Case Study – Oracle Audit Defense: How We Reduced a £15M Audit to £3M for a UK Telecom Company
Background
A leading telecommunications provider in the UK, servicing mobile and broadband customers, had an extensive Oracle footprint.
Oracle Database powered its billing systems and customer data warehouses, Oracle Fusion Middleware supported integration between CRM and network management apps, and Oracle ERP modules were used in internal operations.
The company, with about 5,500 employees, had data centers across the UK and Europe.
Over the years, they virtualized many Oracle workloads using VMware and also migrated some databases to Oracle’s cloud under Bring Your Own License (BYOL) models.
The complexity of their environment made tracking Oracle licenses challenging. Telecom is a highly competitive, cost-sensitive industry, and the company aimed to avoid unnecessary software expenses.
Challenges
Oracle initiated a comprehensive audit covering databases, middleware, and ERP usage. The telecom firm faced license compliance issues on multiple fronts.
First, Oracle’s audit cited the company’s widespread use of VMware virtualization. Under Oracle’s policies, if Oracle software could run on a VMware cluster, every host in that cluster would be required to be licensed.
This interpretation put the company in a position of owing licenses for dozens of server cores that never actually ran Oracle, massively inflating the apparent shortfall.
Second, Oracle GLAS (Global Licensing and Advisory Services) flagged that the company’s usage of Oracle Database in the cloud (OCI and even in AWS via BYOL) might not strictly meet the contractual requirements, implying some deployments were improperly licensed.
Third, Oracle found that an Oracle WebLogic Suite used for the company’s customer-facing web portal was configured with Oracle’s Java SE without a Java subscription, adding another compliance issue.
The initial audit findings suggested over £15 million (~$18M) in license and support fees would be required to resolve everything. Oracle’s auditors pressed the telecom to consider a new ULA or a large one-time purchase, using the audit’s hefty number as leverage.
This created high pressure on the company’s procurement and IT departments, which knew that such a sum would impact network upgrade investments.
How Oracle Licensing Experts Helped
- Licensing Assessment: Oracle Licensing Experts were brought in to dissect the audit findings and assess actual needs. They collaborated with the telecom’s IT asset team to map out each Oracle deployment vis-à-vis its infrastructure. In doing so, they identified that many Oracle databases were in fact running on dedicated physical hosts (especially for production), not on the shared VMware clusters – a crucial detail the audit had overlooked. They also verified the company’s cloud deployments and found that in several cases, the cloud instances were actually covered under existing BYOL licenses that Oracle hadn’t properly credited. A thorough entitlements review revealed some forgotten licenses from a past subsidiary that could offset part of the shortfall.
- Audit Defense Strategy: The experts formulated a defense strategy focusing on factual corrections and strategic negotiation. They prepared a case to show Oracle that the VMware issue was overblown. By providing architecture diagrams and VMware settings, they proved that Oracle software was technically restricted to specific hosts (using features like DRS host affinity), countering Oracle’s blanket licensing claim. For the cloud usage, they cited Oracle’s public cloud policy documents and the client’s adherence to them, challenging the notion that those instances were unlicensed. The strategy also involved leveraging the telecom’s importance as a client, as a major UK telco, the company regularly purchased hardware and other services from Oracle. Hence, the experts emphasized the value of maintaining a good relationship over pushing an outsized audit claim.
- Mitigation: Before concluding negotiations, Oracle Licensing Experts guided the company through immediate mitigating actions. They repartitioned some of the VMware clusters to isolate Oracle workloads completely; this meant Oracle could no longer argue that those entire clusters needed licensing. They also installed Oracle’s License Management tooling on cloud instances to ensure proper tracking and show a willingness to comply. The usage of Java in WebLogic was addressed by quickly obtaining an Oracle Java SE subscription for the minimal number of users that managed that system, closing that gap on the fly. Additionally, they helped the client implement internal policies such as requiring pre-approval before any Oracle software could be deployed in VMware or the cloud, preventing future issues.
- Settlement Negotiation: In negotiations, Oracle Licensing Experts and the client’s procurement team met with Oracle’s audit and sales representatives. The experts challenged the £15M figure with detailed evidence, showing how much of it was based on theoretical scenarios rather than actual use. They negotiated for a package settlement: rather than writing a blank check, the client would purchase a small number of additional Oracle licenses and cloud credits (worth roughly £3M) that aligned with their strategic needs (e.g., licenses for a new analytics initiative the business actually wanted, and Oracle Cloud credits that the company could utilize). They insisted that this purchase include clearing all audit findings. Oracle, seeing the client’s well-prepared stance and fearing a standoff, agreed to the deal. The negotiation also leveraged timing – it was finalized just before Oracle’s fiscal year-end, which helped Oracle justify granting a steep concession to book the sale.
Outcome and Impact
The telecom company achieved a 75% reduction in the apparent audit liability, bringing a £15M issue down to a manageable £3M strategic spend. This outcome was celebrated internally as a major win, as it protected the budget for network improvements and 5G rollout that year.
In the end, the £3M spent wasn’t “dead money” for unwanted licenses – it was channeled into Oracle products the company could actually use (e.g., expanding their data warehouse capabilities), making the settlement feel much more palatable.
The company entered a new contractual agreement with Oracle that clarified virtualization and cloud usage rights, greatly reducing the risk of similar audits in the future.
The license compliance status of the company was confirmed, and Oracle provided formal closure of the audit without any penalties.
Business-wise, avoiding the larger audit bill meant the telecom’s financial health and stock performance were not impacted, which was a relief to executives.
The collaboration with Oracle Licensing Experts not only solved the immediate problem but left the company with improved practices and a more equitable relationship with Oracle.
“Our Oracle audit could have been a £15 million disaster for us. It felt like Oracle was counting every server in sight, whether we used it or not. The team at Oracle Licensing Experts was instrumental in flipping the script. They debunked Oracle’s inflated claims, guided us through smart fixes, and negotiated a outcome where we only invested in software that truly adds value to our business. We emerged stronger, fully compliant, and with our IT budget intact.” — Head of IT Procurement, Telecom Company (UK)
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