Oracle blasted for 'blood-boiling' new licensing clause

Customers forced to pay up or ditch Oracle within 30 days, reseller claims

Oracle has been accused of holding customers to ransom with a "blood-boiling" new clause contained in its licence agreement.

According to one reseller, Oracle has "very recently" introduced a clause which states that if customers fall short on a licence audit, they are expected to either pay up or stop using the products – all within 30-days of being notified.

"It is shocking," said Anne Stokes, chief executive of Streamwire, which has recently partnered with Oracle rival TmaxSoft. "In 30 days you can just about get someone to sign your holiday sheet or get your expenses signed off. It is very, very aggressive. We're only voicing what the poor consumers are actually saying."

According to an Oracle contract available online, the clause states:

"If you breach the terms of this agreement and fail to correct the breach within 30 days after Oracle notifies you in writing, Oracle may end this agreement and your use of programs and/or services ordered.

"If Oracle ends this agreement as specified in the preceding sentence, you must pay within 30 days all amounts which have accrued prior to the end of this agreement, as well as all sums remaining unpaid for programs ordered and/or services received under this agreement. You agree that if you are in default under this agreement, you may not use those programs and/or services ordered."

Stokes claims that because Oracle is such a popular vendor, it knows customers will be unlikely to be able to cease using it, so will be forced to pay up.

"It's not one of these systems where you can have an elegant exit," she said. "Oracle is a complex system and it gets embedded into the business. That's the problem: because they are embedded into the business, they are safe and nobody will ever walk away. "

She has recently begun working with Oracle rival TmaxSoft, which she said is a far superior company in terms of product and customer service.

"Until recently, the risk associated with moving away from Oracle to another software was seen as being quite difficult and high risk," she said. "But TmaxSoft and [its product] Tibero changes it and puts it on its head. You don't have to be held to ransom anymore. The financial benefits of moving away – and the relationship benefits, let's not forget you're working with an organisation with a David and Goliath scenario – are great. Oracle has got too big and it needs to remember its customers."

Oracle has regularly come under fire from those in the industry for its aggressive stance on licensing. UK body the Campaign for Clear Licensing has been an outspoken critic, and its founder Martin Thompson said the new 30-day clause does not come as a surprise.

"I would say this is desperate times for desperate measures," he said. "If you listen to their latest earnings calls, they are desperate to be cloud-centric and they are desperate for growth and they are not getting that from licensing. The cloud business is only five per cent of their business and that is what the stock market wants to see [grow].

"I can't verify this but I've heard that 50 per cent of UK Oracle database spend came from audits so audits are a massive part of their revenue. They are becoming increasingly more desperate so it is one more reason to not use Oracle and to find another provider.

"Something in me says they do this from a PR perspective for the exposure – it is ludicrous and it is just bully tactics."

Oracle was not immediately available to comment.