To Larry Ellison and the board of directors at Oracle,
We at the Campaign for Clear Licensing, a not-for-profit organisation campaigning for the rights of business software buyers, urge you to take steps to improve the trust of your customers and address concerns over vendor lock-in if you wish to succeed in migrating them to your cloud computing services.
You must be commended for growing your cloud business by 45% in the last quarter, and clearly Wall Street is impressed with this progress. However, with just 5% of your revenue deriving from cloud services you have a long way to go before cloud becomes a major part of your business, and we believe there are significant challenges to overcome along the way. Not least of all is overcoming the deep-rooted mistrust of your core customer base as a result of your auditing and licensing practices. We fear that if Oracle does not address these concerns then the company’s ability to meet its stated $1 billion cloud sales target next year, together with the longer term outlook for its cloud computing business, will remain in doubt.
In November 2014 we published a report which examined the experiences of over 100 of your customers around the world. Among the key issues we found were:
- Oracle’s audit requests are often unclear and difficult to respond to
- Oracle’s own LMS is largely unhelpful to customers during an audit
- Oracle’s licensing changes are often poorly communicated (to the extent that in some instances Oracle’s own sales teams and LMS are often found to be working with out-of-date licensing information)
- Oracle routinely moves the licensing goals posts to favour revenue streams over customer requirements
Together these issues have resulted in customer relationships that are predominantly hostile and filled with deep-rooted mistrust, particularly when it comes to licensing and audits. We strongly believe that failing to address these concerns will hamper Oracle’s ability to persuade its customers to adopt its cloud computing services, as most are concerned that cloud computing services will lock them into Oracle even more than they already are.
But there is time to change, and we applaud the levels of engagement we have already received from Oracle and in particular members of LMS who wish to address these already well-known issues. We are writing this letter to further increase this engagement so that real change can be achieved to everyone’s benefit.
We have already asked your customers for positive and constructive ways for how Oracle can improve its audit processes and communications around software license changes in order to improve customer trust. Here are the seven changes that your customers would like to see, as prioritised by them:
- Strategic Focus – Customer satisfaction, relationship strength and strategic value should replace audit revenue as a key performance indicator.
- Audit Clarity – Oracle needs to be crystal clear with audit activity and adopt the Campaign for Clear Licensing code of conduct
- One voice please – Organisations want clarity over Oracle license management from one voice. They don’t want to be passed around between departments who don’t communicate with each other.
- Knowledgebase – Oracle needs to invest in a well-organized knowledgebase to educate its customers
- Re-engineer risk – As more organisations mature in their governance processes, more will shy away from Oracle as an unnecessary burden to manage. Oracle needs to engineer its products and license programs to reduce unnecessary risk. The focus of control needs to be placed in the hands of the business not developers.
- Software Asset Management Evangelism – Oracle needs to help educate its customers to assign appropriate resource for managing software and proactively assist with licensing training and management practices around Oracle software.
- Communicate – Oracle is not being invited to participate in key business conversations because of mistrust. Oracle needs to step up conversations and provide clarity to regain trust.
We understand that these changes will not happen overnight but we hope that they will guide meaningful change. The Campaign for Clear Licensing is a pro-software organisation. We love software and the way it enriches people’s lives, and Oracle can be proud of its contribution to the modern world. But for the sake of the company’s long-term future and the success of its cloud computing services, we urge you to review these recommendations that have been validated by your customers.
The Campaign for Clear Licensing