Oracle LMS Audit: The Change to the Final Report

The short answer: Oracle LMS audits have a reputation for being confusing, confrontational and costly. According to Palisade, Oracle has begun skipping the preliminary audit report and going straight to a final report. That starts the contractual 30-day clock to resolve findings and puts more pressure on the customer.

What changed in the audit report step

Historically, Oracle, like many software vendors, issued a preliminary audit report before the final report. The preliminary report let the audit target review and challenge Oracle’s analysis and assumptions. That step mattered because Oracle licensing is rarely black and white, and it helped both sides reach a shared view of the customer’s environment.

Why going straight to a final report adds pressure

When the final report is issued, the 30-day clock for resolving findings starts. In those 30 days you are expected to:

• review the final report and research the findings
• present your findings to Oracle, which may take several meetings
• correct the findings in the report
• reconfigure your environment where needed
• negotiate pricing, terms and conditions
• complete the purchase of any products or licenses required

With each passing day, Oracle sends reminders that you are out of compliance, and escalation emails. You can end up negotiating on a false narrative. Once the 30 days have passed, Oracle is firmly in control. The words “legal” and “escalation” come up, and LMS may raise the “nuclear option” of contract breach and license termination.

Will this become standard?

When this was written, it was too soon to tell whether the rush to a final report was standard LMS practice or an outlier for a few unlucky customers. More data points were needed. If the practice brings Oracle more money, Oracle will use it again.

If you are facing an LMS audit, read our Oracle license audit defense page. For ULAs, see the Oracle ULA exit process, and for Java, our Java license review. About the author: Sheshagiri Anegondi, our Managing Partner.