Mars’ recent lawsuit against Oracle is a tangible example on how Oracle audits its customers. In summary, Mars complained that Oracle’s demands were over-reaching, without contractual merit, and damaging to Mars’s business. Those of us who specialize in Oracle-related software asset management and audit remediation found the Mars situation to be unexceptional with respect to Oracle’s audit practices. However, what is unique about the situation is that Mars chose to enter the public arena through litigation, and Oracle allowed the matter to escalate that far. Another plot-thickener is recent and compelling commentary by House of Brick and others on how many of Oracle’s policies (and especially its VMware “policy”) fall outside contractual terms and are therefore unenforceable.
Although you may be inspired to follow Mars’ example, there are two important things to consider before going head-to-head with Oracle in court:
- Oracle owns its software and alone determines how it may be used, priced, and audited.
- Oracle is immeasurably prepared to defend its view of intellectual property rights.
Given these two points alone, our recommendation is to understand and comply with Oracle’s policies before being audited, even when they seem impractical and baseless. Perhaps the folks at Mars would agree, since they likely ended up paying at least as much in legal and settlement fees as they would have had they foregone litigation and negotiated a license agreement with Oracle from the outset.
While it’s tempting to challenge Oracle’s licensing policies, in our experience it isn’t particularly fruitful. Even under the most customer-centric (i.e., anti-Oracle) interpretation of contractual rights, one must contend with Oracle’s pricing practices, which are inarguably under its control. Oracle need only withhold discounts on its software to make license and support costs punitively high. Anyone with experience negotiating a license order or attempting to reduce existing support costs understands this. Bluntly stated – Oracle’s dominance, profitability, and leverage are largely due to its pricing latitude in combination with its inflexible support policies and unnavigable licensing rules, and these forces can’t be undermined by taking Oracle to court.