5 signs you are next to be audited by Oracle

Oracle Software Insights

Theoretically, an Oracle software license audit is executed at random, but that’s not to say there aren’t triggers that can influence who is next. When your company is approached by Oracle Licensing Management Service (LMS) for an audit, you are legally bound to cooperate. LMS is Oracle’s internal organization that focuses on the proper use and distribution of Oracle systems. Companies can expect an audit every 4 or so years, but we have seen audits occur more frequently and some companies go 10 years without a ”Hello” from LMS.

If any of the following apply, you should be preparing for an audit:

You’ve backed out just before purchasing

You’ve worked closely with Oracle on a possible need for additional Oracle licenses.  During the final stages, something significantly reduces the scope of your purchase. Unless Oracle knows with absolute certainty that the existing/remaining Oracle environment adheres to the licensing rules, an audit may be on its way.  You should be working with an Oracle partner for support in maintaining compliance.

You just went through a merger or acquisition

During a merger or acquisition, both companies experience a period of turmoil as databases are consolidated, hardware is reassigned and potentially lost, and systems are blended. The IT assets are difficult to track during the dramatic change. It’s important to understand both company’s IT assets prior to merging in order to account for software licenses. You cannot reassign these licenses without exclusive written approval from Oracle. If you wait until after a merger to deal with these issues, you might have to repurchase expensive oracle licenses. If you have just gone through a merger or acquisition you should be working with an Oracle partner to prepare for an audit.

You have a noncompliance background

If you have been out of compliance in your history with Oracle, you would be shrewd to adopt the position that Oracle will audit you again. After having been audited and found noncompliant, it would be reasonable to assume that your IT team would have taken action to accurately manage your company’s software portfolio. This isn’t always the case. Even competent teams with the best of intentions sometimes miss details that can put a company out of compliance. Oracle licensing is complicated. This is why you should be working with an Oracle partner to prepare for an audit.

You don’t have a proven license management process or partner

Do you have a license management process in place today? If not, how can you guarantee that your current environment is compliant? While Oracle may not know how effective you are at keeping track of your own licensing utilization, you know. Therefore, it is prudent to put key processes in place or to work with an experienced partner to ensure you are not caught off guard.  

A good license management process keeps track of licenses, order dates, renewal dates, discounts, and contracts signed during the purchase, such as the Oracle License and Service Agreement (OSLA). This information should be documented and accessible upon request. If this detailed information is not being tracked by your team, it’s likely that at some point your team will lose track of what they are licensed to use. Combine that with the fact that Oracle, for the most part, can be installed anywhere without requiring license keys. We have seen countless times where companies who come to us are in a situation where they don’t know what they’re licensed for and don’t know what they’re using. An Oracle partner can assist in managing your software licenses as your business grows and will ensure you purchase only the licenses you need.

It’s been a while since you bought software licenses and you’ve had to do a hardware refresh

A hardware refresh offers an opportunity to improve processing efficiency, reduce energy costs, and increase productivity. Changes to your hardware environment, such as adding servers and/or processors, can require you to purchase additional licenses. The new server may have an increased number of processor cores which need to be accounted for. If the old servers are moved into test and/or development environments, they must also be licensed.

You may be able to reduce the number of licenses that are deployed by understanding where the software instances are located on the hardware being refreshed. Knowing this can offer an opportunity to repurpose and allocate licenses from the old server to the new server. An Oracle partner will be able to provide you with a software license assessment in order for you to stay compliant during a hardware refresh.

A certain way to combat an Oracle audit is to show Oracle you have complete control over your Oracle assets. Learn more on how to reduce audit risks here. The best practice for this is to have an asset management system in place to track what software is in place, where it is located, when it was purchased and for what term, who is using it, and what contracts or documentation is associated with the software. An IT management team, such as Guardian Eagle, can assist you in this process in order to ensure you have full control over your IT assets.