In today’s market where revenue on new licenses is hard to come by, software vendors seem to lean more on license compliance audits to squeeze money out of users misusing or abusing their products. Industry analysts estimate that a software licensee can expect an audit from their vendors every three to five years. These software audits are costly, not just regarding penalty fees, but with demands for resources to complete the exercises. According to a study by ITAM Review, license audits take up to seven months, eventually consuming about 200 hours of the auditee’s time. That is the time that the auditee could have utilized to run their business. Oracle Licensing in particular, poses a number of challenges for organizations in terms of compliance and navigating audits.
Let’s take a deeper look.
Reasons that make Oracle Licensing complex
Due to the general complexity of Oracle licensing, it is very challenging to maintain compliance. The following are some of the reasons that make Oracle licensing complex:
1.Misunderstanding of Oracle licensing terminologies:
Oracle has a tricky licensing scheme where it uses many metrics to come up with license list prices. Oracle commonly uses two metrics: by the processor (CPU) and by Named User Plus (NUP). But apart from these simple metrics, other multiple factors are considered, these include clusters, virtualization, and the number of cores. All these metrics and accompanying factors make it hard to understand Oracle’s licensing procedures.
2.Steep support fees:
Oracle charges support fees at a huge 22% of their license costs. This is their most profitable business; Oracle earns more from maintenance and support than from licenses of their products. Oracle earns support fees through the provision of product upgrades, technical support, and maintenance releases or patches. So profitable is the support and maintenance fee that Oracle notes that their customers have no choice but to pay.
3.Confusing fine print:
Oracle is not always forthright with their communication about revised policies, creating an awareness crisis among its customers. This means that customers are perpetually at risk of breaching Oracle’s terms and conditions. It is recommended that organizations seek counsel from third parties like Rythium to remain conversant with any change of policies from Oracle and to ensure compliance.
5.Licensing through the packs:
With Oracle database, each option, feature, or pack is licensed separately; and these items can sometimes be unknowingly activated without even a notification alert. Since activation and use of a feature without licensing is a breach of terms and conditions, the end-user can easily end up paying off an innocent act. To avoid this challenge, activation options should be controlled.
6.Unlimited License Agreements (ULA):
Contrary to what the term might suggest, Unlimited License Agreements may sometimes not technically mean “unlimited”. When an organization purchases ULA, the agreement might not necessarily cover all of the Oracle products in its possession or all of the business entities of the organization. For example, an end-user may decide to purchase a ULA of a Database Enterprise Edition in an unrestricted manner, but may end up using certain options or packs not covered in the ULA; this means the end-user is in breach of licensing policies and may end up purchasing licenses for those items. In short, the unlimited user agreement is very complicated, and it requires careful consideration and attention to detail. Unbiased third-party experts like Rythium can help monitor your usage to ascertain you are not using an unlicensed item and avoid penalties.
7.Lack of virtual licensing preferences:
While vendors such as VMware provide a flexible and friendly licensing option that provides room for a lifeline, Oracle’s licensing policies are rigid with one result in case of a violation: penalty.
Best Practices to minimize Oracle license compliance risks
As long as people continue using software for profit, audits are practices that are here to stay since software vendors have realized their value in terms of revenue stream. In addition, software vendors use software audit exercises as a marketing technique for their other products or services. But because these audits end up costing the auditee resources, it is upon the end-user to take measures in preparation for them. The measures are taken only serves one purpose: minimize exposure to liabilities. To get an Oracle end-user started, here are some measures that should be considered:
1. Implement a Software Asset Management (SAM) program: Software Asset Management is a must-have for every organization employing enterprise software assets. With SAM tools, organizations can carry out inventories of software in their possession, together with their license compliances, and usage assessments. One of a SAM practice that may be considered is to require all IT assets users in an organization to submit or seek approval for their intended changes to the assets’ configurations or usage. However, SAM still requires a licensed specialist like Rythium to manage it.
2. Inventory software license assets: The foundation of any asset management is a comprehensive audit of all license assets in possession of an organization. Organizations should document all documents – including purchase and quotation – related to their licenses and all documentation of all licensed assets should be catalogued in a central location for easy access and references.
3. Consider maintaining an Oracle Server Worksheet: An Oracle Server Worksheet (OSW) is a declaration of all Oracle products deployed in an organization. During an audit or license renewal, Oracle sometimes asks for a competed OSW. Therefore, all Oracle software implementations should be captured and documented in preparation for Oracle requesting it; in addition, accompanying the implementation should be all the environments — Production, Test, Development. All these are meant to accurately track where the licenses are utilized.
4. Perform a regular audit for license usage: Organizations should regularly carry out usage assessment of their software licenses and compare the results to what is contained in their Oracle Server Worksheet or any other formal asset inventory. Some of the information that should be captured in the assessment include the number of licensed assets, and how often those assets are utilized. License usage assessment can be very challenging, therefore, assistance should be sought from qualified analysts. The objective of this practice is to determine how software licenses are utilized by an organization.
Importance of a Software License Management program
The above measures are best implemented in Software License Management. With an SLM, there is an assurance for legal agreements that come with Oracle products to be adhered to. There are two core features in a Software License Management program that are essential in managing compliance issues: license auditor tool and asset discovery. The license auditor tool scans the whole network of an organization, identifying deployed licenses. The tool deploys agents to all systems in the network, identifying licensee installed in those systems, and reporting the results to a central engine of the tool. A license auditor tool that can connect through APIs with the Software Asset Management tool is recommended. Before getting into licenses, it is necessary to identify all the assets in a network. The discovery tool scans the network identifying assets, together with their configuration settings.
Generally, implementation of a Software License management follows the following steps:
1. Obtain all procured licenses: The starting point for SLM implementation is the identification and documentation of all legal licenses under your ownership.
2. Map out a deployment of the licenses: After identification of all the licenses owned your ownership, identify the number of those that are deployed, and where they are deployed to.
3. Compare procured licenses and deployed license: You can tell your compliance status by comparing licensees that were procured and those that are deployed.
4. Uninstall or procure more: If the number of procured licenses varies with those deployed, then you are misusing and or abusing the licenses.
Generally, Oracle licensing policies are complex, and due to changing technologies, the polices keep changing too, and this makes it challenging for licensees to stay abreast. The key to this difficulty is to be well educated on Oracle licensing concepts, audit processes, and software asset management techniques; knowledge in these fields is essential in managing internal IT resources and minimizing risks on licensing violations. However, it is recommended to outsource assistance from experts like Rythium to guide on asset management and Oracle licensing; this is because external experts are usually parties that have dedicated their businesses and resources in these areas. Compared with the Oracle support team that is plagued with conflicting interests between the client and Oracle, third parties only have one interest in mind: the client.
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