Report slams Oracle’s relationship with customers for software licensing

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A report from the Campaign for Clear Licensing (CCL) has found that the majority of Oracle licensees have an “arms length, impoverished relationship” with the software giant.

The report found an alarming number of complaints, the majority of which resulting from poor communication between seller and client. 92% of those polled argued Oracle does not clearly communicate licensing changes, while 88% disagreed that Oracle audit requests were clear and easy to manage.

“Whilst every organisation 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,” the report notes. “Similarly, many customers have not invested, or are not capable of investing, sufficient resource to manage their Oracle estate, or are aware of the investment in management overhead that they will require prior to engaging with Oracle.”

Naturally the researchers gave Oracle right of reply, and it was the expected rebuttals. The charge of unknown compliance got the reply “Oracle LMS state they are there to help customers.” With the charge of poor contract terms, Oracle argued some customers didn’t have time to read their contracts.

There were also positives, however, including plenty of public information available on Oracle.com, and the fact that Oracle verifies third party tools.

In all, there were three positive points and 11 negatives, with seven calls to action. Oracle needs to ensure there is only one corporate voice, to invest in a well organised knowledge base, and to provide better business communications among others.

“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 report author Martin Thompson in a canned quote. “So entrenched is this feeling of mistrust that some organisations were fearful of speaking to us in case of any audit repercussions.”

It’s strong stuff, but it’s worth noting this isn’t just a hatchet job from CCL. Back in February, Oracle became the first software publisher to meet with the group, with the aim “to build a mutually beneficial feedback mechanism with constructive dialogue over the longer term.”

According to a source: “Oracle was first in the firing line as they are notorious for their licensing practices and were willing and open to cooperating with the campaign.”

The CCL confirmed to CloudTech it was looking at engaging with other software vendors in due course. Microsoft, SAP and IBM were mentioned, but nothing concrete has been announced. A seminar has been organised on November 21 to go through some of the report’s pain points.

In a few years time, of course, Oracle will want this to be ancient history. After being slow movers in the cloud space, the company is making a swift about turn and slowly culling its legacy software revenue. It’s a long term strategy but it hits the short term bottom line, as the company’s most recent financial results proved. Net income stood still while total revenues were up only 3% - lower than Wall Street was expecting.

Despite that, Oracle’s aggressive push to cloud is evident. The company hired former Google App Engine chief Peter Magnusson and ex-SAP head of cloud Shawn Price in recent weeks.

You can read the full report here.

Postscript: The report also catalogued the various pieces of anecdotal evidence from survey respondents. One of the most damning, when asked what they liked about Oracle licensing, was: “Nothing. Such practices should be considered illegal.”

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