Avoiding Conflicts of Interest in Software Asset Management
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It can be tempting to tell yourself that any consultant will do when selecting someone to help you manage your Oracle products or implementation plan, but that’s just not true. And one topic that goes unmentioned far too often is the importance of evaluating any potential consultant to ensure there are no conflicts of interest. 

When Oracle told a 1000-employee cloud-based software provider after a routine audit that they owed $57 million, they brought in a consult which determined that they owed exactly the same figure Oracle said they did.

Still skeptical, the software provider didn’t settle for the first consultancy’s answer the organization called LicenseFortress, which determined that they owed the far-less intimidating figure of $244,000 – a figure the software provider was able to get Oracle to accept. Oracle License Management services arrived at the 57 million dollar figure by treating oracle policy as if it were a contractual obligation, relying on Oracle’s strict Partitioning Policy. All too often, both companies aligned with Oracle and Oracle themselves treat these policies as contractual obligations – but they are typically non-contractual and should be treated as such. 

Oracle has specific methods it uses when determining the proscribed setup of its software and tools, which it advises users and internal staff alike to follow. While there may not be any truly malevolent motives behind their strategies, the Oracle-proscribed setup always benefits Oracle. 

As an example of this, Oracle’s sales engineers might tell an organization that uses Oracle software that they require 1000 licenses when there is a strong argument that the organization only needs 20. Frequently, Oracle customers are under the impression that they need to license every node of a VMware cluster. Following the generally adhered to advice, the customer ends up spending far more money than we believe necessary – all while Oracle profits. 

Knowing When to Be Cautious

If a company your organization is doing business with, such as a license reseller, stands to make more money from reselling licenses, don’t you think their salespeople and consultants will encourage a license count that yields in more sales? As a general rule, we encourage licensees to ensure that the person selling licenses shouldn’t be the same person evaluating the number of licenses their shop needs. Employing a vendor or consultants to do both potentially creates a conflict of interest. 

And while the Software Asset Management (SAM) tools used to evaluate compliance typically don’t have conflicts of interest embedded within them, moreover, the programmers and consultants that work with them may.

It’s important to watch for these biases when working with value-added resellers (VARs), systems integrators, and license consultants that simply tend to apply Oracle’s “best practices” (which aren’t always best) without question. This might not be a “wrong” way to do things, and employing these methods might have some benefits; Oracle audits will run smoothly, and everything will work as intended. But, on the downside (and it’s not a small downside), these methods are unlikely to be the most efficient, and, in our experience, they’ll rarely be the least expensive.  

When selecting a partner or consultant, it’s key to ensure there are no potential conflicts of interest. It’s worth noting that LicenseFortress has made a business decision to never align with Oracle, eliminating this as a potential concern. When we offer license advice, it is based on the customer’s best interest unlike Oracle partners, who we understand, are expected to treat Oracle policy as a contractual obligation.  

People to Avoid

If you want to run your shop as efficiently and/or inexpensively as possible while still being compliant, it’s important to consider whether your business partners might have a conflict of interest. A few things to be wary of include:

Oracle validated SAM tools

If you’re working with a partner that has a SAM tool Oracle has signed off on, it likely means they’re taking Oracle’s guidelines directly out of the box and applying them. While they might be slightly less likely to gouge you than Oracle, in our opinion there’s really no point in using them other than to see exactly how an Oracle audit would go – and chances are that there are less expensive ways to optimize your organization’s infrastructure than anything to be suggested. We believe that you can almost certainly do better. 

Oracle partners

Oracle usually incentivizes oracle partners to sell you products and licenses. Their business model often includes a “free” or inexpensive consultation, and, as we have seen, many makeup for that “discount” in the sales they will make to you. This arrangement generally isn’t beneficial for most of their clients. 

Former Oracle employees

We’re not saying a former Emerald City denizen can’t make a wonderful addition to your team, especially on the technical side. However, it’s important to be aware that an ex-Oracle employee has likely been trained according to Oracle orthodoxy, and you may need to break a few of their Oracle-centric habits. They may unthinkingly parrot the same practices as Oracle and they’re likely to still maintain connections with former co-workers still residing in the belly of the beast. Be cautious about bringing formerly Oracle-employed consultants onboard.

The bottom line is to be mindful of potential conflicts of interest when choosing anyone evaluating your software assets or making decisions that could cost your organization millions of dollars. Always ask the following question: Whose interests does the consultant have at heart – yours, Oracle’s or their own? Unless you can confidently and unequivocally answer the question with “yours”, we recommend seriously reconsidering your chosen consultant.

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