Arizona Legislation to Provide Cloud Freedom – Bad News for Oracle?

Legacy software vendors are in a tough spot. They want to protect their highly profitable ongoing on-premise license and support fees. At the same time, they want to get into the amazingly profitable and growing cloud space. Oracle is a great example of a large software company trying to make that transition. Their track record making the move has seen its ups and downs. Companies and government agencies are truly struggling with restrictive contracts, onerous audits, and aggressive sales tactics. All people want to do is decide on the best cloud platform that works for their business or agency. They do not want to be bullied or pushed into using something that isn’t right for them.

Oracle has been quite creative in how they make it difficult for their customers to enjoy “cloud freedom” and move to the cloud of their choice:

First, Oracle can put outright prohibitions in their license agreements: “You cannot use this in a non-Oracle public cloud.”

Second, they make licensing the software in another cloud more expensive: “You’ll need twice as many licenses if you use Oracle database on AWS vs OCI.”

Third, they provide less technical support running in a non-Oracle cloud: “If you run on Azure we won’t support certain issues and we won’t support RAC.”

In addition to these tactics, you also have the sales pressure and aggressive LMS audit threats. While you want to move to the cloud of your choice, Oracle wants you to move to OCI. Well, these tactics might soon be illegal in the great state of Arizona.

Is cloud freedom just around the corner in Arizona?

A piece of legislation that was supposed to go to committee in Arizona was designed to prohibit software vendors like Oracle from engaging in tactics that limit a state agency from deploying software on the hardware of their choice. HB 2620 reads:

A contract entered into by a public agency for the licensing of software applications designed to run on generally available desktop or server hardware may not limit the public agency’s ability to install or run the software on the hardware of the public agency’s choosing.

Unfortunately, this bill has been set aside for now. A source tells me it has been shelved because of opposition from Microsoft. I cannot, however, confirm the reason for the bill stalling even before a public hearing.

This legislation would have been a big step in the right direction. It would have protected Arizona government agencies, and the Arizona taxpayer. We encourage the adoption and expansion of this type of legislation to include private sector companies doing business with government agencies at both the state and federal levels. Cloud freedom is a good thing and can only bring lower costs and innovation to technology consumers.

It will be very interesting to see how legacy technology vendors continue to push back against this type of legislation. We’ve reached out to Oracle for comment but as of this writing we have not received a response. Stay tuned!

We can help you move to the cloud of your choosing.

Craig Guarente
Craig Guarente
Craig is the CEO of Palisade Compliance, which he founded in 2011. Before 2011, Craig worked at Oracle for 16 years where he was the Global Vice President of Contracts, Business Practices, and Migrations. He was also the Global Process Owner for Oracle’s audit teams (LMS), a member of Oracle’s CIO advisory board, and on the Oracle User Group’s contract and licensing advisory board. Craig is now the leading expert on Oracle licensing, is quoted in dozens of publications, and assists with many high-profile Oracle disputes.
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