingly add to your Oracle license liability. Even if you are in control, seemingly unimportant decisions can have dramatic implications to increase your Oracle license liability.

Here are some things to look for:

  • Connecting a license server to a virtualized network can dramatically increase the number of pathways into your Oracle systems.
  • Connections between your Oracle deployment and a Storage Area Network used by many clients, similarly can increase your liability.
  • Employees unwittingly using software from a company that has since been acquired by Oracle and now requires an Oracle license.
  • Using Oracle software in a third party cloud brings up a host of issues.

This may seem daunting, but it is absolutely necessary. The good news is that this deep introspection will not only help you negotiate the right deal with Oracle, but it simultaneously ensures that you get your future relationship off to a disciplined start that you can maintain for the future. As Plato said, “The first and the best victory is to conquer self.”

The sooner you start this process, the better. And as in many things, getting help from someone experienced can put you in a stronger position to negotiate with Oracle.

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Read further articles on Oracle contract negotiating tactics, including at the end of Oracle’s financial year on 31 May.