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11/3/2014
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Oracle Stokes 'Hostile' Customer Relations, Study Says

Campaign for Clear Licensing survey finds 92% of customers say Oracle does not clearly communicate licensing changes.



Oracle customer relationships are "predominantly hostile and filled with deep-rooted mistrust."

This is the conclusion of a just-released survey of more than 100 Oracle customers worldwide conducted by the Campaign for Clear Licensing (CCL), a UK-based organization that's championing improvements in software licensing and auditing practices.

The report, "Key Risks In Managing Oracle Licensing," uncovered overwhelmingly negative perceptions of Oracle audit practices, Oracle License Management Services (LMS), and Oracle communications regarding licensing changes.

[Want to save money on software? Read Software Licensing: Move From Defense To Offense.]

On auditing: Responding to the statement "Oracle audit requests are clear and easy to manage/respond to," only 2% chose "strongly agree" and 10% "agree," while 44% chose "disagree," and another 44% chose "strongly disagree."

On Oracle LMS: Reacting to the statement "Oracle LMS has been helpful during the audit, contract renewal, and negotiation process," 0% of survey respondents chose "strongly agree," 22% chose "agree," 41% chose "disagree," and 37% chose "strongly disagree."

On communication: Responding to the statement "Communication from Oracle regarding licensing changes has been clear and straightforward," 2% chose "strongly agree," 5% chose "agree," 46% selected "disagree," and another 46% chose "strongly disagree."

"Based on our research and conversations over the last six months, we have found that customers' relationships with Oracle are hostile and filled with deep-rooted mistrust," said Martin Thompson, founder of the CCL, in a statement on the report. "So entrenched is this feeling of mistrust that some organizations were fearful of speaking to us in case of any audit repercussions."

An Oracle spokesperson declined to comment, saying the company had yet to receive a copy of the report. Oracle has cooperated with the CCL, a member organization launched in Europe early this year and that also has plans to expand into the North American market. In March the organization reported that Oracle was "the first [software] publisher to collaborate with the CCL with a view to building on-going positive dialogue."

The Campaign for Clear Licensing survey findings on the Oracle License Management Services unit.
The Campaign for Clear Licensing survey findings on the Oracle License Management Services unit.

Oracle participated in a roundtable discussion with public and private-sector companies hosted by the CCL, and the group also met with the Oracle LMS team at Oracle's offices in Reading, UK. Apparently that didn't sway the findings of those surveyed, which included customers from Europe (56%), the US (29%), and the Asia-Pacific region (15%).

Oracle is one of the few remaining software vendors that takes an "honor system" approach to licensing, said Amy Mizoras Konary, research VP, software licensing and provisioning, at IDC. In contrast to what she calls a "trust-but-verify" approach, where unlicensed features are locked down, Konary said the honor system makes it all too easy for administrators to install and turn on features not covered by a current license.

Oracle Database, for example, is known for tricky licensing and frequent compliance problems, particularly in virtualized environments, according to Konary. To avoid problems, "a simple rule might be, 'Oracle Database does not go into virtualized environments, and if it does, here are the steps that must be followed,'" Konary told InformationWeek in a recent cover story on license-management practices.

Thompson of the CCL concluded that "whilst every organization entering into contracts must be accountable for the agreements they purchase, a disproportionate amount of risk and management overhead appears to be placed on the customer by Oracle. Similarly, many customers have not invested, or are not capable of investing, sufficient resource to manage their Oracle estate."

CCL recommended seven steps Oracle could take to improve customer relations, including offering a single, clear voice on license terms, ensuring clarity around audits, and making customer satisfaction, relationship strength, and value the key indicators of company success rather than audit revenue.

Avoiding audits and vendor fines isn't enough. Take control of licensing to exact deeper software discounts and match purchasing to actual employee needs. Get the Software Licensing issue of InformationWeek today.

Doug Henschen is Executive Editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data and analytics. He previously served as editor in chief of Intelligent Enterprise, editor in chief of ... View Full Bio

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