Case Study – Oracle Licensing Assessment – Asia-Pacific Corporation – Oracle EBS, PeopleSoft, Database & Middleware
Background: An Asia-Pacific conglomerate (Australia) was running Oracle EBS for financials and Oracle PeopleSoft for HR across its diverse business units.
This dual-application strategy was the result of a past merger, and while it served business needs, it created licensing complexity.
Concerned about a potential Oracle audit, the company utilized our services to assess and optimize its licensing and negotiate a more sustainable agreement with Oracle.
Challenges: The assessment identified significant compliance and cost issues:
- Expanded Usage Beyond Licenses: The company’s operations had rapidly expanded in recent years (opening new locations, adding thousands of employees). Oracle EBS usage grew (additional modules like Order Management were deployed in some divisions without formal licensing), and PeopleSoft’s user count ballooned. We estimated a license deficit valued at around $15 million if Oracle audited all unlicensed usage (EBS modules and extra PeopleSoft users).
- High Oracle Spend Trajectory: Because of the growth, the company’s Oracle support bills were increasing sharply. They were also planning further expansion, which would normally entail even more Oracle licenses—a very costly prospect under standard pricing.
- Complex Contract Landscape: They had multiple Oracle contracts and order forms, some dating back many years. The contractual terms were not optimized for the current scale of the company – for example, there was no cap on support inflation and no discounts for large purchases, despite the company’s significantly larger size now. In short, they were due for a renegotiation to reflect their status as a major Oracle customer.
Solution: We worked on license gap mitigation, followed by a renegotiation with Oracle to achieve a holistic fix:
- Interim Remediation: Before approaching Oracle, we took steps to reduce the compliance gap. Unused EBS modules that had been enabled for testing were disabled to remove that exposure. In PeopleSoft, we archived a portion of historical employee data and deactivated accounts for contractors who no longer required system access, thereby reducing the licensed user count by a few percent. These actions showed a good-faith effort to optimize usage.
- Enterprise License Agreement Negotiation: We then entered negotiations with Oracle to craft a custom enterprise agreement covering both EBS and PeopleSoft (plus the necessary database/middleware). Leveraging the assessment data, we demonstrated to Oracle that the client might otherwise consider alternatives (including third-party support or even migrating off Oracle over time) if a reasonable deal couldn’t be reached. Oracle was keen to maintain the long-term relationship, so it offered a bundled agreement akin to an Unlimited License Agreement (ULA) for the applications. For a fixed fee, the company could deploy unlimited EBS and PeopleSoft licenses enterprise-wide for the next three years. We negotiated this fee down aggressively by citing benchmark pricing and the fact that much of the usage was already in place. The final agreement came out to roughly one-quarter of Oracle’s initial quote – essentially converting a ~$15M compliance claim into a ~$4M fixed investment spread over three years.
- Improved Commercial Terms: As part of the deal, we secured favorable terms: Oracle agreed to include a pool of cloud credits that the company could use (this provided future flexibility, essentially free Oracle Cloud services equivalent to a portion of the fee). We also negotiated 0% annual increase on support for the contract term and ensured all legacy support contracts were rolled into this new agreement to simplify management. Importantly, the agreement included a certification clause (similar to a ULA), allowing the company to retain and continue using any licenses it had in place at the end of the term, thereby preventing any unexpected costs later.
Outcome:
This case turned a looming compliance and cost crisis into a strategic win. The company avoided an estimated $15 million in audit fees or ad-hoc purchases – instead, for about 80% less cost, they obtained an Oracle license agreement that covers their growth for the next three years.
The negotiated terms also mean the company will see no support cost increase (0% uplift) for the duration of the agreement. They reduced their current support spend by consolidating everything (achieving about 18% immediate support savings compared to the previous year).
By having Oracle include cloud credits and flexible payment terms, the organization preserved cash flow and gained options to modernize.
At the end of negotiations, Oracle settled for a deal vastly more favorable to the client than a strict compliance enforcement would have been, much like a case where a $30 million Oracle compliance risk was settled for $1 million after adept negotiations.
The Asia-Pacific conglomerate now enjoys license compliance and cost predictability, with the freedom to expand its use of Oracle software without fear of runaway fees during the agreement term.
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