Spilling The Tea On The Audit Exemption Promise Under Oracle's VSAM Partner Program

Imagine finding the perfect Software Asset Management (SAM) partner, one who whispers the enticing promise of "no future audits" into your ear. It's tempting to dive headfirst into this relationship, swayed by the assurance of security and ease. However, Oracle's Verified Software Asset Management (VSAM) program and its independent alternatives suggest proceeding with caution. These programs, akin to charismatic suitors, entice with audit exemptions and the lure of drama-free management. Yet, as with any relationship, especially one orchestrated by Oracle, there's a fine print that whispers caution: "I won't pry, but my associate might."

While the program dangles the appealing possibility of audit exemption, it's crucial for customers to carefully consider what this entails. It's somewhat ironic that Oracle has positioned itself as both the source of the problem, through its aggressive audit practices, and the provider of the solution, via audit exemptions.

Key Takeaways

• Oracle's VSAM Partner Program, launched at CloudWorld 2022, lets certified partners advise on licensing while Oracle retains audit control.
• VSAM covers only Database, Fusion Middleware, and E-Business Suite — Java is notably excluded.
• Audit exemption under VSAM is conditional on continuous compliance and Oracle's explicit approval, creating an ongoing oversight mechanism rather than true exemption.
• The dual advisor/enforcer role of VSAM partners creates a conflict of interest, since guidance may favor Oracle's financial interests over the customer's.
• In more than 80% of cases, customers benefit financially from either certifying current use or exiting Oracle ULAs rather than renewing them.
• Through ArxProtect®, if a court establishes noncompliance resulting from LicenseFortress advice the customer followed, LicenseFortress pays the required license costs, subject to the applicable agreement.

VSAM Program Red Flags

1. Limited product coverage — Java is excluded from the program.
2. Conflict of interest — partners both advise on and enforce Oracle's licensing policies.
3. Non-contractual policies — compliance with policies like Partitioning may be required for exemption eligibility, exceeding contractual obligations.
4. Conditional audit exemption — tied to continuous compliance and Oracle's ongoing approval, amounting to perpetual audit-like observation.
5. Confidentiality agreement — a three-way pact between Oracle, the SAM partner, and the customer that requires careful scrutiny to protect sensitive data.

Oracle VSAM Program Overview

Launched at CloudWorld 2022, Oracle's VSAM Partner Program signifies a strategic departure from traditional, audit-focused license management. Integrated within the Oracle Partner Network (OPN), this program mandates that partners satisfy certain certification requirements, which may not necessarily reflect practical experience. Its core aim is to redistribute some of Oracle's licensing duties to its partners, extending the reach of Oracle's Software Investment Advisory (SIA) and Global License Advisory Services (GLAS). The program promotes an active partnership approach, with Oracle maintaining audit control to ensure a balance of autonomy and supervision.

Participation in the VSAM Program symbolizes SAM providers' commitment to Oracle's licensing principles, both explicit and implied, effectively pledging their loyalty to Oracle's standards. Key aspects of the program include:

• Opt-In Requirement: Customers are required to opt into the program
• Enrollment Process: Involves submitting a form that details the customer's entity and the specific Oracle programs covered
• Confidentiality Agreement: Establishes a three-way confidentiality pact among Oracle, the SAM partner, and the customer to enable open information exchange
• License Inventory and Data Collection: Critical for setting a foundational license position
• Strategy Implementation: SAM partners guide the implementation of compliance strategies, including remediation or optimization
• Oracle Communication: Outlines the process for requesting an audit exemption from Oracle, contingent upon Oracle's consent

VSAM Program Red Flags

🚩 Just a Slice of Pie: Limited Product Coverage

The program zeroes in on a specific subset of Oracle's offerings, notably its Database, Fusion Middleware, and E-Business Suite. This targeted approach covers a significant portion of Oracle's audit activities but notably omits Java—a glaring exclusion. This oversight prompts critical questions about how licenses for non-included products are managed and supervised.

🚩🚩 Two-Faced: Potential for Conflict of Interests

The structure of Oracle's VSAM Program, which assigns partners the dual role of advising on and enforcing Oracle's licensing policies, inherently carries a risk of conflict of interest. This arrangement might lead to situations where the guidance offered is more aligned with Oracle's financial interests rather than focusing on what's best for the customer. To circumvent such conflicts, engaging with a fully independent entity, devoid of any affiliations with Oracle, is advisable.

🚩🚩🚩 Read the Fine Print: Non-Contractual Policies

Oracle's approach to enforcing non-contractual policies during audits, such as the Partitioning Policy, raises questions about the prerequisites for obtaining an audit exemption. Specifically, if compliance with such non-contractual policies is a condition for audit exemption eligibility, participants might inadvertently commit to expenditures that exceed their contractual obligations.

🚩🚩🚩🚩 Trust Issues: Audit Exemption

The allure of an audit exemption from Oracle, at first glance, seems straightforward and highly beneficial. However, a deeper examination reveals a more complex reality. Such exemptions are closely tied to the continuous compliance with Oracle's licensing terms, establishing an ongoing oversight mechanism. This scenario essentially places customers under a perpetual audit-like observation. The exemptions are conditional, hinging not only on strict adherence to licensing agreements but also on obtaining Oracle's explicit approval.

🚩🚩🚩🚩🚩 Privacy, Please? Confidentiality Agreement

The confidentiality agreement within the VSAM program warrants a more detailed examination. This tri-party agreement between Oracle, the SAM partner, and the customer is pivotal, as it underpins the entire framework of information sharing. It's crucial that this agreement is robust, ensuring that sensitive data shared by the customer is protected and only used within the confines of the program's intent.

Audit Exemptions are an Emerging Trend in SAM

Following our recent visit to an industry conference, it's clear that audit exemptions are becoming a significant trend within the realm of Oracle's software asset management. Notably, we encountered a new independent Oracle audit exemption program that's stirring quite the conversation, reminiscent of the VSAM Partner program but with its own nuances.

The pitch is intriguing: they claim, "No data is shared with Oracle," yet also assert that "Oracle trusts us to carry out this work." This dual claim is like saying, "We are exclusive, but it's complicated." When has Oracle ever extended such trust without expecting something in return?

Oracle is no stranger to offering a "no audit" clause when customers are willing to overpay for licenses. This is particularly evident with Oracle Unlimited License Agreements (ULAs). In more than 80% of instances, customers would benefit financially from either certifying their current use or exiting these ULAs, as they often end up significantly overpaying for the licenses they actually require.

Conclusion

Engaging in an Oracle-endorsed audit exemption program essentially means you're appointing a Software Asset Management (SAM) provider to echo Oracle's potential audit findings. This arrangement doesn't just risk you paying more than necessary for your licenses; it also involves compensating a third party to recommend that you keep overpaying.

Through ArxProtect®, if a court establishes noncompliance resulting from LicenseFortress advice the customer followed, LicenseFortress pays the required license costs, subject to the applicable agreement.

Coverage note: Available through ArxProtect® only. Oracle Java is excluded. LicenseFortress provides legal representation but does not cover outside legal fees. Protection requires that the customer followed LicenseFortress’s advice and is subject to the applicable agreement.

Choose a partner that offers real value, not just promises.

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