How a Leisure Services Provider Avoided a $10 Million Compliance Pitfall as an ArxProtect Customer

A leisure services provider resolved Oracle database licensing challenges with LicenseFortress, achieving compliance and huge cost savings.

Introduction

A mid-sized leisure services provider faced significant challenges with Oracle database licensing due to the limited expertise within their small IT department. The complexities of software compliance posed a risk of costly penalties and operational disruptions. To address these issues, they engaged LicenseFortress for specialized assistance. LicenseFortress conducted a comprehensive Oracle license review, uncovering multiple areas of non-compliance that the internal team had overlooked.

The in-depth analysis and successful resolution of their licensing issues highlighted the value of professional oversight in software compliance. Recognizing the benefits of continuous support, the leisure services provider decided to become an ArxPlatform customer. The service provides continuous surveillance of the software environment, reducing the likelihood of future non-compliance. 

Challenge

Organizations often face the challenge of undetected activation of unlicensed software features, which can lead to significant compliance risks and financial penalties. Despite proactive measures during database configuration, the unauthorized use of features such as Oracle AWR reports can still occur, posing substantial threats to businesses. As detailed in this blog, these unlicensed activations can result in severe contractual exposure and high claim values.

Solution

In the case of a mid-sized leisure services provider, the ArxPlatform monitoring system detected the unauthorized activation of Oracle AWR reports. Despite their best efforts to prevent such occurrences, it is still possible to have accidental activations due to misconfigurations or software updates. As an ArxProtect customer, they benefited from the LicenseFortress team’s prompt detection and notification, allowing them to rectify the situation immediately. This quick response neutralized the compliance issues, avoiding potential exposure estimated at $200,000 and an Oracle LMS claim value of nearly $10 million. Thanks to LicenseFortress, the provider experienced peace of mind knowing that any future risks would be swiftly managed.

Why would the Oracle AWR claim value higher than the actual compliance issue?

This discrepancy between the actual compliance fee and the claim value can be attributed to several factors:

1. Licensing Fees

  • Oracle’s Automatic Workload Repository (AWR) is a feature of the Diagnostics Pack that requires a separate license. When users generate AWR reports without the proper licensing, Oracle can charge for the entire Diagnostics Pack.
  • Additionally, the Diagnostics Pack requires the Enterprise Edition, but the leisure company used the Standard Edition. The pricing structures differ significantly: Oracle prices the Enterprise Edition based on the number of physical cores, while the Standard Edition is priced based on the number of sockets. This difference typically results in a tenfold increase in cost for the Enterprise Edition.

2. Backdated Licensing Costs

  • Oracle often calculates backdated fees from the time the unauthorized feature was first used. This means the compliance cost could include several years’ worth of licensing fees, significantly increasing the total amount.

3. Support and Maintenance Fees

  • Oracle can add backdated support and maintenance fees to the claim. These fees cover the period when users utilized unlicensed features, compounding the overall cost.

4. Oracle Policies

  • Oracle often introduces policies, such as the virtualization policy, designed to substantially escalate costs. These policies typically require customers to license all physical cores in a virtualized environment, regardless of the actual usage, leading to significantly higher expenses.

Results

The leisure services provider’s investment in the ArxPlatform solution at $20,000 annually provided substantial returns. By avoiding a potential $10 million Oracle LMS claim, they realized significant cost savings and protected their financial health. The comprehensive protection offered by LicenseFortress ensured that their licensing environment remained compliant, secure, and efficient, allowing the organization to focus on their core operations without the looming threat of costly compliance issues.

The leisure services provider valued the peace of mind from being safeguarded against unexpected licensing pitfalls. ArxProtect’s real-time monitoring and alerting swiftly identified and addressed potential compliance issues, preventing small problems from escalating. This proactive approach enabled the provider to operate confidently, fully protected and compliant.

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