Introduction
It’s 2025 and despite massive advances in technology, the AI boom, and the Broadcom acquisition of VMware, some things just don’t change. Oracle auditing their own paying customers and trying to find noncompliance because of VMware usage is the same today as it was in 2011 when Palisade Compliance was born. Why does Oracle do this? Simple. Because it works. Most companies don’t take control of the audit process, don’t push back on Oracle, and ultimately don’t win this battle. They are still allowing Oracle to “make stuff up” and introduce non-binding and non-contractual things into the discussion. By the way, Palisade Compliance clients are well protected from this Oracle strategy and we’ve been winning this battle for years!
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 excessive noncompliance “findings” and put through the wringer of trying to negotiate with Oracle Sales.
The really frustrating 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.
In the past year, our experts say they have seen two significant changes in Oracle VMware licensing:
- The degree to which Oracle wants to have their cake and eat it too on ULA certifications. “If you certify your VMware one way you can’t change it after, you need to give us the data and get it locked in now” is something we’ve seen pushed on every ULA we’ve touched in 2024, with heavy pressure from Oracle LMS during validation that ultimately fades away. If customers cave under the pressure, they’re setting themselves up for failure in a few different potential ways that will bite them later.
- When a customer submits all the requested information to Oracle’s VMWare approval department they never hear back whether the architecture has been accepted or rejected even after making multiple requests on the status. We assume it’s likely that Oracle Sales is sitting on the results because Oracle’s conclusion will not affect the possibility of the customer purchasing additional licenses, enter into an enterprise license, etc. In these cases LMS is not “officially” involved – it is Sales leading the charge.
Not all license experts created equal
The good news, if there is any, is that there is much more information out there about this subject. Do a Google search and you’ll see the voluminous results. Word of caution: remember the source of that information. Not all Oracle license “experts” are created equal. Obviously I’m biased, and think that Palisade Compliance provides the best insights!
Willing to fight back against Oracle
With more information comes confidence, and a willingness to push back against non-contractual 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.
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.
This plot has thickened with Broadcom’s purchase of VMware. Since that acquisition, Broadcom has completely changed/eliminated certain VMware offerings, often raising prices. Now Broadcom is looking to offload some VMware business elements. We will watch this movement closely and keep an eye on how this activity impacts your Oracle licensing.
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
Here are three things customers are doing now to win this fight with Oracle.
- 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 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.
- 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.
- 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.
Oracle and VMware – a Successful Licensing Strategy in 4 Steps
Find out about the 4-step strategy we recommend for running Oracle and VMware while controlling costs and minimizing risk.
Also, watch our video where Craig Guarente discusses the recent (March 2025) civil lawsuit, VMware (Broadcom) vs Siemens.
Our experts can help you now
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.
