Oracle Audit Defense: Strategies to Overcome Audits

As an Oracle customer, you want a customized solution which is compliant, secure, and consistently supporting your organization’s needs. Unfortunately, Oracle audits can disrupt those plans. If you’re non-compliant, then Oracle could force you to pay costly fines, migrate to new infrastructure, and change your configurations to meet their demands. Planning ahead and consulting third-party Oracle experts can help you stand your ground and stay compliant while maintaining business continuity. This article discusses how to prepare an Oracle audit defense strategy and the best practices to follow.

What is an Oracle audit defense strategy?

An Oracle audit defense strategy is a calculated approach to responding to a formal audit request from Oracle. It helps you prepare for an audit, navigate the process with guidance and support, and minimize the risk of non-compliance with Oracle’s licensing policies.

Oracle has the right to audit your use of its services no more than once every 12 months. Within 45 days of sending a written notice, Oracle may audit your use of its cloud services, operating systems, and integrated software. You must comply with this request and provide reasonable assistance so they can access your information.

What happens if you don’t comply?

If you fail to comply with the auditing process, address non-compliance, or pay any applicable fees, then Oracle may end your:

• Service offerings and technical support
• Licenses
• Master Agreement

Oracle is also not responsible for any losses you may incur as a result of them ending your service offerings, licenses, and Master Agreement.

What are the benefits of third-party assistance?

Hiring a team of Oracle experts can help you navigate the complexities of Oracle’s auditing procedures. They can help you understand:

• The status of your current licenses
• Your rights and obligations under your existing agreement
• Any potential non-compliant events that Oracle may flag

They can also serve as the main point of contact during the auditing process. Having a sole contact saves you time and hassle and gives you the assurance that Oracle is getting only the information it needs to complete the audit. Any additional information that Oracle acquires may be used against you to enforce penalties and costly service upgrades.

What can trigger an audit from Oracle?

Oracle may initiate a full audit if they suspect your licenses are non-compliant or misused. How does Oracle know who to pick? One common tactic is for your Oracle account manager to perform a soft audit, where they inquire about your services. While innocent on the surface, Oracle may actually be building a case to initiate a full audit.

Below are other events that may trigger an audit from Oracle.

Stagnant Oracle licensing

Oracle may conduct an audit if they discover your licenses, upgrades, or certifications are out of date. Refusing to renew your unlimited license agreement (ULA) may also trigger an audit. Furthermore, continuing to use unsupported programs may prevent you from being able to receive updates and technical support services.

Growth without new licenses

If your business is growing but your Oracle licensing agreements have stayed the same, then Oracle may investigate why. This is because Oracle expects you to upscale their services as your organization’s size and needs grow.

Mergers and acquisitions

Although merger and acquisition (M&A) activity halved between 2021-23, mid-market deals remained strong due to being smaller and easier to manage. Additionally, Oracle earned $13.8 billion in revenue in 2023, with $4.4 billion coming from its Cloud Revenue (up 54% in USD). To protect its cloud revenue, Oracle uses highly publicized events like M&As to target organizations for non-compliance — forcing them to pay fines and migrate to Oracle’s cloud services.

New hardware investments

Oracle uses processor-based metrics to license its databases and services. This means your licensing costs are tied directly to the number of physical CPU cores that run your Oracle services. Now, there’s a bit of math involved. Aside from counting the number of cores, you must also multiply that number by what Oracle calls a “Core Processor Licensing Factor.”

(Image Source)

Let’s say you have a multicore chip-based server with six cores, and it has a Core Processor Licensing Factor of 0.25. This means you’d need two processor licenses. Why? Because six multiplied by 0.25 equals 1.5, which becomes two after you round it up to the nearest whole number.

Shifts in usage patterns

Any changes to your usage patterns could trigger an audit. Oracle will be especially curious if you’ve recently canceled any services or reduced your technical support fees. Since these changes negatively impact Oracle’s bottom line, they’ll pursue other revenue-raising activities.

Announced IT changes

Have you announced any IT infrastructure changes? Publicly announcing plans to migrate to the cloud may raise Oracle’s interest. When migrating Oracle databases to the cloud, you can transfer your licenses and workloads with a bring your own license (BYOL) agreement. A BYOL lets you apply your existing on-premises software licenses to your new Oracle cloud environment unless launching a virtual machine (VM) instance on a shared host.

Why do you need an Oracle audit defense strategy?

Facing an Oracle audit can be stressful and time-consuming, but you don’t have to go it alone. By assembling a team of experts who can prepare and enact an Oracle audit defense strategy, you can anticipate and defend yourself against Oracle’s demands.

Here are the main benefits of an Oracle audit defense strategy.

Define audit scope

An advisor can help you define the scope of your Oracle audit. By reviewing your formal audit letter, they can determine the programs and services that Oracle will audit. They can also review your existing ULA terms to ensure the audit scope does not exceed your agreed terms. While you must comply reasonably with an Oracle audit, you don’t have to share everything. With a trusted advisor as your primary contact, they can prevent you and anyone else in your organization from accidentally oversharing with Oracle.

Interpret audit results

Whether you’re conducting a self-audit or awaiting official results, an advisor can help. They can explain the findings to you in clear, legible terms. And they can flag potentially incorrect non-compliance claims. Typically, you have only 30 days to resolve Oracle’s findings. Being able to interpret and action the findings quickly can be an advantage. You can use the extra time to perform internal audits and strategize remediation efforts.

Negotiate costs and discounts

Expert Oracle advisors have years of experience negotiating with Oracle LMS and the Oracle sales department. With their knowledge and insight, they can help reduce the number of fines and penalties you face. They may even be able to secure discounts for you. Are you being audited near the end of the fiscal year? If so, then Oracle may be keen to close a deal. An advisor can use this knowledge to their advantage to advocate on your behalf for a discount.

Reduce stress

Oracle audits can be exhausting, stressful, and time-consuming. Only 7% of compliance leaders who indicated regulatory change as a challenge are prepared to meet that challenge. This uncertainty fuels anxiety. An expert Oracle advisor can help you navigate the complexities of Oracle’s auditing procedures. This way, you and the rest of your organization can focus on your core duties without disrupting your daily operations.

Avoid costly mistakes

Failing to plan for and manage an Oracle audit can be a costly mistake. In fact, a recent report found that NASA overspent $15 million on Oracle software, out of fear that any penalties imposed by an Oracle audit would be more expensive. With an Oracle audit defense strategy, you can prepare for what’s to come and mitigate potential compliance headaches.

Ensure compliance

While full compliance should always be the goal, navigating Oracle’s ever-changing requirements can be demanding. Even if full compliance is not possible, an advisor can help you understand the severity of each non-compliant event, so you can allocate time and resources to resolving the most critical issues first.

What the Oracle audit process looks like

From afar, the Oracle license audit process can seem overwhelming.

To help you better understand the entire procedure, let’s break down each phase into easily manageable steps.

Step 1: Receive audit notification

Oracle typically starts by sending you a License Review request. If the letter references your agreement and Oracle’s right to review your services, you’re being audited. The letter should also roughly define the audit scope and suggest a possible time.

Step 2: Respond to notification

After receiving a formal audit letter, you have 45 days to acknowledge the request. During this time, you should assemble an audit team and review your existing licenses. Identify the type and amount of license you’ve purchased, including their purchase price and annual support fees. Evaluate your virtual environments as well, including their configurations and Oracle usage. Take note of any new features you may have unknowingly activated. In fact, you may have downloaded a patch or update that unknowingly activated a new feature by default without your knowledge.

Step 3: Negotiate audit terms

Next, validate Oracle’s right to audit the items they listed in their letter. To do this, have your advisor review your existing ULA terms and conditions. Keep in mind how they interact with your Oracle competitors’ products, too. If you find any discrepancies, renegotiate with Oracle for more favorable terms.

Step 4: Collect usage data

Now, the time has come to share relevant data with Oracle. Compile relevant information about how you deploy Oracle services within your organization. Common data points to collect include:

• Access logs
• Configuration settings
• Backup and restoration processes
• Disaster recovery processes
• M&A changes

Ensure that the data is accurate and relevant to the items that Oracle will audit.

Step 5: Submit and review data

Once you’ve collected all the necessary data, submit the data to Oracle for review. Depending on the audit scope, it could take Oracle several weeks or even months to review the data. Their findings will conclude whether your Oracle usage aligns with your licensing agreements.

Step 6: Finalize audit results

After receiving the final report, review the findings. The report should detail your compliance status, including any discrepancies with your usage and licensing. It should also provide instructions on how to address non-compliance and the penalties for failing to do so. Read more: Oracle Audits: Triggers, Considerations, and Tips

How an Oracle audit defense provider can assist you

Facing Oracle alone is a challenging prospect.

Here are six ways an Oracle audit defense provider can help you overcome the odds.

We analyze your pre-audit conditions

Our expert team can validate your existing licenses for compliance, using the same steps as Oracle LMS during an audit. We also identify license optimization opportunities and compliance recommendations, along with defense strategies against common items in Oracle audit reports.

We prepare you for the audit

We work closely with your organization to gather, compile, and verify all essential documentation and data. We identify the audit scripts that Oracle plans to use and, if necessary, perform internal audits to notify you of compliance gaps.

We challenge audit findings

By referring to similar audit outcomes, we can defend against and challenge Oracle’s audit findings. Our deep industry knowledge, and our understanding of Oracle license compliance assurance and audit defense, can give you a huge advantage during negotiations.

We decipher terms and conditions

We simplify the complex. We translate Oracle’s notoriously difficult licensing terms into language you can understand. This clarity helps you align your Oracle usage with your licensing agreements.

We negotiate better terms

Our team are highly skilled negotiators with years of experience advocating for Oracle customers. We aim to reduce possible fines and secure more favorable terms for your organization.

We provide long-term support

Even after the audit is over, Spinnaker Support can help. Our ongoing maintenance services can keep your Oracle infrastructure secure, compliant, and up to date with the latest standards. We can also help reduce your annual support fees by 60%. Read more: 6 Things to Know About Oracle’s Tactics if You’re Considering Third-Party Support

6 things to consider when choosing your Oracle audit defense provider

Now, you may be wondering, won’t moving to third-party support trigger an Oracle audit? Not exactly. In our experience, we’ve helped hundreds of organizations migrate to third-party support, and only a few have been through an audit. Here are six things to keep in mind when choosing an Oracle audit defense provider.

Consult an expert

Any reputable third-party support provider should offer a zero-risk, informal audit defense consultation. At Spinnaker Support, we can assess your situation and offer objective, unbiased advice. If you are running legacy software and considering direct vendor support options like Oracle Market Driven Support (MDS), we can advise you on the pros and cons of that option. Services like MDS are a temporary solution to problems created by software vendors, where they end mainstream support for older software and charge you a premium to keep supporting your on-premises software. By consulting us, we can help you decide if such a path is right for you and the implications of that path on future Oracle audits. For example, Oracle may take you signing up for MDS as a sign that you intend to migrate to their cloud services later, which may not reflect your intended roadmap.

Evaluate cost and expertise

Choose a third-party support provider that strikes the right balance between affordability and deep Oracle knowledge. Using a savings calculator can help you determine how much you could save on your annual Oracle support fees.

Check for comprehensive support

Ensure the provider offers end-to-end Oracle audit support, from pre-audit and final negotiations to post-audit compliance planning. At Spinnaker Support, we can not only guide you through an upcoming audit but also prepare you for future audits. Seek references and success stories Browse each provider’s website for references and success stories. See what quantifiable outcomes the provider has achieved and whether they match what you’re after. Are you planning a phased migration but need a managed service provider to maintain your on-premises Oracle systems? If so, then you’d be glad to know that we once helped a company specializing in hearing aids take control of their Oracle roadmap. The key takeaway here is to read success stories that match your situation. Consider proactive partnership Many Oracle customers grow frustrated with their delayed, reactive approach to security. A good third-party support provider should genuinely care about your long-term success. How? With personalized, proactive solutions that identify and address vulnerabilities in real-time.

Assess transparency

With each provider you approach, assess their communication style and response time. They should be easy to understand, both in person and through text. And they should respond in a timely and consistent manner.

Simplify Oracle audits with Spinnaker Support

At Spinnaker Support, we understand the challenges of facing Oracle alone. On your own, you may have a lot of questions you need to answers to, such as “Won’t moving to third-party support trigger an Oracle Audit?” Our Oracle audit defense services can help clear the air and prepare you for what’s to come. By leveraging our industry partnerships and historic data from previously audited customers, we help you regain control of the auditing process and save money on penalties and forced upgrades. Contact us to learn more about our Oracle audit defense services.