Oracle Java audit checks for Java licensing compliance.
- Two types: Formal and Soft audits.
- Formal audits follow structured procedures by the Oracle audit organization.
- Soft audits start with compliance conversations and can escalate to legal involvement.
- Oracle often uses security downloads as proof of non-compliance.
Has Oracle reached out to you about a Java license? Download our Oracle Java Audit white paper to learn how to respond and avoid common pitfalls.
In the white paper, we cover:
- Recommendations for responding to an Oracle soft audit
- Oracle’s soft audit process
- Oracle’s formal audit process
- The kind of data Oracle may have on your organization’s Java product downloads.
Oracle Java Audit
Formal Audits
Formal audits follow a structured procedure managed by Oracle’s audit organization. They begin with selecting the Oracle account team and rely heavily on the organization’s inventory and software asset management (SAM) tools.
The process involves self-declaration, in which the organization must provide details like installation dates, paths, versions, and security patches.
The key steps in a formal audit include:
- Audit Notification: Oracle gives a 45-day notice before the audit begins.
- Data Sharing: Organizations must share relevant data, though what constitutes this data can be negotiated.
- Audit Report and Review: Oracle presents its findings, which the organization can review and respond to.
Soft Audits
Soft audits are less formal and begin with compliance conversations with IT departments. They can escalate to involve C-level executives and legal teams, making them more challenging.
The stages of a soft audit include:
- Initial Contact: Friendly discussions aimed at gathering information.
- Follow-Up Communication: Oracle uses records of Java security downloads to push for compliance.
- Business Practices Engagement: High-pressure tactics, often involving legal-sounding communications, target C-level executives to push for a transaction.
Oracle is taking legal action against organizations that do not respond to Oracle’s inquiries about procuring licenses. Here is our guide on how to avoid the Oracle Litigation department.
Oracle Java Audit Triggers
- Java Downloads and Updates: Oracle closely monitors any Java downloads or updates in your organization. Their logs can go back up to 7 years.
- Pre-2023 Java SE Licenses: If you purchased Java SE licenses before January 2023, you can’t renew them. You will likely face a soft audit instead.
- Formal Audits: Ignoring Oracle, especially about security downloads, can lead to a formal Java audit.
- Limited Oracle Software Usage: Using minimal or no Oracle software increases your likelihood of being targeted for an audit.
- Lack of Oracle Cloud Strategy: Without a plan for Oracle Cloud Infrastructure (OCI) or Software as a Service (SaaS), your organization is more susceptible to audits.
Current Trends in Oracle Java Audits
Oracle’s audit activity has been increasing, focusing on security downloads of licensable Java versions.
These downloads are often used to prove non-compliance, and Oracle insists that organizations purchase licenses.
Read our A Checklist for When Oracle Contacts You About Java Licensing.
Oracle Java Audit Defense Strategy
Audit Notification and Kick-Off
When notified of a Java audit, responding professionally and preparing for the audit kick-off meeting is crucial. Engage your legal team and consider involving third-party tools for data sharing. A thorough review of Oracle’s audit report, followed by a well-crafted response, is essential.
Soft Audit Defense
For soft audits, maintaining control over the information shared is critical. To better manage and respond to Oracle’s inquiries, decline all meetings and opt for written communication. This helps provide formal, controlled responses that deter Oracle from escalating to a formal audit.
Risks of Ignoring Oracle
Ignoring Oracle’s initial emails can lead to direct contact with top executives and subtle threats. While the risk of a formal audit varies, non-responsiveness can escalate the situation, increasing the pressure on your organization.
Oracle Java Audit Challenges
Security Downloads in Oracle Java Audits
What are Security Downloads?
- Definition: Security downloads refer to Oracle’s records of your organization downloading licensable Java versions since 2019.
- Content: These records may include email addresses (if downloaded from My Oracle Support), IP addresses, the specific Java package downloaded, timestamps, and the number of downloads.
Oracle’s Claims
- Oracle uses these download records to assert that your organization requires Java licensing.
- This claim is a part of Oracle’s sales strategy and is not based on its official audit methodology or process.
Retro-Active Licensing in Oracle License Java Audit
What is Retro-Active Licensing?
- Definition: Retro-active licensing refers to Oracle’s demand for backdated licensing fees based on Java download records since 2019.
- Basis: These claims are based on Oracle’s IP address, Java package name, and download timestamps.
Oracle’s Claims
- Oracle insists that your organization pay for Java licenses retroactively if downloads are identified.
- They argue that since named user plus and processor licensing for Java are no longer sold, licensing must be done retroactively using the employee metric.
Who From Oracle is Involved?
Small and Medium Enterprises (SME)
For SMEs, Oracle’s escalation process often involves the Business Practices team from Oracle, whose role is primarily sales-focused. Their involvement usually means the sales team has not made sufficient progress. They may request environment scans and reports to prove non-compliance.
Larger Organizations
Larger organizations are typically assigned senior account sales representatives who begin with friendly discussions about Java usage. This process can last 1-6 months and become more aggressive as Oracle’s fiscal year-end approaches.
Escalations may involve letters on Oracle audit letterhead or direct contact from Oracle’s audit team, pressuring for quick resolutions.
Best Practices for Managing Oracle Java Audits
Decline Meetings
Avoid face-to-face meetings with Oracle representatives. Insist on written communication to better control the information flow and responses.
Rights in Soft Audits
Remember that Oracle has limited rights to information in a soft audit process. Provide minimal information to show control over licensing, deterring Oracle from pursuing formal audits.
Formal Responses
Respond formally and correctly to Oracle’s inquiries. This signals that you are unwilling to share information outside a structured audit process.
Persistence and Consistency
Oracle is known for its persistence. Consistently repeat your answers and ensure all internal stakeholders, including C-level executives, understand and follow the strategy of non-engagement.
Internal Communication
Keep all internal stakeholders informed about the audit strategy. This includes educating them on not responding to Oracle and buying into the delay tactics.
Delay Tactics
If your strategy involves buying time, you can delay responses by two weeks or claim to be out of the office. You can also inform Oracle that you must consult with another team, which can buy additional time.
How Oracle Negotiates Java Audits
- Past Usage Identification: Oracle often identifies past usage, such as security downloads from the past three years, along with your current Java installations.
- Forward-Looking Agreement: Instead of paying for three years of backdated usage, Oracle proposes a three-year agreement. This offer stands even if you only need Java for a few months.
- Negotiation Stance:
- Option 1: Sign a three-year (or longer) agreement.
- Option 2: Pay for one year plus three years of backdated usage.
- Discounts: Oracle offers 10-20% discounts on agreements spanning 3-10 years.
- Contractual Release Language: Oracle includes contractual “release language” to remove historical usage claims.
Case Study Java Audit
Background
A prominent organization in the Western United States faced a daunting situation when it was faced with Oracle’s claims for hundreds of thousands of dollars in retroactive fees related to Java deployments.
With potential financial repercussions at stake, the organization turned to Redress Compliance for expert assistance in navigating the complexities of Oracle licensing and audit processes.
Challenge
The organization was confronted with Oracle’s demands for retroactive licensing fees exceeding $400,000 based on an audit that identified alleged non-compliance in their Java software deployments.
The stakes were high, and a strategic response was critical to avoid a substantial financial burden.
Approach
Redress Compliance undertook a multi-faceted approach to address the challenge:
- Comprehensive Review: The first step involved thoroughly analyzing all communications between Oracle and the client, providing Redress Compliance with a clear understanding of the claims and Oracle’s stance.
- Deployment Assessment: Redress Compliance conducted an in-depth review of the Java deployments. This examination was crucial for verifying compliance and identifying any possible misunderstandings or inaccuracies in Oracle’s audit findings.
- Strategic Communication: Armed with insights from the reviews, Redress Compliance developed a targeted communication strategy to counter Oracle’s claims. This strategy was grounded in factual evidence and clearly articulated the organization’s compliance posture.
- Negotiation: Redress Compliance engaged in months of negotiation with Oracle, leveraging their deep understanding of Oracle’s licensing policies and audit practices to advocate on behalf of the client.
Outcome
The negotiations led by Redress Compliance culminated in a settlement where the organization was required to pay only $5,000—a fraction of the initial demand exceeding $400,000.
This resolution represented a significant financial relief for the client and underscored the effectiveness of a well-informed and strategically executed response to software licensing audits.
FAQs
Does Oracle have any scripts to audit Java?
No, they do not; they rely on any third-party SAM tool (verified by Oracle), and you share declaration data in Excel.
What is Oracle focusing on in the audit?
Application name, Virtual deployments, VDI, Install paths, security patches, downloads of security updates or versions for the past 10 years.
What is a common mistake in the audit?
Oracle will ask when Java was installed; they do this to claim retroactive fees. We recommend you leave that field out or dispute those claims.
Are all Oracle Java audits the same?
No, we see that different auditors are using different methods and tools. Some auditors also ask for Java Commercial Features, while others do not.
Should we ignore Oracle e-mails about wanting to discuss licensing?
At first, yes, unless you already have a complete picture of your Java Licensing and an audit defense strategy. But Oracle will eventually escalate to your C-level management. We recommend you read our Oracle Java Audit Checklist.
Oracle have logs of security and downloads of Java, how to respond?
There is no easy answer: Oracle has records of your organization downloading licensable Java. We recommend you review your licensing and design an audit defense strategy.
Oracle is sending us e-mails about wanting to discuss Java Licensing, what should we do?
Review which deployments require a license, optimize them, and then negotiate and communicate with Oracle based on your results. Oracle has all the information advantages; if you want to save money and achieve a successful outcome, consider our Java Audit Defense Service.
Do we have to purchase the employee metric if we have licensable Java installed?
No, there are other purchasing options; however, to successfully negotiate such a purchase, you must have a full picture of your deployments and know how to negotiate with Oracle.
We purchased Java SE on the old license metrics, Oracle is not willing to renew on the old metrics, what should we do?
Oracle can calculate the cost of an employee license metric. If you want to save money and avoid purchasing the employee metric, consider getting expert help.
How can Redress Compliance Java Audit Defense Service Help?
This service is structured in two distinct phases:
1 – Java Licensing Assessment & Optimization: A thorough evaluation and enhancement of your Java licensing structure.
2 – Java Audit Defense Strategy & Advisory: Providing strategic advice and support for audit defense, including communication and negotiation with Oracle.
Organizations can engage in one or both phases based on their specific needs.
Which are the most common triggers for an Java audit?
Oracle audits are not random; they act on different kinds of information. A few joint audit triggers exist, such as downloads of downloadable Java for the past 5-10 years.
How Redress Compliance Can Help
- Understand Your Licensing Position: Need help understanding your current Java licensing position? We offer expert analysis to clarify your status.
- Retroactive Licensing Demands: Are you facing demands for retroactive licensing? Oracle might offer to waive these fees for 3—to 10-year agreements, but we can often reduce this to zero.
- Managing Security Downloads: Are you struggling with a strategy for security downloads? We have a proven approach to managing this issue and avoiding unnecessary license purchases.
- Negotiating Deals: Need to purchase Java SE? We can help you negotiate a better deal for your organization.
- Communication and Insights: We assist in crafting a robust communication strategy and provide valuable insights into Oracle’s audit capabilities, ensuring you are well-prepared for any audit scenarios.
Read more about our Oracle Java Audit Defense Services.