Oracle customers fear Oracle’s reaction if they use Amazon’s or Microsoft’s cloud, survey shows (ORCL, AMZN, MSFT)

Oracle customers fear Oracle’s reaction if they use Amazon’s or Microsoft’s cloud, survey shows (ORCL, AMZN, MSFT)

Large enterprises that use Oracle software know they want to move that software to the cloud but have some fears about Oracle’s reaction if they don’t choose its cloud, according to a new survey of 300 IT professionals.

The survey was done by Apps Associates, an IT services company whose claim to fame is helping enterprises move their Oracle apps to Amazon’s cloud, Amazon Web Services. Apps Associates is both a top-tier Oracle partner and an AWS partner. (It’s also a Salesforce partner.)

The firm talked to 300 IT professionals at large companies (those with annual revenue between $100 million and $5 billion) that still use Oracle applications that are not hosted in the cloud.

Two-thirds (59%) said they are planning to move these apps to the cloud this year and nearly one-third (32%) said they felt that they should have done so already. Only about 7% said they needed to move the apps but haven’t started planning.

There are good reasons for companies to move slowly when they’re shifting these systems to the cloud. Companies run their businesses on Oracle databases and they worry about everything from downtime to lost data to opening themselves up to hackers.

But the top concern companies had for dragging their feet, according to the survey, was a fear that if they chose an Oracle competitor like Amazon’s AWS to be their cloud provider, they would trigger “an audit” from Oracle.

The dreaded audit is when Oracle examines how a company is using its software. If Oracle finds that the company has violated its software license contract, Oracle can slam its customer with big fees and other threats, like terminating permission to use its software.

And the terms in Oracle’s contract, like other big enterprise vendors, are notoriously complicated. In fact, there’s an entire consulting industry called software asset management that helps companies negotiate software contracts and fight audits and audit fees from Oracle and others (including Microsoft, SAP, IBM).

Larry Ellison watches the match between Milos Raonic of Canada and Sam Querrey of the United States during the BNP Paribas Open at the Indian Wells Tennis Garden on March 16, 2018 in Indian Wells, California.
Harry How/Getty Images

Two-thirds worry about Oracle gotchas

Companies are racing to use the cloud for as much of their IT as they can these days and Oracle has been talking up its own cloud as both the future of the company and the nemesis of AWS.

Amazon has been deliberately targeting Oracle’s customers trying to woo them to its own cloud. It has particularly been trying to get them to bring their Oracle apps and ditch their Oracle database to use Amazon versions instead.

But Oracle’s cloud is far behind Amazon’s and Microsoft’s in terms of market share and the features supported, market researchers say, making many companies prefer competitors to Oracle’s cloud.

Still, before Oracle began to view Amazon as a threat, Oracle partnered with Amazon. It authorized Amazon’s cloud to sell some versions of its Oracle database as well as a few of its other, older apps.

More importantly, it also allows Oracle customers to move their existing Oracle apps, databases and data into Amazon’s cloud in an Oracle program called Bring Your Own License (BYOL). Oracle does the same for Microsoft Azure. Azure is also authorized to run Oracle apps under the BYOL.

Even so, in this survey, 58% said they were very or somewhat worried that their licenses will not remain valid if they moved to a non-Oracle cloud.

More than half of ITDMs (55%) worried that moving to a non-Oracle cloud would increase their chances of an audit. Nearly half worried that if they moved to the cloud, Oracle will no longer provide technical support to the them. Tech support typically includes troubleshooting when things go wrong and providing updates and security bug fixes.

This even though Oracle confirmed in January 2017 that both AWS and Microsoft are “authorized” clouds for its apps.

So Apps Associates points out that despite any pressure Oracle customers may feel about having to use Oracle’s cloud, it isn’t wholly true that they can’t use their Oracle software with AWS.

But there’s a big caveat: there may be hidden terms in their Oracle contract that would allow Oracle to audit them.

Apps Associates advises customers to pore over the contract and find out the gotchas when using a rival’s cloud.

Of course, that’s easier said than done.

Oracle AWS campaign may be a “trap”

One of the most famous Oracle software asset management consultants says Oracle deliberately makes its contracts vague and difficult which gives it the upper hand.

Craig Guarente, CEO, Palisade Compliance
Craig Guarente

Craig Guarente, CEO of Palisade Compliance used to be an Oracle exec who conducted audits and now makes his living helping Oracle customers defend themselves against them.

Oracle has recently launched a campaign promising to cut customers’ bills in half i f they switch from AWS to Oracle’s cloud.

But Guarente calls the campaign a “trap,” he wrote in a recent blog post.

He says that Oracle may use the offer to examine how they’ve been using Oracle on AWS’s cloud under the BYOL.

“Since Oracle contracts are so unclear, you are basically giving Oracle sales the opportunity to scare you into thinking you may have a compliance issue,” Guarente says. On top of that, Oracle may also charge its customers new fees if they move to Oracle’s cloud.

To judge by Guarente’s comments at least, Oracle customers are not misguided in worrying about Oracle’s reaction if they move to AWS or Azure. But that doesn’t mean it can’t be done.

Oracle did not immediately respond to a request for comment.

Are you an Oracle insider with insight on the company’s cloud transformation to share? We want to hear it, or Julie Bort on Twitter (@Julie188)

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