Case Study – Oracle Licensing Assessment – Latin American Conglomerate – Oracle Siebel, JD Edwards, Database & Middleware
Background: A Brazilian consumer goods conglomerate was using Oracle Siebel CRM to manage customer interactions and Oracle JD Edwards (JDE) for its manufacturing and distribution ERP.
Both systems ran on Oracle Database and Oracle WebLogic middleware.
The mix of older Oracle applications raised concerns about compliance (since each has unique licensing metrics), so the company undertook an Oracle licensing assessment and optimization project with our assistance.
Challenges: The assessment revealed a patchwork of licensing issues:
- Siebel CRM Over-Usage: The Siebel CRM system had more named users than licensed – similar to other cases, they found over 1,000 active Siebel user accounts compared to only ~600 licenses purchased. In addition, several Siebel add-on modules (like Siebel Marketing) were enabled without proper licenses, contributing to a compliance risk.
- JD Edwards Licensing Complexity: JDE was licensed per module and user; however, the conglomerate experienced difficulty tracking these licenses after years of customization. We found that certain JDE modules (for example, Advanced Warehouse) were being used at a couple of acquired factories that were never licensed for those modules under the main contract. This oversight resulted in a pocket of unlicensed JDE usage, potentially incurring heavy fees.
- Technical Footprint: On the database side, both Siebel and JDE databases had Oracle options (such as Partitioning and Diagnostic Pack) enabled without licenses, and some middleware components were deployed on more servers than originally accounted for. The combined compliance exposure across Siebel, JDE, and technology was substantial, roughly estimated at $8 million if everything had to be purchased at list price.
Solution: We executed a multi-faceted license optimization and risk mitigation plan:
- Siebel User and Module Optimization: In collaboration with business units, we conducted a comprehensive Siebel user audit and removed over 400 inactive or duplicate user accounts, reducing the active user count to approximately the licensed number. For the Siebel modules, we disabled those not actively needed. We assisted the client in purchasing a limited number of licenses for one high-value module that they actively used (Siebel Marketing) to achieve compliance. This reduced the Siebel-related risk by the vast majority (mirroring another Siebel project that mitigated $2.6M in user overage and $1.1M in unlicensed modules by rationalization).
- JD Edwards Remediation: We identified the unlicensed JDE modules in use at the acquired facilities and consolidated those processes into licensed modules where possible. In one case, a plant that was using an unlicensed JDE module for shop floor scheduling was able to switch to a licensed module (with some adjustments) for that purpose, thereby eliminating the need for the unlicensed one. For the remaining gaps, we prepared to negotiate with Oracle for a cost-effective solution (given that JDE is a legacy product, Oracle was open to flexible arrangements).
- Negotiation for Shortfall: After optimization, the residual license shortfall (mostly a handful of JDE module licenses and some database options) was addressed via negotiation with Oracle. We entered talks highlighting the extensive remediation already done and the fact that the customer was considering third-party support for these legacy systems if a reasonable deal couldn’t be reached. Oracle offered a negotiated amendment, where the conglomerate purchased the necessary JDE module licenses at an 80% discount off the list price. Oracle also included those in the existing support stream with no immediate fee uplift. Furthermore, to appease the customer, Oracle granted a one-year support fee waiver on certain database options – effectively allowing the client to use Partitioning and Diagnostics Pack for Siebel’s database at no cost for a year – to give them time to decide whether they wanted to keep those options or remove them. This kind of concession is uncommon but was achieved due to the client’s hard stance and our presentation of alternative plans.
Outcome: The Brazilian conglomerate resolved all identified Oracle license gaps through a combination of internal cleanup and a favorable negotiated settlement.
In the end, they paid a small fraction of the approximately $8 million potential exposure – the negotiated purchase was roughly $1.5 million (versus a list price of $8 million), settling the compliance issues completely. All Siebel and JD Edwards usage is now properly licensed or turned off, ensuring audit compliance.
The company also secured better support terms as we advance: by consolidating Siebel and JDE support under one Oracle agreement, it achieved approximately 15% savings in annual support costs (and avoided the 8% annual support increase that Oracle had been applying).
Perhaps most importantly for such legacy systems, the client can now opt to move to third-party support in the future without compliance risk, since the environment is fully licensed, giving them leverage and choice.
This case demonstrates how, even with older Oracle acquisitions like Siebel and JDE, a mix of optimization and negotiation can eliminate compliance risk and cut costs. For instance, another firm in a similar situation resolved $4.8M in Oracle CRM risk and saved $250 per year by taking a strategic approach.
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