ITAM Review Oracle Seminar

Oracle Seminar, 21st November, London #ITAMROracle @itamreview Platinum Sponsor


Welcome & Open

Mark Flynn, ITAM Review


Agenda - AM

09.35 – 09.45 Vendor Introductions Vendors

09.45 – 10.20 Common Oracle licensing contracts and grey areas of licensing risk

ITAMS

10.20 – 10.55 Oracle ULA – Top Tips for maximising ROI Piaras McDonnell

10.55 – 11.25 Refreshment Break

11.25 – 12.00 What to expect during an Oracle License Audit and how to prepare yourself

Richard Spithoven

12.00 – 12.35 Taking the bite out of software licensing terms Deutsche Post DHL

12.35 – 13.35 Lunch


Agenda - PM

13.35 – 14.20

Workshop: Practical Strategy for

reducing Oracle licensing costs

Workshop: How to build an Oracle audit defense strategy

Workshop: Getting under the hood

of DHL’s unique approach

14.20 – 15.05






15.05 – 15.25 Refreshment Break

15.25 – 16.10






16.10 – 16.20 Key Risks in managing Oracle Licensing Report Summary

Martin Thompson & Mark Flynn

16.20 – 16.30 Closing Remarks


Platinum Sponsor

Gold Sponsors


CCL’s Oracle Research


Common licensing contracts and

grey areas of licensing

Madalina Chirculescu Monica State


Agenda 1. Oracle Licensing Complexity

2. Oracle Contract Types:

Ø  Standard:

q  OLSAs/OMAs (Oracle Licence and Services Agreement/Oracle Master Agreement)

and the ODs (Ordering Document)

Ø  Non-standard

q  ULA (Unlimited Licence Agreement)

q  EA (Enterprise Agreement)

q  Campus Agreement

q  POF ( Pool of Funds)

3. House-Keeping Rules.

4. Gotchas/Areas of risk

5. Recommendations


Oracle Licensing Complexity

Lack of restriction

on software deployment:

no installation

key

Difficult software

recognition: no SKU ID

Compliance measured on usage,

not installation

Features and options

come already enabled

Flexibility comes with

its drawbacks


Oracle Contract Types

Standard Agreements

Non-standard Agreements

OLSA/OMA OD

Campus Enterprise

ULA POF


House-Keeping Rules

Oracle Contracts – Handle with care!

q  What : Record all purchases – Ordering Documents, Schedules, Addendums, Support Renewals

q  How : In historical order – Register every document chronologically

q  When : Periodically – every 6 months, every quarter, year

q  Who : Dedicated resource – internal and/or external

This is not sufficient ! Understand what you sign!


Gotchas/Areas of risk Top 5

1.  Audit – standard vs. non-standard

2.  Inflated quantities – support related

3.  Territory – location where you are allowed to use the licences

4.  Customer definition – some ODs, depending on the size of your company, may hold definitions related to the entities included in the agreement

5.  Internet Hosting – use NOT for internal business operations


Gotchas/Areas of Risk Others

ü  Order minimum – usually applicable for EBS products

ü  Price Hold – keep track of the negotiated rates and use their benefits

ü  Product scope – check unsupported licences

ü  Metrics Definitions – although these are included in the LDR (license and definitions rules) of the OLSAs/OMAs, they can also be included in the ODs

ü  Converted/replaced/omitted licences – in conjunction with ULAs

ü  Master agreements – usually their clauses prevail over the local ones


Recommendations

q  Allocate sufficient time for record keeping;

q  Set periodical internal assessments/Set up a SAM program that takes

permanent control over the software lifecycle;

q  Make decisions only after being fully aware of your effective license position;

q  Build long term relationships with the vendor;

q  Understand the NOW to be prepared for the future;

q  Keep informed: inside and outside your organization.


Thank you!

E: [email protected] T: +44 (0)8704 050509

W: www.itamsolutions.com

Q&A


Piaras MacDonnell Suredatum

Oracle ULA’s Tips for a

successful exit


What is an Oracle ULA

Single Up-front Fee & Fixed Support

Many license for specific product

Document what’s used at the end Fixed Timeframe

Oracle Unlimited License

Agreement


ULA Exit Tip #1

Start Early!


ULA Exit Tip #2

Plan for Success


ULA Exit Tip #3

What Get’s Measured..….

•  Cost Per Core per product •  Number of Cores per product

•  Cost of Compliance Risk


ULA Exit Tip #4

Use Virtualization to your advantage


ULA Exit Tip #5

Something old, something new…..


ULA Exit Tip #6

Actively manage products NOT covered by ULA


ULA Exit Tip #7

Get License Advice


ULA Exit Tip #8

Price Holds & Strategic Purchases


ULA Exit Tip #9

Manage Account Managers expectations


ULA Exit Tip #10

Prepare to Defend Certification


ULA Exit Tip #11

Prepare to wait for official sign off


ULA Exit Tip #12

Harvest what you have sown


Top 3 - Takeaway

1. Start Early

2. Use virtualization rules to your advantage

3. Get license advice


Wrap-up

Breakout session this afternoon

[email protected]

@PiarasMacDonnel #ITAM Tips

Thank you


Refreshment Break


Round Table Bonus Tips


ULA Exit Tip #13

Awareness Campaign (without the words ULA)


ULA Exit Tip #14

Know your true breakeven Point

Cos

t per

cor

e

ULA Signed

B/E

Time


Typical Oracle ULA Life cycle

Prepare Negotiate 24 6

ULA Signed

12 Certify BAU

Initial Review

Price Hold

Accept Cert

Review or

Audit

Deploy Certify Measure

36

Defend


Oracle License Audit:

Are you ready?


Introduction


Agenda

-  Common misunderstandings and issues ….. -  What is an Oracle Audit?

-  Start -  Execution -  Closure

-  Under an Oracle Audit?

-  Things to consider…. -  Tips & Tricks

-  Best solution to tackle an Oracle Audit?


Common misunderstandings & issues…

-  Not cooperating or delaying an Oracle audit is ok !?

-  COLS Business Review ≠ Oracle License Review ≠ Oracle Audit !? -  End –users being re-active in terms of managing Oracle licenses and becoming (too late) active/pro-active’ at the start of an audit. -  We are now using an Oracle Verified Tool, so we have full control !?

-  It’s all in the details:

-  No clarity on the real license entitlements

-  No clarity on the real license deployment and (licensable) usage


What is an Oracle Audit?


Start of an Oracle Audit



A closer look at Oracle’s Standard Audit Clause: Upon 45 days written notice, Oracle may audit your use of the programs. You agree to cooperate with Oracle’s audit and provide reasonable assistance and access to information. You agree to pay within 30 days of written notification any fees applicable to your use of the programs in excess of your license rights. If you do not pay, Oracle can end your technical support, licenses and/or this agreement. You agree that Oracle shall not be responsible for any of your costs incurred in cooperating with the audit.



-  Oracle License Management Services (LMS) -  Organizations are selected for an audit by either:

Oracle LMS Oracle Sales

-  License Compliance Risk analysis includes multiple parameters (e.g. historical metrics, purchase date, mergers/acquisitions etc.)



-  “Notification Letter” to your CIO and/or CFO.

-  Oracle License Review = Oracle License Audit! -  Objective to determine compliance issues ($) and cross/upsell opportunities ($) -  Single Point of Contact

-  Kick Off Meeting / Call


Execution of an Oracle Audit

Product Scope: - Oracle Database, Database Options, Database Mgmt Packs - Oracle Application Server - Oracle Weblogic Server - Oracle SOA Suite - Oracle JD Edwards - Oracle Siebel - Oracle E-Business Suite - Oracle PeopleSoft

Note: Other products can be included, but are typically not included.

Legal Entity Scope: - Which legal entities are included in the scope of the audit



License Inventory

._ Oracle software programs

._ Order Nr’s/Order Dates

._ Support Start Date, End Date

._ License Metric

._ License Level

._ License Status

._ other



License Inventory

OF OLSA

SR

SP1 PD10g BP

SR SR

SP2 PD11g BP

SR SR

Time



Hardware Discovery 1

License Inventory

._ Oracle Server Worksheet (*.xls) ._ CPU queries (OS Commands) ._ Screenshot of Virtual (VMware) Infrastructure Client




Software Inventory 2

License Inventory

._ Oracle Fingerprints .- Oracle Discovery Tool (OMT)





Software Configuration 3

License Inventory

Oracle Product Specific Queries: - Review Lite (Database, DB Options, DB Packs) - FMW Script (Weblogic, OAS) - Siebel Extraction Scripts (Siebel) - Audit Trail (E-Business Suite) - Remote Review Tool (JD Edwards)






Usage Determination 4

License Inventory

Oracle Product Specific Queries: ._ Application Record Form (Database & Middleware) ._ Siebel Usage Tracking feature (Siebel) ._ Usage Based.sql (E-Business Suite)







License Inventory

Non-system data 5

Other items: .- company file .- hosting or not? .- $ metrics .- geographical .- etc.







Contract

Analysis

Non-system data 5

Manual Data Gathering & Analysis

T o o l i n g / s c r i p t s


Closure of an Oracle Audit

-  Oracle LMS - Final Report

-  Oracle Compliance Policy (30 days policy) -  Back Support Fees

-  Oracle Sales - Commercial Resolution Full details of Oracle’s Compliance Policy can be found through: http://www.oracle.com/us/corporate/license-management-services/policy/index.html


Why you should care, the cost of even one PROC out of compliance?

Example: End-user has 2 Processor licenses Oracle Database Enterprise Edition but is found to make use of 3 Processor licenses Oracle Database Enterprise Edition for a period of 6 years: List License: $ 47,500 List Support: $ 10,450 Standard Discount: 10% Net License: $ 42,750 Net Support: $ 9,405 Back Support ( 6 years) 6 years x $ 9,405 = $ 56,430 Total Fees: $42,750 + $9,405 + $56,430 = $108,585


Under Audit? Things to consider..



-  IRM involvement (sensitive, confidential data)?

-  Can data gathered leave your premises?

-  Which results are shared when, and with whom from Oracle Sales?

-  What is the performance impact of the Oracle Audit tools proposed?



-  Make sure that you understand before the data is collected:

-  Why is this data collected?

-  What data will be collected?

-  Where is this data collected from?

-  How will this data be used?



-  Enforce you know what will happen with the data before you share it:

-  What will Oracle do with the data collected?

-  Where will Oracle store the data collected?

-  Who can access the data collected by Oracle?


Under Audit? Tips & Tricks..

What to do to let things run smooth?

-  Quick Risk Assessment -  Share and manage the expectations towards C-level

-  Internal Governance, Communication and Escalation Model -  Oracle Project Team

-  SPOC (Project Manager) -  Legal, Purchasing/Vendor Management, IT Depts, Outsourcer

-  Steering Committee -  C-level / Members of the Board

-  Data sharing within your company; (leaking results externally)

-  Do your own research before ( and during) the audit(!)


Best Solution to tackle an Oracle Audit?

Be pro-active and take the control yourself, and don’t wait until you get audited by Oracle!

How?

Perform regular internal license reviews;

determine your license compliance position and mitigate financial, operational and legal risks.


Some take aways…..

Make sofware license management a priority at C-level and budget for the proper software license management practice, tailored to the specific needs of your organisation . Create an internal software license management team of multiple disciplines (procurement, legal, DBA, Infrastructure Managers, Business Application Mangers, Outsourcers) with C-level sponsorship and review on a regular basis: -  your real license entitlements (incl OD, OLSA, SR, SP, PD, BP)

-  your real deployment and (licensable) usage of the software

-  reconcile your license entitlements with your license deployment and usage in order to identify and adress software license compliance issues proactively!


Further reading on www.b-lay.com

1.  Oracle License Review or License Audit Answers to your Top 20 Questions

2. Oracle: Your quick Oracle Licensing Guide.

3. Oracle ULA: An overview of the major risks you should be aware of.

4. Oracle Pool of Funds: An overview of the ins & outs of this type of agreement

5. Oracle E-Businesss Suite: An overview of common license compliance issues


Questions ?

B.Lay – The License Management Company [email protected]

T: +31 (0) 8 80 23 3702 M: +31 (0) 6 10 40 6619 W: www.b-lay.com L: nl.linkedin.com/pub/richard-spithoven

PLEASE INSERT CLASSIFICATION HERE

TAKING THE BITE OUT OF SOFTWARE LICENSING TERMS

Global Business Services

ITAM Review Oracle Seminar, London 21st Nov 2014 Kamal Patheja, Legal Director, Global Software Licensing Cathy Hamilton, Head of Group License Demand


69

Agenda

1.  Introduction

2.  Collaboration between commercial, legal and software asset management teams

3.  Approach to negotiating software license agreements


INTRODUCTION


71

Deutsche Post DHL Facts & Figures

Company Deutsche Post DHL (DPAG) Bonn, Germany The integrated Deutsche Post and DHL brands offer comprehensive services in international express, air and ocean freight, road and rail transportation and contract logistics. Deutsche Post is Germany’s only universal provider of postal services and delivers mail and parcel in Germany and the world. •  National and international mail and parcel services •  Dialog Marketing Services, Outsourcing and System Solutions (Germany) •  International Express •  Air Fright, Ocean Freight, European Road Freight •  Contract Logistics Approx. 480,000 55.1B EUR*, spans 220+ Countries and territories

HQ

Profile

Services

Employees

All as of 03.2012 apart from (*) representing 2013 Fiscal Year

Revenue


72

“The postal service for Germany”

The ‘DPDHL house’

International and Domestic Express

Global Air, Ocean and Road Freight

Global Supply Chain Solutions

Corporate Center and core Business

Services

Domestic Germany Post – eCommerce

– Parcel (PeP)

“The logistics company for the world”


73

Global Business Service (GBS) division of Deutsche Post DHL (DPDHL) provides services to the Group`s business units from a single source to increase efficiency through scale, boost service quality and reduce costs.

IT Services, as part of GBS, provides the Group with specialized IT Build services and industrialized IT Run services at a quality and price level competitive with the market while retaining proprietary information and knowledge within the Group.

IT Services leverages a multinational workforce of skilled IT professionals with an intimate knowledge of logistics industry and IT to reinforce the Group`s position as the global market leader in the logistics sector.

GBS – IT Services

Source: DPDHL Intranet

Supply Chain

Global Forwar-

ding Freight

Deutsche Post DHL

Global Business Service (GBS)

Express

Customer Solutions & Innovation

PeP

Corporate Centers (CC)

Service Lines GBS

Claims Management Inhouse Consulting

Procurement Innovation Management

Real Estate Insurance & Risk Management

Fleet Management IT GBS & Corporate Center

Finance Operations IT Services

HR Operations Legal Services


74

Tempe, (Data Center) Cyberjaya (Data Center) Darmstadt

Bonn Prague (Data Center)

IT Services: Core Locations

Mechanicsburg, (Data Center)


SOFTWARE ASSET MANAGEMENT AT DPDHL


76

Key Figures on DPDHL License Management

•  400 data feeds / interfaces many of which run weekly

•  300-400 file uploads every month

•  125,000 effective license records

•  2,600 maintenance records

•  20 million software records processed monthly

•  400 users •  30 application roles •  1,100 profiles

•  33,000 license records processed annually

•  DPDHL divisions •  198 countries •  1,000 legal entities

•  11,000 reporting units

License balances top vendors on target – continuous improvement in operations

•  180k + active devices •  180k + active users •  Highly federated

IT infrastructure •  1.000+ virtual environments

•  100+ Active Directories


77

Cost & Risk Control,

Automation

Maturity and Business as

Usual

Vision

2010

2010-2012

2013 - 2014

Time

ü  Onboard SAM team ü  Database of maintenance

contracts ü  Implement investment controls for

all software spend ü  Identify major risks ü  Centralized purchasing ü  Tool identification

ü  Request Management ü  Develop Licensing Expertise ü  Global Contact Management

(Maintenance & License Agreements) ü  SAM Awareness ü  Process Implementation ü  Technical Discovery

ü  Demand bundling ü  Global risk management ü  Automated technical discovery ü  Vendor certification of processes

& tools ü  Expand license capability to

cloud ü  Next strategy S-curve eg

metering

Mat

urity

2009 - Mar

Transparency, & Capability

Software Asset Management Journey


78

Collaboration in Software Contracting

•  Contract standards

•  Legal risks

•  Legal advise

•  Compliance

•  License entitlements & deployment

•  License Orders

•  Sourcing process

•  Commercial terms Procurement License

Operations

Legal License Demand

Management •  Group license

demand •  Contract terms •  License models •  Cost savings & risk

controls


CONTRACTING APPROACH


80

Approach

i.  Understand planned software usage and how technical roadmap may impact on licensing requirements

ii.  Understand planned organizational changes & strategy

iii. Ensure all agreements made during commercial negotiations have been captured in Draft Agreement*

iv. Ensure that the Draft Agreement contains no usage limitations or other restrictions that have not been agreed in commercial negotiations

v.  Review & prioritize required terms based on requirements (cost, risk, criticality)

Vendor Negotiations

Usage requirements &

future plans

Vendor Template

DPDHL Standard

Terms

*particularly in the case of deviations from standard vendor policies or processes


81

• Group/Business Division/Local Entity • Geography • Users • Employees (clarify employing entity) • Developers • Customers • Agents • Sub contractors • Consultants

Who will use the software?

• Test, Development, Production, backup/archival, • Disaster Recovery • Number of days testing required • Hot/cold/warm back up

• Server type • Operating System • Back up or test copies

Technical Requirements

• Potential Divestment/Acquisition • Outsourcing/Insourcing Plans • Potential Relocation or Consolidation of Data Centres

Organization Strategy & Plans

Usage Requirements & Organizational Changes


82

DHL Standard Terms

Technical Environment

Third Party IPR

Indemnity

User Group Divestment

License Grant Outsourcing

Disaster Recovery Assignment

Vendor Policies

Governing Law

Upgrades

Warranty

Support Termination

Legal Jurisdiction

Support Volume

Adjustment

Audit Rights Off shore 3rd Party Usage

Website Terms

Embargoed Countries

Embargoed Countries

Exit Terms


83

DHL Standard Terms

§  Named User Licences

§  Data Protection restrictions

§  Contractors/outsourcers/other users/

§  Indirect access via devices

User Group


84

DHL Standard Terms

§  Divisional Usage plan §  Limitation to specific user groups/

divisions §  Access by customer base §  Production/test/development §  Perpetual/term

Licence Grant


85

§  Technical Support Policy §  Updating of policies post

contract §  Addition of new policies E.g. Virtualisation Policy

DHL Standard Terms

Vendor Policies


86

DHL Standard Terms

§  Right of use to licenses for purchaser

§  Minimum 12 month transition period

§  No requirement for consent

Divest-ment


87

DHL Standard Terms

§  Audit process defined in contract §  “Black out” period §  Scope and frequency §  Define pricing model for license

shortfalls - contractual not list §  Escalation procedure

Audit Rights


88

Vendor Template – Potential Risks and Issues*

Examples •  limitations such as

“employee only” •  use prohibited for

Contractors, Agents, 3rd Party Developers, Outsourcers, etc.

Third Party Usage

Examples •  limitations to legal entity,

location, business unit, server, server type, operating system, region, etc.

Limitations to Usage

Examples •  limit changes to scope of

future support renewals •  allow vendor to re-price

support if volumes are reduced

Partial Termination of Support

1. Highlight problematic restrictions

2. Identify acceptable alternative terms

3. Prioritize issues

*Examples only– not intended as an exhaustive list


89

........& Start Negotiations


QUESTIONS?


Lunch

Followed by workshops this afternoon

Oracle Seminar, 21st November, London #ITAMROracle @itamreview Platinum Sponsor Platinum Sponsor

Progress to date:

1. Worldwide Survey 2. Roundtable at Home Office 3. Met with Oracle LMS in Reading 4. Report published November 5.  IT Press coverage (Strengths and Weaknesses)

Campaign / Oracle Progress


Your help please


Q1

Campaign for Clear Licensing (CCL) research suggests that organizations find Oracle audit requests unclear and difficult to respond to (88% disagreed or strongly disagreed that Oracle audit requests are clear and easy to respond to). What can Oracle do to clarify the audit process?


Q2

CCL Research suggests Oracle LMS are not very helpful during the audit, contract renewal and negotiation process (only 22% agreed Oracle LMS were helpful) How could Oracle LMS improve their support to customers?


Q3

CCL Research suggests that an overwhelming 92% disagreed or strongly disagreed that communication from Oracle had been clear and straightforward. What steps could Oracle take to improve communications?


Q4

CCL has developed an Audit Code of Conduct to provide more clarity around the audit process (this includes sections on engagement, measurement criteria, sharing data, working with third parties, timing and audit results) What steps could CCL take to allow you to use this code during the contract renewal process?


Q5

CCL has suggested seven areas for improvement. Please rate them in order or priority: Please mark box with 1 – 10 whereby 1 is low priority and 10 is high priority.

1.  One voice please 2.  Knowledgebase 3.  Communicate 4.  Re-Engineer Risk 5.  SAM Evangelism 6.  Audit Clarity 7.  Strategic Focus


And finally….

Any other feedback you wish to share?


•  We will add findings from today (DECEMBER) •  Seek Direct Feedback and timelines from Oracle on our suggestions (DEC/

JAN)

•  OPTIONS –  Write open letter to UK/EU/USA on sales practices - measurement

criteria are not clear –  Provide assistance to UK/USA/EU governments on Oracle procurement

best practice –  Competitive analysis – alternatives to Oracle, deployment best practices –  Increase our finance, procurement and legal connections and escalation

paths

What else?

Next Steps…


Thank You

ITAM Review Oracle Seminar

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Transcript of ITAM Review Oracle Seminar