Case Study – Oracle Audit Defense: How We Cut a €5M Claim to €500K for a German Automotive Manufacturer
Background
A German automotive parts manufacturer (based in Bavaria, Germany), supplying major car makers, ran a range of Oracle software in its operations.
Oracle E-Business Suite managed manufacturing, orders, and supply chain, while Oracle Database and Oracle Real Application Clusters (RAC) ensured high availability for factory floor systems.
The company, with 4,000+ employees, also used Oracle Agile PLM for product lifecycle management. Germany’s strong data protection and works council requirements meant that any software compliance issues needed careful handling, as audits and changes could trigger internal process reviews.
The company had a mix of Oracle licenses acquired over time. Still, no centralized tracking, and some older Oracle Standard Edition databases had been upgraded to Enterprise Edition without adjusting licenses – a potential red flag.
Challenges
Oracle’s audit team focused on the manufacturer’s database deployments and E-Business Suite modules.
A primary issue was user licenses for E-Business Suite: Oracle’s audit found that the manufacturer had created many more user accounts in the ERP than they had licenses for, potentially exceeding Named User Plus counts.
This was partly due to a practice of creating separate accounts for each production line terminal and test account, which Oracle counted as users.
Additionally, the audit discovered that the company had enabled Oracle Database options like RAC and Partitioning on some servers without having purchased those options for all instances – likely an oversight when some Standard Edition databases were migrated to Enterprise Edition for scalability.
The compliance gap was estimated at €5 million, mostly attributed to database option licenses and extra ERP users, plus some missing WebLogic licenses for a custom application.
Oracle Germany’s audit representatives were pressuring for a quick settlement and hinted at involving legal enforcement if the company did not purchase the required licenses soon.
The automotive supplier was keen to resolve this without disruption, as any halt in their Oracle systems (via compliance enforcement) could halt manufacturing, incurring huge losses.
How Oracle Licensing Experts Helped
- Licensing Assessment: Oracle Licensing Experts conducted an on-site and remote assessment to verify the audit claims. They closely examined the E-Business Suite user list, mapping it against actual employee roles. The assessment showed that a significant number of those “users” were not active or were generic accounts for kiosks that could potentially be covered under a different licensing metric. They also analyzed the Oracle Database usage and found that while some servers had RAC enabled, those were part of a cluster that actually corresponded to a previously licensed environment. In other words, Oracle had counted an “unlicensed RAC” which was in fact within the scope of an existing license when looking at the cluster as a whole. The team identified a few genuine shortfalls (e.g., a new Development environment was set up without licenses), but nothing close to Oracle’s €5M claim.
- Audit Defense Strategy: With facts in hand, the experts developed a defense strategy. For the ERP user issue, they prepared a proposal to reclassify and reduce the user count: explaining to Oracle that many accounts were read-only or for shop-floor terminals and could be covered by a license metric Oracle offers called “Applications Limited Use” or could be consolidated. They negotiated with Oracle to apply a more appropriate licensing metric for these non-employee interactive accounts. Regarding the Database options, the strategy was to show Oracle that they had over-counted; Oracle Licensing Experts provided evidence of proper licensing for RAC on the main production cluster and committed that the client would disable RAC on non-critical instances that didn’t need it (thus no license required there). They also highlighted Oracle’s core factor and Standard Edition rights, demonstrating that some databases could have been running Standard Edition (which doesn’t support those options anyway), meaning Oracle’s assumption of option usage was moot. By systematically addressing each line item in the audit report, the strategy aimed to erode Oracle’s position.
- Mitigation: The manufacturer, guided by the consultants, took immediate mitigation steps to bolster their case. They cleaned up the ERP user list, deleting or deactivating over 1,000 dormant accounts and combining roles so that one user login could do multiple tasks rather than having several accounts. They also quickly disabled Oracle RAC and Partitioning on a few non-essential dev/test databases, ensuring that those features were only running where properly licensed. This not only improved compliance but also slightly reduced the technical complexity (and even saved on resource usage). These actions were documented and shared with Oracle to show good faith efforts.
- Settlement Negotiation: During negotiations, Oracle Licensing Experts and the company’s representatives presented the adjusted compliance view. They convinced Oracle to accept a new count of ERP users that was far lower after the clean-up, aligning with existing licenses. For the database side, after intense discussions, Oracle conceded that the RAC options were properly licensed on the production cluster and agreed to overlook the previous misuses on dev systems once it was shown they had been resolved. The settlement thus came down to addressing the small number of truly unlicensed areas. Oracle Licensing Experts negotiated a minimal purchase: the company bought licenses for a handful of WebLogic servers (to cover the custom app) and 100 extra Named User licenses for E-Business Suite to cover future growth, totaling roughly €500,000. This was a far cry from €5M and was structured as an addendum to their existing Oracle agreement with a slight discount. Oracle closed the audit with this settlement and no further action.
Outcome and Impact
The German automotive supplier avoided about 90% of the costs Oracle initially targeted. Instead of €5M, they spent €0.5M on licenses that would actually support their operations (and even those were somewhat forward-looking to accommodate growth).
The outcome ensured continuity of the manufacturing systems – there was no threat of Oracle shutting down licenses or support, which could have crippled production.
The company’s IT team emerged with a much cleaner Oracle user and deployment environment. The reduction of unused accounts improved security and performance in the ERP system. Disabling unneeded database options simplified database management and reduced the risk of future compliance issues.
Financially, the saved €4.5M remained available for the company’s strategic projects, such as investing in Industry 4.0 technologies for their factories.
The case demonstrated to the company’s management the importance of proactive license management; as a result, they instituted regular internal audits and engaged Oracle Licensing Experts for annual check-ups to ensure ongoing compliance.
The collaborative resolution also preserved a decent relationship with Oracle – it was seen that both parties came to a reasonable agreement.
For a German enterprise known for prudence, successfully managing down an Oracle audit was seen as upholding their reputation for diligence and financial discipline.
“We run a tight ship in manufacturing, and we needed the same discipline in our software licenses. Oracle’s audit report was a shocker, but the Oracle Licensing Experts turned it around expertly. They helped us tidy up our user lists and configurations, essentially erasing 90% of Oracle’s claims. In the end, we only paid for a few things we actually needed. It was a huge relief – no production downtime, no overspending. This experience taught us a lot, and now we feel back in control of our Oracle licenses.” — IT Manager, German Automotive Manufacturer
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