Oracle continues to see its traditional software revenues decline while it races to move its customers to the cloud. But it may have a plan to shore up those shrinking revenues.
The company is ramping up software audits involving its Java software, reports The Register’s Gavin Clarke. Audits are when a software company investigates customers it suspects of not properly paying for their software usage.
In this case however, companies may be shocked to learn that they owe Oracle anything for using Java because Java software is widely believed to be free to use.
And people think that it’s free because part of it is free.
At issue, reports Clarke, is a hugely popular version of Java called Java Standard Edition (or Java SE), that anyone can download from the Oracle website.
One unnamed retailer that underwent an audit on Java was issued a $100,000 bill, negotiated down to $30,000, The Register reports. And this could be only the beginning. Sources told Clarke that Oracle has hired 20 Java specialists for its Licence Management Services (LMS) department, the ones who do the audits.
More to come in 2017
Java is a programming language and platform for running the apps created in the language. If you simply want to write a Java app, there’s no charge to do that. But if you need to install that app on hundreds of the company’s Windows desktops so that employees can use it, that would require using a part of Java called the Microsoft Windows Installer Enterprise JRE Installer. That installer software is not free to use.
There are other parts of Java that are not free to use either, as well as other editions of Java that are not free. The fees
Oracle charges range from $40 to $300 per user, or from $5,000 to $15,000 per processor on the computer running the software, Clarke reports.
Another reason these customers may be surprised is that Oracle hasn’t been particularly aggressive in auditing Java SE users since Oracle acquired Java’s creator, Sun Microsystems, in 2010.
So for six years, many companies haven’t been asked to pay up.
Oracle isn’t alone in using audits. It’s a common tactic used by all the giant enterprise software companies (Oracle, IBM, SAP, Microsoft). They have complex legal rules for how customers pay for software, using a variety of metrics such as how many people are using the software and which features of the software are being used.
It’s so easy for a companies to misunderstand the rules, there’s an entire industry, called software asset management, to help them navigate licensing contracts and audits.
‘Hostile database vendors’
As we previously reported back in 2015, customers told Business Insider that Oracle was ramping up audits of them. One customer told us it felt Oracle had asked for an audit as a tactic to pressure the customer into buying Oracle’s cloud product.
Tactics like this are what has given the company a reputation for being hard to work with, and this is something that Oracle’s new arch enemy, Amazon Web Services CEO Andy Jassy, loves to bring up when slamming Oracle.
At AWS’s big customer conference last month, Jassy talked about cloud computing as if it were a superhero. He said that one of its powers was the “super power of flight” which meant, “the freedom to unshackle from hostile database vendors.” This was one in a long list of slams he made toward Oracle.
Oracle could not be reached for comment and did not comment on the The Register’s article.
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.
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