If you are in the process of renewing contracts with Oracle, or have a renewal event on the horizon. Here are seven things to consider before signing on the dotted line.
In a nutshell: Oracle is difficult to deal with and whilst every organization must be responsible and accountable for the agreements they purchase, Oracle places a disproportionate amount of risk and management overhead towards their customers.
Bottom Line: Senior management should be aware that any Oracle purchase includes a significant management overhead and should budget accordingly.
Oracle Contract Renewal Checklist
- How will you measure compliance? How will you measure the license metrics agreed with Oracle throughout the life of the contract? Do you have the tools and processes in place to measure compliance and make changes? Will you be dependent on Oracle for understanding your compliance position (and therefore placing your organization at increased audit and financial risk) or is it something you can achieve internally and/or with independent partners?
- Change Control and Governance. Most organizations have some degree of Change Control in place for controlling risk in the datacentre, but unfortunately change control does not typically include the risk of software licensing errors. Ensure your change control and governance procedures include licensing and are robust enough to capture rogue Oracle installs or changes for high-risk software titles such as Oracle databases.
- Education – Oracle are notorious for slipping in chargeable items into upgrades. Whilst upgrades are typically only chargeable when in use, Oracle administrators may inadvertently use items because they have access to them. Have you got an education program in place to ensure administrators are aware of the cost implications of their actions?
- Study Contracts – ensure license metrics are understood and are built into the contract. Proactively seek out licensing changes that may alter the contract now or in the future dependent on your current and planned usage. You are unlikely to receive clear updates from Oracle on license changes. Build time for scrutinizing contracts into the management overhead of owning contracts. Oracle can’t change the terms of your agreement without your knowledge – but things may change at renewal time and those helping you renew, such as your account manager, may not be aware of the license changes.
- Oracle Audits – Only sign an agreement with Oracle if they agree to adhere to the Software Audit Code of Conduct from the Campaign for Clear Licensing. Assume the worst-case scenario – you will be audited once a year from Oracle LMS, and shortfalls will be passed to sales to resolve. Budget for audit overhead accordingly.
- Protect future efficiencies – Oracle like to offer big discounts on bundles and then not allow organization to break up bundles at a future date. So for example organizations typically find it difficult to drop an item from an Oracle contract at renewal because you are no longer using it. For efficiency savings at renewal time – separate out every product onto a separate order or get assurances in writing that bundle discounts will continue if items are removed at renewal time.
- Management overhead – For many organizations Oracle is a high-ticket item, with high strategic value to the business. It also takes significant management resources to simply manage the Oracle licensing. You wouldn’t buy a £1M worth of stock to store in a warehouse without assigning an overhead for managing and securing the inventory, nor should you overlook the management overhead of managing Oracle.
“Areas for Oracle risk need knowledge and awareness built around them to overcome any potential unwanted circumstances. The areas tackled here – like metrics clarity and measurability, implementing change control and audit clauses – are amongst the most important aspects one has to consider when signing/renewing an Oracle contract.” ~ Madalina Chirculescu, Consultant, ITAMS
Strategic Vendor Choices
If this management overhead seems too onerous for a software purchase then consider four options:
- Do nothing – accept the risk and budget for the worst.
- Vote with your feet – find alternative technology to Oracle with less management overhead, simpler licensing terms and customer-focussed ethic.
- Manage it proactively – if you can’t manage the metrics in an agreement on an on-going basis you shouldn’t be deploying it.
- Change the agreement – pick a metric or a framework you can manage. Pick a game you can win.
About Martin Thompson
Martin is also the founder of ITAM Forum, a not-for-profit trade body for the ITAM industry created to raise the profile of the profession and bring an organisational certification to market. On a voluntary basis Martin is a contributor to ISO WG21 which develops the ITAM International Standard ISO/IEC 19770.
He is also the author of the book "Practical ITAM - The essential guide for IT Asset Managers", a book that describes how to get started and make a difference in the field of IT Asset Management. In addition, Martin developed the PITAM training course and certification.
Prior to founding the ITAM Review in 2008 Martin worked for Centennial Software (Ivanti), Silicon Graphics, CA Technologies and Computer 2000 (Tech Data).
When not working, Martin likes to Ski, Hike, Motorbike and spend time with his young family.
Connect with Martin on LinkedIn.