Oracle VMware Licensing 2023 – How to Win

Death and taxes are not the only constants in this world. Oracle auditing customers and trying to find noncompliance because they are using VMware technologies can be added to that dubious list. If there is any silver lining to Oracle’s practice, it’s that Oracle’s customers are fighting back over Oracle VMware licensing, and many are winning.

Oracle has a long history of running up the audit bill for their customers who run on VMware. It’s nothing new, and you all know the story. Companies who believe they are in compliance with their contracts are hit with six-, seven-, eight-, even nine-figure noncompliance “findings” and put through the ringer of trying to negotiate with Oracle Sales. The really sad part here is that Oracle’s customers are always trying to do the right thing and stay in compliance. Oracle, however, for whatever reason you choose to believe, continues to leave their contracts completely devoid of virtualization references and compliance rules. This contractual vagary is where problems arise, and opportunities, abound for the savvy Oracle customer.

Better informed about VMware and Oracle

I’ve been working with Oracle customers since 1995. For 16 years at Oracle and now for 12 years at Palisade Compliance. The good news is that today’s Oracle customer has so much more information at their disposal. Palisade Compliance has written extensively on the topic. Today, we rarely come across the company that says “we had no idea this was an issue”.

The bad news, however, is that there is also a lot more inaccurate or inappropriate information out there. While companies may have access to more information, this information is often flat out WRONG or just not applicable to their situation. Anyone can put up a website, say they are an “expert,” and then write whatever. There is no accountability. Some big Oracle partners have created a cottage industry telling companies they are “independent”, but at the same time make money from selling more Oracle. VMware is not blameless either. They put out information on Oracle licensing that sends companies down a dangerous path with Oracle. It may not be that VMware is wrong, it’s more like the guidance is not appropriate in every scenario.

Willing to fight back against Oracle

With more information comes confidence, and a willingness to push back against noncontractual and often incorrect assertions by Oracle. The days of Oracle LMS waltzing into a customer, demanding they drop everything and focus on Oracle’s agenda, should be over. Customers know Oracle has a contractual right to audit. However, these same companies also know they have a contractual right to be treated fairly, with reasonableness permeating that process.

While it’s great that companies are willing to stand up to Oracle, if you do it with bad information, then you are doomed to fail. For example, I’ve heard from so many companies that they confidently went into an Oracle audit armed with VMware’s paper on licensing Oracle only to be found out of compliance by Oracle. That happens all the time. You see, despite public announcements, VMware and Oracle are huge competitors. I’m amazed that anyone would take Oracle licensing advice from VMware. Likewise, I wouldn’t take VMware licensing guidance from Oracle. It makes no sense to me, but it’s out there and people believe it.

If we’re being really candid here, I’m amazed that anyone would go to Oracle and ask for guidance on licensing. What do you think Oracle is going to say? You know it – “You have to license everything!” Never mind that your contracts DO NOT say that.

While it’s great that companies are willing to stand up to Oracle, if you do it with bad information, then you are doomed to fail.

It’s not good enough to have the courage to stand up to Oracle, you have to be right! Actually, let me rephrase that … you have to make Oracle prove they are right! How do you do that?

Win the Oracle VMware licensing argument

Our guide discusses in detail the steps you can take to safely license Oracle while you run on VMware.

Here are three things customers are doing now to win this fight with Oracle.

  1. Embrace ambiguity. Oracle contracts are ambiguous to a fault. That is a feature of Oracle and not a bug. Everyone wants their contracts to be crystal clear and airtight. Unfortunately, we don’t see that with Oracle. Having ambiguous contractual language allows you to make a reasonable interpretation of your license position. That’s all you can do in an ambiguous state – be reasonable. Vagary gives you options. The reality is there is no right way or wrong way to license Oracle when running on VMware. They can all be right, and they can all be wrong; Schrödinger’s license. The key is preparing your position and forcing the other side to defend theirs. That’s what Oracle does to you and that’s what you can do to Oracle.

  1. Go on the offensive. Don’t wait for Oracle to attack your licensing position. If you are questioned by Oracle, either in an official audit or quasi audit, probe Oracle’s position and make them show you where in the contract it says you have to license in a certain manner. Don’t let them pull a sleight of hand and show you non-contractual fake policies. Stick to the contract. You know how easy it is to blow a hole in Oracle LMS’s license arguments? Answer: too easy. Once it’s clear that Oracle’s position is illusory, then you insert your position. It’s not about proving you are right, it’s about showing they can’t prove you are wrong. I know, it’s a crazy way to look at this, but that’s what Oracle forces you to do. Remember, before you hand Oracle any information on your product usage, require Oracle to state their license positioning on VMware. Refute that, have them concede to your position, then you can proceed with the audit. Don’t ever hand information to Oracle if you’re not in agreement on the basic licensing rules.

  1. Learn from others and build your palisade. The most successful companies are those with a well informed and well thought-out plan, who follow through when pressured. I can take any position on Oracle VMware licensing, and show how I am right, and how I am wrong. The key is execution. I can tell you how to birdie a golf hole, but when the pressure is on, can you really do it? Or should you have someone with you who has played that hole a thousand times and consistently birdies it? There is simply too much ambiguity and risk in this particular space to justify going into this alone and not getting help before it’s too late.

Getting expert help

Whether you are thinking about deploying Oracle on VMware, or you have been doing it for years; whether you are being audited by Oracle or you are just worried, you will always benefit from the experience of others who have successfully been down this path before. Obviously, I believe Palisade Compliance is the best choice for you, much like it was the best choice for Mars when we helped defend them in their audit with Oracle. Ultimately, that is your decision.

If you do get help from someone not named Palisade Compliance, please make sure you get solid information that does not put you at undue risk. Getting help, like being informed and being willing to fight, can be a great thing or it can really put you in a bind if you seek guidance from the wrong group.

Build your palisade with Palisade Compliance!

Craig Guarente
Craig Guarente
Craig is the President and Founder 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.