Users, analysts condemn Oracle's changed licensing tactics

User groups and analysts banded together this week to condemn Oracle's "aggressive" sales tactics which could increase licensing fees five-fold.

Australian users are at the forefront of the attack, criticising the database giant for pressuring customers to switch from user-based pricing to more expensive processor-based licensing.

Both Gartner and Meta Group have accused Oracle of trying to compensate for weak database sales by lifting revenues through "extraneous licensing fees".

According to Gartner, Oracle's use of aggressive sales tactics is not unprecedented but it is affecting the vendor's credibility and dwindling revenue.

Meta Group has received a "flurry of calls from irate customers" claiming they are being pressured to switch pricing but saying the plan could increase costs five-fold.

Meta Group program director Dr Kevin McIsaac said users in the US are receiving cold calls from Oracle sales representatives advising them they need to pay more.

McIsaac said the calls have emerged in the last six weeks and predicts it's an attempt to get revenue ahead of the end of the financial quarter.

McIsaac issued a warning to Australian enterprise to look-out for such sales tactics and to also be aware of the definition of the term "multiplexing" in licensing policies.

Meta Group said Oracle's sales team has been attempting to extend the definition of the term "multiplexing" to cover batch feeds from non-Oracle applications.

Gartner research director Greta James also warns local customers to be alert for sales practices and both analysts are urging users to pursue legal action to defend existing licensing arrangements.

The vendor has been auditing customers using Oracle data warehousing as a front-end for batch-processing feeds, and, in some cases, told to switch from named user pricing to per-processor pricing to cover additional costs.

Gartner said Oracle is limiting customers' purchasing options, forcing them to pick the most costly option between named-user and processor-based pricing.

Oracle has also attempted to "pre-sell far more licences than the customer will ever use in the form of a five-to-seven-year enterprise licence agreement with thousands of named users or processors."

"Oracle tries to have enterprise pay extra fees for data sourced for an Oracle database into a data warehouse. In some instances Oracle sales staff claim that non-Oracle data warehouses must be licensed, regardless of whether the target database is theirs or not," the Gartner report said.

The database giant has responded to the claims charging it is refers to a "handful of misunderstandings about its licensing policy".

Customers, Oracle said, will be "grandfathered in" and not asked for more money.

"Oracle management does not condone or encourage the type of sales force behaviour mentioned in analyst reports," Oracle executive vice president of North American sales, George Roberts, said. "If a customer has an issue with a sales proposal, Oracle has always encouraged customers to get in contact with a senior Oracle sales executive."

Australian Oracle User Group president for Victoria Martin Coyle is not surprised by the furore. "Oracle's share price has been under pressure like most tech stocks so there has been pressure to get every dollar it can." While Oracle often meets customer resistance to pricing models, Coyle said Oracle is always willing to negotiate.

Gartner researcher Greta James said users should ask Oracle for two pricing proposals based on both licensing methods to ensure they are receiving the lowest quote and enterprise should seek legal advice. w* Concerned about vendor's changing licensing policies? E-mails to

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