vmware oracle licensing auditOracle customers fight back over audits and VMware. Are they winning?

[Information current as at May 2021.]
Death and taxes are not the only constants in this world. Oracle auditing customers and trying to find noncompliance because their customers are using VMware technologies can be added to that dubious list. If there is any silver lining to this Oracle practice, it’s that Oracle’s customers are fighting back, and many are winning.

Oracle has a long history of running up the audit bill for their customers who run on VMware. It’s really 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 overwhelmingly 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 grey area is where problems arise, and opportunities abound for the savvy Oracle customer.

“Oracle … continues to leave their contracts completely devoid of virtualization references and compliance rules.”

Better informed about VMware and Oracle

I’ve been working with Oracle customers since 1995. For 16 years at Oracle and now for nine years at Palisade Compliance. The good news is that today’s Oracle customer has so much more information available to them than in previous years. It helps that companies like ours write extensively on the topic. We rarely come across the company that says “we had no idea this was an issue”. See for yourself. Conduct a Google search on “licensing Oracle on VMware” and see what comes up. There are 30-plus companies offering their opinions.

The bad news here, however, is that there is also a lot more misleading information out there. While companies may have access to more information, this information is often flat out WRONG. 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 making 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, are over. Customers know Oracle has a contractual right to audit. These same customers 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. Just like with being better informed, there is a risk if you fight the wrong fight. 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.”

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 VMware Oracle licensing argument

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 lets you give a reasonable interpretation to your license position. That’s all you can do in an ambiguous state – be reasonable. Ambiguity 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; Shrödinger’s License. The key is preparing your position and forcing the other side to defend theirs.

2. 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, let Oracle produce their position first, before you give them any insight to what you are doing. Destroy that position, then fill in the void.

3. Learn from others and build your palisade. The most successful companies are those with a well informed and well thought-out plan, and then follow it through when pressured. I can take any position on licensing Oracle on VMware, 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 with VMware and Oracle

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, however, that is your decision.

If you do get help, 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!