Oracle Update TikTok, Sunrise Firefighters, JEDI, & The Supreme Court

In this podcast AJ Witt is joined by Dean Bolton & Michael Corey from LicenseFortress & Art Beeman and Joel Muchmore from Beeman & Muchmore to discuss current topics in Oracle licensing in the context of the landmark Mars vs Oracle case. Joel & Art were lead litigators for Mars in that case and have plenty to share about Oracle’s trading and litigation strategies. LicenseFortress work with Beeman & Muchmore to provide legal services as part of their guaranteed Oracle License Compliance solution.

We highlight best practice in transacting with Oracle:

• Understanding agreements
• Thinking about the exit
• What it actually means when you buy and run Oracle software
• Does all software licensing need specialist legal counsel?

We also cover a number of wider topics relating to Oracle and “Big Tech” in general with a surprising take on the current Oracle-Walmart-TikTok deal, an update on Sunrise Firefighters’ action over Oracle’s cloud revenue reporting, and the future direction of technology companies in the US. Recorded in late September 2020 this is a timely listen with judgments expected in the Sunrise Firefighters case and also the Google vs Oracle API dispute which has reached the Supreme Court and has profound implications for the future of software licensing.

Introduction of the Podcast Panel [00:00:00]

Announcer:
Welcome to the ITAM Review podcast. News, reviews, and resources for ITAM, SAM, and Software licensing professionals.

AJ Witt:
So, hello everyone. Welcome to this podcast from the ITAM Review. I’m here today with some folks from LicenseFortress and Beeman & Muchmore. Let’s get into some introductions. We’re going to be talking about Oracle, all things Oracle today, how they do business, what that means for you, and we are even going to get into the crazy world that is TikTok, Walmart, and geopolitics and how Oracle got involved in all of that. So, something to look forward to at the end of this, but let’s get into introductions. Welcome, Michael.

Introducing the Guests and Their Expertise [00:01:00]

Michael Corey:
Yeah. How you doing? Thank you for having me today. So just a quick introduction, I’ve been working at Oracle since Version 3 or over 36 years. I’m the original Oracle Press author, past president of the International Oracle Users Group, and Oracle ACE today. So I’ve made my living around Oracle.

AJ Witt:
Thanks, Mike. And Dean? Hi, Dean.

Dean Bolton:
Hello, AJ. Hello everyone. My name is Dean Bolton, co-founder and chief architect at LicenseFortress. I’ve been working with Oracle for about 20 years now, started on Version 8i, Oracle Certified Professional, Oracle Certified Master, VMware V Expert, Oracle ACE Associate. So a lot of technical expertise on the Oracle side of things right alongside Mike.

AJ Witt:
Great, thanks. We also have Art Beeman from Beeman & Muchmore. Hi, Art.

Deep Dive into Legal Expertise on Oracle [00:03:00]

Art Beeman:
Hello and great to be here. Thank you for the invite. I am one of the founding partners for Beeman & Muchmore. I am a trial lawyer for now nearly 40 years and have represented various technology companies in myriad disputes, including software, both in the patent space and copyright space. Most recently, along with Joel Muchmore in the founding of our firm earlier this year, we are dedicated to software licensing disputes, particularly in the ERP space. We’re enjoying a splendid partnership with LicenseFortress, bringing products to market to protect licensees. We’re going to be talking about Mars v Oracle today, and along with Joel, I was one of the lead lawyers on that case. Great to be here.

AJ Witt:
Thanks, Art. And hi, Joel, as well. Hi.

Joel’s Introduction and Oracle’s Litigious Nature [00:04:00]

Joel Muchmore:
Hi, thanks again for having both Art and I and everybody else here. I’ve been a commercial litigator for about 20 years, much of that time in the intellectual property space. About five years ago, Art and I litigated the Mars v Oracle matter, which opened a world of software licensing litigation, especially with Oracle. Along with Art, we founded Beeman & Muchmore, dedicating most of our time to software licensing. You don’t do legal issues in software licensing without having Oracle at the forefront of a lot of it.

Oracle’s Approach to Litigation [00:05:00]

AJ Witt:
Absolutely. Great to have you along, Art, Joel, Dean, and Mike. We’ve written about the Mars case. It’s somewhat legendary in IT asset management. It comes up all the time when you talk about Oracle and litigation between customers and partners. Today, we’ll get into Oracle’s litigious nature and why this is unusual in modern tech relationships. Microsoft and AWS market as partners, but Oracle seems to take a different approach. Why do you think that is?

Art Beeman:
It’s a great question, but it can’t be answered easily. You have to start with Larry Ellison’s persona, who has been aggressive from the start. He’s not afraid to use courts to gain market share. For example, Oracle sued SAP in a copyright dispute and won the largest copyright verdict at the time, over a billion dollars. This establishes their litigious reputation.

Mars v Oracle and Proactive Legal Strategy [00:07:00]

But what Joel and I found in the Mars v Oracle case was interesting: we sued Oracle on behalf of Mars, and there’s confidentiality, but the reason we went after Oracle proactively instead of waiting for an attack was strategic. Joel, why don’t you expand on that?

Joel Muchmore:
Well, it was about controlling the narrative and avoiding Oracle’s typical “shock and awe” tactics. By suing first, Mars avoided the aggressive, reactive stance Oracle typically takes, where they overwhelm licensees with massive financial penalties for minor infractions. The case never reached a judgment because Oracle didn’t want key terms to be scrutinized in court, like “installed versus running” in virtual environments like VMware.

Oracle’s Business Strategy: Audits and Revenue Generation [00:09:00]

AJ Witt:
Mike, Dean, from a technical standpoint, it seems odd that Oracle is so litigious despite having a great product. Why do they take this approach?

Michael Corey:
Great question. It’s business. Oracle uses audits not for compliance but as a revenue-generating tool. They audit, find supposed infractions, and use that as leverage to sell more software or cloud credits. It’s about revenue. Larry Ellison wants to be number one at all costs, and this is part of their strategy. Oracle’s audits aren’t about fairness; they’re a sales arm.

Managing Oracle Contracts and Risks [00:11:00]

AJ Witt:
So, if you’re an Oracle customer, it’s not just about using the product but knowing how to navigate the terms. Dean, how should companies approach this when considering Oracle?

Dean Bolton:
Yes, it’s crucial to understand the cost upfront. The issue is the confusion and vagueness in Oracle’s contracts. It’s like buying a car without knowing the price. You need to understand what you’re getting into and have the legal and technical teams in place to manage these complexities. With LicenseFortress, we emphasize understanding the product’s value but also putting measures in place to control cost and ensure compliance upfront.

The Need for Legal Expertise in Software Licensing [00:14:00]

AJ Witt:
Do companies need more than just a standard procurement team when dealing with Oracle? Should legal teams be more involved?

Michael Corey:
Absolutely. Oracle contracts are complex, and they can change overnight, like when they introduced the hyper-threading penalty in the cloud. You need experts who understand licensing, not just technical staff or general legal counsel. Oracle’s policies and contracts are designed to catch you off guard, so it’s critical to have both legal and technical expertise on your side.

Oracle’s Policies vs. Contractual Obligations [00:16:00]

AJ Witt:
Yeah, that’s a prime example, the cloud policy change. So, when entering into a contract with Oracle, understanding what’s policy and what’s a contractual obligation is essential. Mike, could you explain the difference and how Oracle uses this to its advantage?

Michael Corey:
Definitely. One thing customers need to understand is the difference between Oracle’s policies and their contractual obligations. Take virtualization as an example. The word “virtualization” doesn’t appear in Oracle’s contracts, but Oracle has a policy around it. You decide where to run your Oracle workloads, but Oracle’s policies can change overnight. This happened with the cloud penalty—one day there was no hyper-threading penalty, and the next, they doubled the price. So, customers need to know what’s in their contracts versus what Oracle says is policy, because policies aren’t binding unless they’re included in the contract.

Dealing with Software Acquisitions and Changing Terms [00:18:00]

AJ Witt:
Yes, and you mentioned that you might not even be an Oracle customer by choice. If Oracle acquires a company you’ve partnered with, you could find yourself in a relationship where terms suddenly change. We’ve seen this with Oracle’s acquisition of MICROS, for example, and others. Mike and Dean, how should companies manage this type of situation where they’re suddenly dealing with a new vendor and new terms?

Dean Bolton:
That’s a great point, AJ. This situation happens a lot—companies buy software from a vendor, and then Oracle acquires that vendor. The terms often change, and you might not realize until it’s too late. One of the ways companies can manage this is by having a clear exit strategy, which includes understanding the total cost of ownership and planning for potential changes. It’s also crucial to have a detailed understanding of the new terms Oracle brings to the table.

Michael Corey:
Exactly. And to Dean’s point, understanding the total cost of ownership is essential when thinking about replacing Oracle. Many businesses are so deeply embedded in Oracle that ripping and replacing it would cost millions, if not more, in both direct costs and business disruption.

Calculating the Total Cost of Ownership for Replacing Oracle [00:20:00]

AJ Witt:
Right, which brings us to the question of cost. Mike, Dean, could you talk about the total cost of ownership when a company considers moving away from Oracle? What does that process look like, and what should companies consider?

Dean Bolton:
The total cost of ownership (TCO) is much higher than most people expect. Replacing Oracle can be a seven-figure or even eight-figure project, depending on the environment. It’s not just about switching a database; it’s about replacing mission-critical applications and systems that your business depends on. For example, replacing Oracle with something else like SQL Server might seem like an easy move, but it can take years and cost millions. And during that transition, there’s significant risk of downtime and disruption to the business.

Michael Corey:
And never forget the disruption. When you implement a new system, it can take months or even years to get back to the productivity levels you had with Oracle. So, it’s a huge decision to make.

Unequal Relationships and Contract Leverage [00:23:00]

AJ Witt:
Yeah, that’s a really important point. When companies get to the end of these multi-year upgrade or migration projects, they often end up back where they started but with massive costs. This unequal relationship seems to be a recurring theme when dealing with Oracle. Companies need the product, but Oracle holds all the cards. How do you suggest companies handle this imbalance?

Art Beeman:
The only way to level the playing field is through the contract and understanding every document you sign. What’s been shocking to us in cases like Mars v Oracle is how many companies just accept Oracle’s terms without pushing back. They need to negotiate better terms upfront, but often they just want the product, and they rush through the process. If you don’t have the right legal and technical support when you’re signing these agreements, you could be locked into very unfavorable terms.

Joel Muchmore:
And to build on that, Oracle’s contracts have evolved over decades to protect their interests. We’ve seen contract provisions that act like a maze—there’s no clear way to hold Oracle accountable. These contracts can be hundreds of pages long, with layers of policies incorporated by reference. The complexity itself is a tool Oracle uses to maintain control over the relationship.

Legal Risks in Oracle Contracts and the Importance of Preparation [00:25:00]

AJ Witt:
It sounds like a lot of companies don’t fully understand what they’re signing when they agree to Oracle’s terms. Would you say this is common even in larger organizations with legal teams?

Art Beeman:
Yes, it’s very common. Many in-house legal teams simply don’t have the depth of expertise needed to deal with Oracle’s contracts. This is why Beeman & Muchmore was formed. After Mars v Oracle, we realized that there’s a need for specialized legal support focused on software licensing. These contracts require an immersive approach, and general counsel often doesn’t have the resources to dig into every detail. The only way to protect yourself is by partnering with experts who understand both the technology and the legal landscape.

The Role of Expert Legal Support in Navigating Oracle Contracts [00:28:00]

AJ Witt:
That’s a key takeaway for IT asset managers and procurement teams—having expert legal support is crucial. Art, Joel, you’ve been in this space for a long time, and it sounds like the same mistakes keep happening. Companies are not leveraging the right expertise when dealing with Oracle.

Joel Muchmore:
Absolutely. And this is something that needs to change. Companies need to recognize that Oracle’s licensing practices are not the same as buying other products or services. You wouldn’t go into a major surgery without a specialist, and you shouldn’t negotiate Oracle contracts without someone who understands them inside and out. We’ve seen too many companies get into trouble because they didn’t prepare properly.

Current Legal Cases and Oracle’s Influence [00:30:00]

AJ Witt:
Let’s shift gears a bit to current events. Joel, I know you’ve been following the Sunshine Firefighters’ stock fraud case. What’s the latest update on that?

Joel Muchmore:
The latest is that Oracle filed a motion to dismiss, which the judge granted but gave the plaintiffs an opportunity to refile. The core of the case is that Oracle was accused of overstating their cloud revenue by using aggressive audits to push customers into buying cloud credits. The whistleblower allegations were pretty shocking, but Oracle is fighting it aggressively. The next hearing is coming up soon, so we’ll see where it goes.

TikTok, Walmart, and Oracle’s Role in Geopolitics [00:33:00]

AJ Witt:
That’s definitely something to watch. Another big headline is Oracle’s involvement with TikTok and Walmart. Mike, Dean, what do you make of Oracle’s role in this?

Michael Corey:
It’s wild, isn’t it? Oracle partnering with Walmart to acquire TikTok—something nobody saw coming. But this is part of Larry Ellison’s strategy. Oracle has been trying to leapfrog ahead in the cloud wars, and TikTok is a massive opportunity for them. By controlling TikTok’s US data, Oracle gains a significant foothold in the cloud market.

Joel Muchmore:
It’s also a reflection of Oracle’s political connections. Larry Ellison has maintained close ties with the Trump administration, and it’s no surprise that Oracle was selected for this deal. Oracle has been very strategic in positioning itself as a trusted partner for government data, and this TikTok deal only solidifies that.

Wrapping Up: The Future of Oracle and Software Licensing [00:35:00]

AJ Witt:
This conversation has covered a lot—from Oracle’s litigious nature to its role in geopolitics. It’s clear that Oracle remains a dominant force, and companies need to be prepared to navigate its complex licensing practices. I want to thank everyone for their insights today. It’s been a fascinating discussion. We’ll continue to follow these stories and provide updates as they unfold. Thank you all for listening!

Michael Corey:
Thank you.

Art Beeman:
Great to be here. Thank you.

Joel Muchmore:
Thanks again.