Featured Article from Software Licensing

City of Denver to Pay to 'True Up' Oracle Licenses

March 29, 2017




Software licensing non-compliance is hardly an uncommon issue, but sometimes the culprits can be surprising. The City of Denver, Colorado has turned out to be one of Oracle’s (News - Alert) most recent scofflaws after an audit by the software giant revealed underpayment by the city, which has admitted that it violated its licensing agreement. Though the city pays an average of $1 million each year to Oracle, over-deployment of Oracle’s solutions led the company to send an email late last year concluding that “the current over-deployment would require in excess of $10m (million) to license.”

According to Brian Maass writing for local CBS affiliate CBS4, Denver taxpayers would have been on the hook for this overage if Denver didn’t strike an agreement with Oracle.

“We are going to look at existing processes and make sure they get better and better,” said Scott Cardenas, Chief Information Officer for Denver Technology Services, who would not comment about how the city became non-compliant with its Oracle licenses.

Denver Technology Services has now reportedly hammered out a new five-year contract which will increase Oracle’s software licensing compensation for 2017 to nearly $4 million, or four times the previous year’s figure. The city’s technology administration is emphasizing, however, that the increased contract amount is simply an adjustment and not a fine or penalty for overuse of Oracle’s solutions.

Cardenas has had to appear before city finance committees, where he told councilmembers the hefty increase in payments to Oracle represent a “true-up of our licensing going forward.”

Jenny Schiavone, a spokesperson for the city, told CBS4, “The old one was an outdated licensing model for the city and the new one right-sized our agreement and modernized the service structure for our current and future needs … this was all part of a normal business model true-up for a technology department.”

CBS4 spoke with Craig Guarente, a former Oracle vice president of contracts and business practices, who now runs a consulting firm for government agencies and companies that run afoul of Oracle licensing requirements. Guarente told the affiliate that Oracle makes it difficult for their customers to remain compliant with their licenses. He says the company then audits software usage, usually finding massive violations, leading to fat new contracts.

“If they (City of Denver) were on top of this and more proactive they might not have needed to do another deal with Oracle,” Guarente told Maass. “If you are out of compliance and they find that they use that to pressure you to do things like give them millions of dollars.” 


 
Article comments powered by Disqus


Free Trials

See For Yourself Why So Many Trust Flexera Software Solutions

Featured White Papers / eBooks

Report: Software Licensing 2016: Seismic Shifts - Shaky Foundations

Report: Software Licensing 2016: Seismic Shifts - Shaky Foundations
Key Trends in Software Pricing & Licensing Survey - 2016 Report...

eBook: How Can You Monetize the Internet of Things?

eBook: How Can You Monetize the Internet of Things?
This eBook provides 5 tips for leveraging your intelligent devices and apps to gain higher revenues, competitive advantages and lower costs as well as discusses software monetization and licensing use cases and success stories...

eBook: 10 Reasons to Buy a Purpose-built Software Monetization Solution

eBook: 10 Reasons to Buy a Purpose-built Software Monetization Solution
Read this eBook that arms you with 10 reasons to buy - and not build - that can be used to develop the business case for leveraging a commercial Software Monetization solution...

eBook: How Do I Transform My Hardware Business and Supply Chain Processes to Support a Software Business?

eBook: How Do I Transform My Hardware Business and Supply Chain Processes to Support a Software Business?
This eBook discusses the hardware to software shift, the changing business requirements for successfully managing a software business and provides guidance on next steps...

Featured Press Release

Featured Webinars

Networking Leader Shares Why Transforming their Business was Key to Leveraging NFV Market Trend

Networking Leader Shares Why Transforming their Business was Key to Leveraging NFV Market Trend
Attend this webinar to hear Richard Jenny, Director of Program Management and DevOps with ADVA Optical Networking discuss why they decided to leverage a Software Monetization platform instead of building their own software licensing, entitlement management and software update solution.

Expert Panel: Software Monetization Trends and Best Practices with IDC and Flexera Software
Join Software Monetization experts as they share predictions and best practices on the topics that are driving transformation in the technology industry. If you are a software vendor looking to adopt new subscription, usage and outcome-based business models or a device manufacturer looking to monetize your software and establish recurring revenue models, this panel discussion will address all these issues as well as the impacts of cloud, virtualization and IoT.

Webinar: Software Monetization Maturity Model - How to Get Your Organization to the Next Level
Application producers are faced with many challenges as they try to grow revenue and streamline back-office processes, and those that are thriving have adopted a strong and well thought out software monetization strategy