Consultant: How to deal with Oracle licensing

A consultant offered advice Tuesday regarding how Oracle customers can get the best deal and protect themselves while licensing software from the enterprise software giant.

Oracle's licensing practices have been maligned as overly confusing and unfair. But Eliot Arlo Colon, president of Miro Consulting, an independent firm in Fords, New Jersey, didn't get into specifics about particular policies, instead organizing a webinar around four categories: compliance, discounts, ongoing annual support costs and terms and conditions.

"When I look at e-mail subject lines, these are the things we get hit with," Colon said.

"Compliance is the foundation. Without it, nothing else matters," he said, adding that it is "not a gray area. Either you're compliant or you're not. ... If you consider areas [of use] gray, or your vendor considers areas gray, you should be concerned."

Companies should self-audit their licenses twice a year, and it should be a "thorough review," not a couple of mass e-mails, he said: "It's definitely more of a bear than most people would anticipate."

A third party should review the audit, and the company must possess a "stated and defendable" position on gray areas, he added. It is also wise to get assumptions confirmed in writing: "If it's not stated in your agreement that you have that right, chances are you do not have that right," he said.

Oracle vigorously defends its intellectual property, according to Colon. "You always have to assume an audit is only 30 days away," he said. "We've worked with companies that say 'We're a strategic partner, we're in the Oracle top 50,' and then they're audited."

Colon offered a range of advice concerning license cost. While Oracle and other vendors tend to offer better deals at certain times of the year, customers shouldn't be easily tempted by a low price, he said: "Waiting until a vendor's end-of-year, end-of-quarter may not be in your best interest if it's changing your business process. ... Everyone wants to get a good deal, but discount isn't the whole game. It's total cost of ownership."

To that end, organizations should take a close look at their existing annual support costs, he said: "You may find that your support is a lot better than you thought, or you might find products that you're supporting and not using. ... or that Oracle has acquired half the software you've got and now it can be supported under one envelope."

In fact, enterprises should review their annual support spending at least twice per year, Colon argued.

IT shops should also seek to rework any complex and ambiguous language in license contracts; determine how globalization and consolidation has altered their company's licensing needs; mull the ramifications of licensing among mobile workers; and ensure they have collected all proofs of purchases for storage in an asset management repository, Colon said. His company advises enterprise-software customers of companies including Oracle and Microsoft.

When renewal time comes, companies should weigh whether it makes more sense to renew the existing pact or formulate a new one, according to Colon. "Businesses are very dynamic. If you have an agreement signed four years ago, chances are it doesn't work for you today," he said.

The IDG News Service is a Network World affiliate.