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Oracle Best Practice Guide – Part 1

11747440176_15b9dc7497_zThe ITAM Review and Campaign for Clear Licensing hosted an Oracle Seminar on Friday 21st November 2014. The aim of the seminar was to share and discuss some of the main issues around Oracle licensing and audit behaviour.

Oracle Best Practice Guide Part 1 is the beginning of a three-part summary report which provides a review of the key takeaways, knowledge shared and main points raised both from expert speakers and end-user delegates. No names of individuals or companies are revealed in the report.

If you would like a PDF of the entire report, subscribe to our newsletter where you can find this and many other free guides such as: Microsoft, Oracle, Adobe, SAP and IBM Licensing.


Oracle licensing

On the day, both delegates and Oracle experts agreed that Oracle licensing is extremely complicated. However, it was argued that all the required information needed for Oracle licensing information is readily available on the Oracle website, organisations just have to dig deep to find the content. Whilst the content is available on the Oracle website (somewhere..!), it was agreed that the documentation can be too long and filled with legal jargon that your average SAM or License Manager may not be able to fully understand.
There are two things that struck us at this point:

  1. It is not advertised or clearly defined which is why users are coming up short on information. Structuring existing information that is easy to navigate must be one of the simplest things Oracle can fix. Oracle are aware that they have a reputation for being complicated and unhelpful, so why not publicise the fact that the license information and Terms and Conditions are available on the LMS website? Users struggle to find information regarding Oracle licenses or Oracle licensing changes, yet Oracle claim that all the information users need are on their website.
  1. The second issue is the fact that the Oracle contracts, and Oracle documentation in general is extremely complicated to read and understand and you need a legal professional to translate it. Most if not all organisations have a legal department but it is likely that they will not have any knowledge of software licensing, let alone Oracle licensing. Understanding Oracle contracts requires a professional who can translate the legal jargon into phrases that can be understood by the Oracle technical professional, and then the license manager. A SAM or Licensing Manager cannot expect to fully understand an Oracle contract without the help and support of professionals from other areas, and if they do try and understand the contract without help they may not interpret it correctly. This could then result in legal and financial risks for the organisation.

 

Updated license or contract terms & conditions (T&C’s) are always best for Oracle, not the customer. The T&C’s are often changed without any obvious communication to the end user, which can cause the customer to be under licensed without them knowing. It is of vital importance that Oracle users or license managers keep on top of the changes Oracle make to the terms and conditions. As mentioned previously, the license documentation and terms and conditions are on the Oracle website, users just have to search for them!

With regards to changing T&C’s, it is also worth mentioning that Oracle cannot change the T&C’s of a users contract during the contract period. Oracle can only make changes at the renewal stage or when entering a new agreement. However, this doesn’t stop Oracle from making changes to the T&C’s of their applications and this change affects all Oracle users not just an individual contract for an organisation. The risk lies in organisations renewing contracts to new terms and conditions that have not been communicated.

Oracle license metrics are a complicated beast, which is why we hosted the Oracle Seminar to share common issues and shine light on the key risks. Oracle licensing will not be made simpler as it isn’t in Oracle’s interest to make it easier to understand and license their products because it will impact Oracle’s revenue generation capabilities. Oracle users want better communication of Oracle licenses and the terms of those licenses. This is what is lacking at the moment, and this is partly why users find Oracle licensing so complex.

 

Oracle Contracts and documentation management

Along with Oracle licensing, Oracle contracts and general documentation management was a key talking point.

 

Be proactive, not reactive

Be proactive with everything related to Oracle, that way you are prepared for any audits that may come your way and have a rough understanding of where your risks are, both compliance wise and financially. Being proactive will result in audits being that little bit less painful, and potentially less time consuming and resource draining.

SAM processes will help an organisation be pro-active in the management of Oracle licenses. Having an overall SAM structure in place (not just for Oracle) will allow the organisation to be proactive in addressing any risks (financial or compliance), have better visibility on usage, and have the right processes and procedures in place for the procurement and use of software.

Being proactive in your management of Oracle software and documentation is a massive benefit. Here are the top five reasons why:

  1. You are better prepared for any audit or license review. Audit readiness!
  2. If you are audited, you have the processes in place to deal with such a situation
  3. Less resources are relied upon during the audit
  4. You know in advance what your risks are
  5. There should be less of a ‘panic’ when news of an audit is first delivered

 

Understand your Oracle environment before negotiating your contract

Have a strong understanding of why you have Oracle within your organisation, and what Oracle users actually use the software for before you renegotiate your Oracle contract. It is also important to understand your existing Oracle contract and have an idea of what needs to be changed or improved upon in the future.

Understanding your Oracle environment can help ensure you purchase the right type and quantity of licenses. Talk to the Oracle users and get a basic understanding of what their usage requirements are, and then make a judgement on the type of license they require. Carrying out this research could result in making big savings in future Oracle contracts, or even recycling existing licenses, as users no longer have the need or demand for Oracle software.

Having a strong understanding of previous Oracle contracts enables the organisation to establish what worked well in the past, and what didn’t work so well. This means that any future contracts can be negotiated with the knowledge of the lessons learnt from previous Oracle contracts.

 

Oracle contract negotiation

Organisations have the chance to negotiate any software contract agreement, and Oracle is no different. However, to be in the driving seat when negotiating an Oracle contract the organisation needs to have reliable, accurate data and know the needs of the business. Coming across as confident and knowing exactly what the organisation needs and wants, will put the organisation in a strong position to negotiate a better deal.

Another piece of advice that came out of the sessions was ‘don’t renew your Oracle contract at year end!’ You are more likely to get a rushed, expensive deal if you renew at the end of Oracle’s financial year. A piece of advice from an end user who has been through a number of Oracle negotiations is to try and renew your Oracle contract during the summer months, as this is when Oracle are more likely to provide you with a good deal (due to lack of last minute sales target pressure) and a number of people will be on holiday, which could result in a better deal for the organisation. If your deal or renewal is key to the Oracle sales person hitting their target – you are likely to feel more pressure.

As we’ve mentioned you need a licensing professional, legal professional and Oracle database expert to effectively manage Oracle licenses, well the same applies for negotiating your Oracle contract.

  • The legal professional will have the ability to read and understand the legal jargon that Oracle sends an organisation, and will be able to spot any ‘red herrings’ within the contract that a licensing professional may have missed.
  • A technical Oracle database specialist will be able to advise the business on the current technical demands, and possible future demands with Oracle software. It’s important when negotiating your Oracle contract to talk to the users who use Oracle software on a daily or regular basis as they are the users who will be able to advise the organisation on what they use Oracle for, and what DB features they require both now and in the future.
  • Finally, a licensing professional has the ability to negotiate a better financial deal and also has knowledge around Oracle licensing metrics. This means they will be able to understand the users requirements based on what information the Oracle users have said, which in turn will result in ordering the correct license metrics for users and the right amount of licenses.

 

Understanding your Oracle contract

Along with understanding your Oracle environment, you also need to understand and know the details within your Oracle contract like the palm of your hand. Pay attention to the Oracle License Agreement (OLA) and the terms and conditions of your contract and subsequent licenses so that you know exactly what your organisation’s rights are.

It is vitally important to get clarification on your Oracle contract or licenses, if you are not sure, ask! If you don’t want to go direct to Oracle then it is worth paying an Oracle expert to come into your organisation for a few days to read the contract and educate the organisation on what can and cannot be done with the Oracle software. You need to fully understand the content of your Oracle contract, otherwise you are a sitting duck for being taken advantage of by Oracle in future audits or license reviews.

Look out for those pesky amendments within your Oracle contract. There were reports of amendments being all over Oracle contracts, so it is important that you read and understand any amendments that are within your organisations. They could cause trouble in the future both compliance wise and financially, but also with regards to using your organisations name or logo in places you haven’t agreed to.

Keep your Oracle documentation for at least three years after expiry. The Oracle experts at the seminar stated that Oracle might not look back as far as three years, but that this was the standard rollback during an audit or license review. These documents should be kept in a safe place, in chronological order ready for any review or audit.

Finally, make sure you thoroughly check your Oracle contract for any mistakes on Oracle’s part. Oracle has been known to send customer’s contracts or documentation with mistakes, or different information than what was previously agreed. Check anything that Oracle send you for accuracy and ensure that the details are for your organisation.

 

Talk to the business. What is happening in the future?

There may be a demand for future Oracle licenses or different Oracle applications, so make sure you talk to the business to understand what future projects or changes are in the pipeline. Adding or purchasing licenses now as part of an agreement may result in large savings on your Oracle licenses. Having an understanding of what the future holds for the organisation will allow the organisation to be one step ahead, and to be pro-active with Oracle licenses and contract negotiations.

It is also important to understand what type of employee future Oracle users will be. Are they going to be permanent or contracted staff? Depending on the start and end dates of contractors (based on projects etc.), the organisation may be able to recycle licenses between contractors and projects, thus saving huge amounts of money on extra licenses. Talk to the business and get start and end dates for projects that require contractors to establish requirements.

 

Summary – Contracts and Documentation

Top tips for managing your Oracle contracts and documentation:

  • Be proactive with your Oracle contracts, not reactive
  • Be sure to look out for any amendments in your contract
  • Be cognizant of Oracle fiscal year priorities
  • Establish current and future Oracle requirements when negotiating contract. Also understand technical requirements
  • Finding a tool to manage Oracle contracts is a challenge
  • Keep Oracle documentation for at least 3 years post expiry
  • Know your license metrics. If not clear, make Oracle clear them up!
  • Oracle can make mistakes! Check your contracts!
  • Oracle customise most of their contracts, so it is important for an organisation to understand the specifics of their contract
  • Pay attention to the T&C’s so you fully understand what you can and cannot use
  • SAM processes help contract management
  • The legal department should be an integral part of your SAM team, ideally with license contract skills. Involve legal team in negotiations and not as the rubber stamp brigade at the end of your negotiations
  • Understand the organisations strategic approach, will changes impact Oracle licensing in the future?
  • Understand your users needs and requirements. Are they permanent staff or contractors?
  • Use good, reliable data when negotiating your Oracle contract
  • You may have to report usage or installation base to Oracle ‘periodically’, check contract for your own definition

Housekeeping

Managing Oracle licenses, contract and documentation should be on-going event, not just at the procurement or renewal stage.

 

Documentation or records

There were a number of recommendations to come out of the seminar with regards to maintaining Oracle documentation:

  • Keep Oracle documents in chronological order
  • Update and check Oracle records every quarter
  • Remember that the Oracle ordering document takes precedence as proof of purchase, but other Oracle documents are required to show entitlement. Manage and maintain these documents properly

Oracle documents are vitally important for demonstrating compliancy and entitlement. Be sure that your organisation keeps all of the documents required for at least 3 years after their expiry. Oracle may want to see an historical record of your organisations entitlement during an audit.

 

Resources

During the seminar it was widely agreed that in an ideal world there are three individuals required to manage Oracle documentation and help with general housekeeping. A licensing professional, a technical Oracle expert and a legal professional were agreed as the skills required to effectively upkeep Oracle documentation and licensing.

The majority of organisations will not have all three resources at their disposal, so it might be worth finding external help when it comes to contract renewal or if an audit is looming. It is also worth noting that a tool is needed to effectively manage Oracle contracts to ensure that they are stored and managed correctly, and that anniversary dates are known and abided by.

 

Get specialist advice!

If you or your organisation are not sure about anything related to Oracle licensing or your Oracle contract, then get specialist advice. The short-term project or consulting cost of an Oracle expert is very easily out weighed by the enormous potential risk of mismanaged Oracle licensing. With Oracle contracts, licensing and documentation being so complicated, it does require an Oracle specialist to effectively and properly manage the documentation and licenses, so make sure the organisation has that resource at hand, or outsource the work to an Oracle expert or managed service provider (MSP). Resources are available in the market on a short-term fixed project, Adhoc consulting or on-going managed service basis.

 


If you would like a PDF of the entire report, subscribe to our newsletter where you can find this and many other free guides such as: Microsoft, Oracle, Adobe, SAP and IBM Licensing.

The ITAM Review are holding an Oracle Seminar in New York on the 29th January. For more information click here

Disclaimer, Scope and Limitations

This report is meant for informative purposes only. It is a compilation of the questions, comments, experiences and knowledge of the attendees. This report does not constitute legal or professional advice and is intended as a general guide.

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About David Foxen

David Foxen is a Software Asset Management expert and enthusiast. He had a vast experience of successfully implementing SAM, SAM tools and also made huge cost savings. A member of the ISO Standards WG21, David is a massive ITAM geek, so uses any opportunity to talk about the subject to who-ever will listen. He believes that the industry needs to share its knowledge and success stories to help the SAM industry mature and become more effective. Always willing to help, his primary goal is to make a difference to organisations and the SAM industry so everyone will know how epic SAM is!

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