The Empire Strikes Back: Oracle’s Increasingly Aggressive Audits, Explained
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A long time ago (ok, before the infamous Google suit was determined), in a galaxy far, far, far away (except not really that far), Oracle – while never exactly a loveable entity and always prone to auditing and assessing clients – could, upon occasion, be flexible. 

If, for example, an Oracle client operated in the online retail space and Black Friday was coming up, it wasn’t uncommon to ask Oracle to hold off on that audit. And Oracle usually complied with the request. 

“In the past… it was not a big deal to postpone an audit for 30, 60, 90 days for business reasons,” says Michael Corey, co-founder and chief operating officer at LicenseFortress. 

But now? “On occasion, we’re getting flat out ‘no,’” he says.

I Am Altering the Deal. Pray I Don’t Alter It Further

This increase in aggression is something that piqued this year, not-so-coincidentally kicking off after Oracle lost their suit against Google. Putting it frankly, Oracle’s leadership almost certainly thought they would win that lawsuit, and was counting on a windfall that never materialized. Add to this the decreased need to look like a good corporate citizen now that the Google case has been decided by the highest court in the land and the simple fact that times are uncertain for everyone and you’ve got a recipe for an aggressive corporate entity, comparable to an enraged Sith lord. 

According to Corey, the aggression hasn’t solely been directed at Oracle clients based in the US, but customers all over the globe – so, if you’ve noticed an uptick in aggressive behavior from Oracle around audits – or just about anything else – you are certainly not alone. But that can be cold comfort when you’re trying to figure out how your company is going to survive an aggressive audit and/or fines. “Don’t be daunted by Oracle’s posturing,” suggests Joel Muchmore, a Partner at Beeman & Muchmore, LLP, a Northern California law firm specializing in software licensing and auditing. “If you have a reasonable request of Oracle, don’t be afraid to repeat it several times before you finally accept ‘no’ for an answer.” 

Employ Your Own Jedi Mind Tricks

Getting told by Oracle – or any vendor – that they’re giving you absolutely zero slack around an audit is intimidating. But there are ways you can – and should – strike back.

1. Review your contract
Think of your contract as being like Obi Wan Kenobi – your only (or at least best) hope. Most contracts have a standard clause stating that audits can’t interfere with normal business operations. Is Oracle insisting you run an audit this month even though it’ll cause major disruption for your company? This is likely a clause to refer to when asking Oracle to give you a bit of a break. 

“You have to really say, ‘do we really need this?’ And then you’re going to have to push back,” says Corey. Expect to get forceful – but first, take a second look at that audit request. 

2. Review Oracle’s request
Is this request for an audit an official request? Are you sure? Some LicenseFortress clients have reported receiving requests for audits on products such as Java, which Oracle didn’t begin charging for until 2019. When reviewed, these requests typically are not actually binding – they’re just requests, which you can decline. “Licensees should always adhere to their contractual obligations, but they should not give Oracle freebies” says Arthur S. Beeman, also of Beeman & Muchmore. “Absent special circumstances, a licensee is asking for trouble by volunteering information to Oracle outside of the contractual protections of the audit provision.”  So, stay on your toes. Oracle might find your lack of faith disturbing, but a healthy sense of paranoia never hurt anyone. 

3. Watch your back
As we’ve discussed on this blog previously, Oracle – as well as other vendors – has recently adopted a far more aggressive stance on contracts, renewals, and related areas. When something is sent over to you, whether a paper copy or electronically, take time to review it, and strongly consider bringing it to an attorney or consultant for their expert advice. 

May the Force Be with You

Oracle offers great products, but its policies can be very aggressive, especially when it comes to audit requests. It never hurts when facing a potential audit to have a good lawyer or consultant (like LicenseFortress) on your side. Remember: Oracle might not be evil, but they do have all the resources of an empire; make sure to have your very own band of rebels on your side, and be ready to be one with the force. 

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