Case study
A large multinational conglomerate that manufactures a variety of products and has been in operation for over a century unexpectedly faced an Oracle audit. They worked with Palisade Compliance to not only address the audit, but proactively ensure they were compliant across their entire Oracle footprint.
Preserving the benefits of being an early Oracle adopter
The manufacturer had been a long-time partner of Oracle – the corporation signed its first contract to use Oracle tools in the late 1980s. Since that time, the company had significantly expanded its use of Oracle products, such as using Oracle EBS in the 1990s and implementing Oracle software across their global businesses in the 2000s. Oracle products supported their manufacturing units, as well as the financial analytics for the entire organization.
As with many customers of Oracle, the organization’s early contracts contained highly favorable terms. Over the years, the manufacturer maintained its maintenance payments to preserve those terms, expanding the partnership with new licensees as needed. Unlike many Oracle customers, the business was very organized about managing contracts and using Oracle strictly according to the terms of their licenses. As a result of its sound management of the relationship, the company had an Oracle footprint that was larger and wider than most other businesses and was pleased with the high value Oracle products provided.
Handling an audit from a position of strength
So when Oracle approached the manufacturer in 2019 with the threat of an audit, the corporation had usage data to analyze the compliance of its expansive portfolio of Oracle products.
However, one of the chronic challenges of using Oracle products for extended periods is that Oracle makes many of its tools obsolete after a certain period. That meant that products the company had been using would be discontinued and Oracle would replace them with other tools. Though the corporation worked diligently to respect Oracle’s licensing agreements and always remain in compliance by paying for their entire Oracle software usage, the company’s leaders were worried they had fallen out of compliance unintentionally given the constant fluctuation in Oracle products.
Also, in 2019, the Oracle representatives conducting the audit did not have an appreciation or understanding of the manufacturer’s longer term contracts and history with Oracle. Those Oracle representatives focused more on applying current terms and conditions rather than abiding by what was set forth in existing contracts. As a result, the corporation’s leaders were worried they would end up with far less favorable contracts at the conclusion of the audit. It also became readily apparent to the company’s team that they were up against a sophisticated auditing process from Oracle that operated like a well-oiled machine. It was clear that the manufacturer needed help to respond to Oracle effectively.
![](https://palisadecompliance.com/wp-content/uploads/2024/07/manufacturer-audit-onpage.jpg)
The company’s leaders were worried they had fallen out of compliance unintentionally given the constant fluctuation in Oracle products.
Company’s compliance position stronger than they thought
It was at that point that the company reached out to Palisade Compliance to assist with the completion of the audit. Our extensive experience working with other companies facing an Oracle audit, as well as our approach to operating with Oracle more generally, appealed to organizational leaders.
Working with us immediately led to insights that quelled the fears of the manufacturer’s leaders. Our scripts analyzed Oracle usage and compliance with its existing contracted licenses. The company quickly recognized that they were in a far stronger position than they had anticipated.
During the process, a small license liability was discovered which was able to be reconciled quickly and at a minimal cost. After working with us, the business was able to determine that they didn’t need to adjust their existing contracts or increase their financial outlay to remain in compliance.
Our analysis helps save millions; company adopts proactive approach
Part of our discovery process was to examine the lineage and history of the company’s long-standing contracts. Company executives recognized the value of delving into this history but could never have completed this analysis on their own. Without us, they would not have understood Oracle’s posture or the validity (or lack thereof) of its claims.
The result of our work was a concise document that neatly summarized the organization’s entire position regarding the licenses, along with a recognition of the minimal aspects in which the corporation was out of compliance. The corporation sent this to Oracle as part of the auditing negotiations. Oracle’s response to our finding came quickly – and Oracle was just as quick to agree to the modest terms. The manufacturer therefore avoided paying astronomically high fees to come into compliance.
Our analysis, which acknowledged a few gaps in internal processes and how existing contracts had been interpreted, allowed the company to proactively counteract any claims of larger compliance issues from Oracle. The manufacturer swiftly made the internal changes needed to come into compliance and shared
these adaptations with Oracle.
Java compliance solution provides further insights
After completing a reactive audit, the company also wanted to be proactive in their compliance with Oracle going forward. The manufacturer, like many other businesses with Oracle footprints, also had Java implementations to contend with. Java has long been embedded in other software as an application
development tool. When Oracle acquired Java from Sun Microsystems, it didn’t initially require users to make any payments for Java licenses. However, that changed in 2023, when Oracle required paid licensing for use of Java technology. The terms were quite aggressive. Oracle required that anyone using any instance of Java anywhere in a business had to be a licensed user. With monthly licensing fees calculated on a per employee basis, the cost for using Java in existing applications suddenly skyrocketed.
The business received an aggressive letter from Oracle claiming that it had unauthorized Java usage. Again, the company was faced with the possibility of having to pay millions just to continue to use its portfolio of Oracle products. The corporation needed a solution that helped them to discover whether they were fully in compliance with their Oracle licenses, as well as how to respond to Oracle’s ongoing threats of audits.
Part of this involved assessing warehouse management practices, as well as applications developed by internal developers and engineers that used Java. The few Java applications were moved off of Oracle Java technology or shut down. From the insights they gained during the first official Oracle audit, the company was able to create a proactive plan around understanding their Java compliance position before Oracle might audit them.
We continue to provide Oracle license advisory services
Working with us also enabled the manufacturer to understand how Oracle’s licensing rules frequently change over time – to Oracle’s benefit. Executives recognized that they needed to have someone in place to constantly monitor these changes and ensure ongoing compliance. They hired us on a retainer to provide an advisory service (MyPalisade) that runs detection reports and offers proactive auditing defense along with constant monitoring. This is especially helpful as more Oracle products become cloud-based solutions. Now, the company is highly confident it is in compliance with all of their Oracle licenses and knows how to negotiate the best contracts for adopting Oracle cloud and other new Oracle technologies.
The company’s leadership believes that without us they would not have had the resources to push back against Oracle’s audit and likely would have paid far more to come into compliance than their minimal settlement. That meant millions of dollars in savings. Its ongoing partnership with us as their trusted Oracle license advisor ensures they remain in compliance and are able to negotiate contracts with Oracle from an informed position of power.
Facing an audit from Oracle and concerned about the outcome?