Background
Oracle audited a southern European bank running Oracle Database in a complex infrastructure environment. The bank initially attempted to navigate the audit process independently — a common but frequently costly mistake when facing Oracle's License Management Services (LMS) scripts and audit methodology.
After Oracle issued an audit report worth €8 million, the bank's leadership recognised the severity of the situation and enlisted Redress Compliance to help minimise the impact and negotiate the best possible outcome. The licence compliance issues identified by Oracle ranged from virtual environment licensing disputes to unlicensed database options usage — two of the most common and most frequently inflated findings in Oracle audits.
Challenge
The bank faced an €8 million non-compliance claim from Oracle's LMS team — a potentially devastating financial hit for any organisation, particularly one that believed it was broadly compliant with its Oracle licence agreements.
| Challenge | Detail |
|---|---|
| €8M Audit Claim | Oracle's LMS team issued an audit report asserting €8 million in non-compliance, covering multiple Oracle Database products, options, and infrastructure configurations across the bank's environment. |
| Virtual Environment Disputes | Oracle applied its restrictive soft partitioning policy to the bank's virtualised infrastructure, potentially requiring the bank to licence all physical cores across entire clusters — far exceeding actual Oracle usage. |
| Unlicensed Database Options | The audit flagged usage of Oracle Database options and management packs (such as Diagnostics Pack, Tuning Pack, or Partitioning) that may have been inadvertently enabled but not actively used — a common Oracle audit tactic. |
| No Independent Expertise | The bank had attempted to handle the audit independently, without the specialised Oracle licensing knowledge needed to challenge Oracle's findings, identify errors, or develop a counter-strategy. |
Solution
Redress Compliance was engaged after the audit report had already been issued — a late-stage intervention, but one where our experience in deconstructing Oracle audit findings delivers the greatest impact:
Phase 1: Audit Report Review
Redress conducted a comprehensive, line-by-line review of Oracle's audit report — examining every finding, every calculation, and every assumption. We cross-referenced Oracle's claims against the bank's actual licence entitlements, ordering documents, and contractual terms to build an accurate picture of the true compliance position.
Phase 2: Error Identification
Redress identified significant errors and incorrect assumptions on Oracle's part. These included misapplied virtualisation rules, inflated processor core counts, database options flagged as "in use" that were merely installed but never actively utilised, and licensing calculations that did not reflect the bank's actual contractual entitlements. Each error was documented with evidence to support the bank's counter-position.
Phase 3: Negotiation Strategy Development
Redress developed a structured negotiation strategy designed to challenge Oracle's findings systematically and enable the bank to pay as little as possible. The strategy addressed each audit finding individually, prioritised the highest-value errors for challenge, and established a target settlement range based on the bank's actual compliance exposure versus Oracle's inflated claims.
Phase 4: Settlement Negotiation
Redress guided the bank through a focused negotiation process with Oracle's LMS team — presenting the documented errors, challenging Oracle's methodology, and applying commercial pressure to reach a fair settlement. The negotiation was resolved within four months of the original audit report.
Outcome
The audit was settled at €300,000 — a €7.7 million reduction from Oracle's initial €8 million claim. This outcome was achieved by systematically dismantling Oracle's audit findings through expert analysis, identifying multiple material errors in Oracle's calculations and assumptions, and executing a disciplined negotiation strategy that kept the bank in control of the process throughout.
⚖️ Audit Claim Breakdown
| Metric | Oracle's Claim | Actual Position |
|---|---|---|
| Total Non-Compliance Claim | €8,000,000 | €300,000 |
| Virtual Environment Findings | Inflated — all physical cores counted | Errors identified, scope corrected |
| Database Options Findings | Multiple options flagged as "in use" | Installed but not actively used — challenged |
| Savings Achieved | — | €7,700,000 (96% reduction) |
The settlement not only delivered immediate financial savings of €7.7 million but also established a stronger compliance posture for the bank going forward, with clearer documentation of its licensing position and improved processes for managing Oracle deployments in virtualised environments.
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Facing an Oracle Audit?
Oracle's LMS audit reports are designed to maximise Oracle's revenue — not to reflect your true compliance position. Our team of former Oracle auditors and licensing specialists has reviewed hundreds of audit reports and consistently identifies material errors, inflated calculations, and incorrect assumptions. The earlier you engage independent expertise, the stronger your negotiating position.
Key Takeaways
1. Never accept an Oracle audit report at face value. Oracle's LMS reports are not objective compliance assessments — they are commercial documents designed to maximise Oracle's settlement. In this case, 96% of Oracle's claim was eliminated through expert review. Always engage independent analysis before responding.
2. Virtualisation findings are almost always inflated. Oracle's soft partitioning policy is one of the most contested areas in enterprise licensing. Oracle will attempt to licence every physical core in a cluster where an Oracle VM could theoretically run. Challenge these findings with architectural evidence and contractual analysis. See Oracle Licensing in Virtual Environments.
3. Database options flagged as "in use" often aren't. Oracle's audit scripts record cumulative feature-usage data — meaning a database option that was briefly or accidentally enabled years ago will still appear as "in use." This is one of the most common inflated findings in Oracle audits and should always be challenged with evidence of actual usage patterns.
4. Don't navigate an Oracle audit alone. This bank initially handled the audit independently and faced an €8M claim. After engaging Redress, the claim was reduced to €300K. The complexity of Oracle's licensing rules — particularly around virtualisation, processor metrics, and database licensing models — requires specialist expertise to defend effectively.
5. Time is a negotiating lever. Oracle's audit teams operate on internal timelines and revenue targets. A well-prepared defence that slows the process and forces Oracle to justify every finding puts the customer in a stronger position. This engagement was settled in four months — fast, but on the bank's terms.
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Related Reading
🔗 Official Oracle Resources
Oracle Corporate Pricing
Oracle Partitioning Policy (PDF)
Oracle Lifetime Support Policy (PDF)
Oracle Technology Price List (PDF)
Oracle Advisory Services
Fredrik Filipsson
20+ years in enterprise software licensing. Former IBM, SAP, and Oracle. 11 years as an independent consultant advising hundreds of Fortune 500 companies on Oracle, Microsoft, SAP, IBM, Salesforce, and ServiceNow licensing, contract negotiations, and cost optimisation.
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