Oracle labels licence changes a 'clarification'

Local users should contest any move Oracle might make in Australia if it attempts to renegotiate licence fees as it is doing in the US, Meta Group warns.

Meta Group claims it has received a "flurry" of calls from its irate clients, claiming they are being pressured by the database giant to switch from user-based to more expensive processor-based licensing systems.

Meta Group analyst Mark Shainman calculated some of these customers could find their licensing fees increase five-fold, entailing millions of dollars in additional costs in some instances.

!!!!However, Oracle has responded by saying the matter concerns a "handful" of misunderstandings about its licensing policy. Those customers in the US who complained to Meta Group about what they saw as Oracle's reinterpretation of their database licensing costs, will "be grandfathered in" and not asked for more money, the database giant said in a statement.

The issue of contention is the definition of the term "multiplexing" in licensing policies.

According to Meta Group, the database giant is attempting to extend the definition of the term "multiplexing" to cover batch feeds from non-Oracle applications. Oracle has been auditing customers using Oracle data warehousing as a frontend for batch-processing feeds and, in several cases, told to switch from named-user pricing to per-processor pricing to cover additional costs, says the analyst group, which urged users to pursue legal action to defend existing licence arrangements.

Yet a spokesperson for Oracle Australia said the company has traditionally treated batch processes as part of multiplexing. Oracle also issued a missive maintaining that its licensing policy with respect to multiplexing, has been consistent and in effect for several years.

Labelling the interpretation of multiplexing as "bizarre", Meta Group counterattacks with "we believe it is Oracle that is misinterpreting its contracts".

"I have reviewed hundreds of Oracle contracts in the last two-plus years. None of them have contained provisions of that sort," Shainman said in the report.

Dr Kevin McIsaac, Meta Group program director, said the clients that alerted Meta Group to the issue in the US said they received cold calls from Oracle sales representatives.

"It was not the case of customers calling Oracle. It was Oracle sales representatives calling in, saying 'how's the data warehouse going? By the way, you should know that it's underconfigured and you need to pay more'," McIsaac said.

"We've only seen this in the past six to eight weeks. We're thinking this new behaviour is an attempt to get revenue ahead of the end of the financial year."

McIsaac said Meta will be watching very closely to see how Oracle's attempts go.

"If it gets away with it in the US, then it will try it here," he said.

Martin Coyle, president Australian Oracle User Group, Victoria, said: "It's not unusual to see this happening and causing a bit of a furore.

"Also Oracle's share price has been under pressure, as most tech stocks have been, so there's a pressure to get every dollar it thinks it should be getting."

Coyle said Oracle periodically reviews its licensing agreement models, which sometimes meet customer resistance. Yet, Oracle negotiates in public forums with its customers and meets the user group regularly to discuss these issues.

Coyle added that no local users or customers have raised concerns about multiplexing or licensing policies to the group at this point.

* Concerned about vendor's changing licensing policies? Contact siobhan_chapman@idg.com.au.

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