Java Negotiations: Employee Metric, Audit and Renewals

Key Java Negotiation Points:

• Use market intelligence for better discount negotiation.
• Ensure Oracle’s discount is market-competitive.
• Avoid retroactive usage fees.
• Fully understand Oracle’s licensing rules.

Three different Oracle Java Negotiations

1. Negotiating an Employee Agreement Purchase for Java SE

When your organization needs to purchase Java SE, you are likely facing a multi-million dollar agreement.

Here are key aspects to consider during these negotiations:

Key Questions

1. Is the discount Oracle is granting you competitive in the market?
   • Ensure that Oracle’s discount aligns with market standards. Oracle’s initial discount may not always be the best. You can negotiate more effectively by understanding what other organizations with similar profiles are paying.
2. What if your number of “employees” grows during the term of the agreement?
   • If your employee count increases, it’s essential to clearly understand how to add more licenses. Negotiate terms that allow for scalable growth without excessive cost hikes.
3. What if the number of employees decreases during the agreement?
   • Similarly, ensure you have provisions for reducing your license count if your workforce shrinks. This flexibility can prevent unnecessary costs and ensure you only pay for what you need.

2. Java Negotiations: Soft Audits and Retro-Active Payments

Oracle soft audit tactics often involve asking for retroactive payments for past usage and using that as leverage to push for a multi-year agreement.

If Oracle approaches your organization and asks about your Java usage, you must assume they already have detailed records of your organization downloading licensable Java. This includes IP addresses, e-mails, and the number of devices that have been updated.

Treat this phase as a soft audit, and it requires the right negotiation expertise; the more you share with Oracle, the harder it will be to receive a zero-pay outcome if that is your goal.

Here’s how to navigate this situation:

Strategy to Avoid Retro-Active Payments

• Avoiding Retro-Active Costs:
  • Redress Compliance strategy ensures you do not have to pay for retroactive usage. This guarantee is included in our contracts with clients. When negotiating for Java SE, focus on how long you need the service. If you only need it for one year, negotiate a one-year agreement rather than being pressured into a longer term.
  • Written Guarantees:
    • Ensure agreements include written guarantees that retroactive usage will not be a factor in the negotiation. This can significantly reduce your initial costs and prevent Oracle from leveraging past usage to push for extended commitments.

3. Java Renewal Negotiations

For those renewing Java SE licenses, especially on old legacy metrics like Named User Plus and Processor, Oracle will try to transition you to the employee metric.

Here’s how to handle renewals effectively:

Key Advice

• Understand Your Licensing Position:
  • Fully grasp your current licensing position, including Oracle’s Java licensing rules and policies for virtualization, non-production, and backups. Misunderstanding these can lead to compliance issues and additional costs.
• Avoiding Forced Upgrades:
  • Oracle may insist on an audit before renewing your licenses, pushing you to the employee metric. Ensure you have accounted for all your licenses to avoid being forced into an unnecessary upgrade.

Common Mistakes in Java SE Negotiations

Organizations often make critical errors during Java SE negotiations.

Avoid these common pitfalls:

1. Factoring in Retro-Active Usage:
   • Many organizations mistakenly factor in retroactive usage at the start of negotiations, setting a high initial price point. Start negotiations with a one-year subscription basis, then apply relevant discounts.
2. Lack of Market Intelligence:
   • Organizations frequently lack awareness of the discounts achievable by understanding market rates. Knowing what similar organizations pay can set realistic and favorable negotiation goals.

Detailed Breakdown of Each Negotiation Aspect

Multi-million dollar Purchases for Employee Agreements

When entering a multi-million dollar purchase agreement for a Java SE Employee, your organization must scrutinize every deal aspect.

Start by evaluating the proposed discount and comparing it to industry benchmarks. Use market intelligence to understand what comparable organizations are paying.

• Negotiation Tips:
  • Request detailed breakdowns of how Oracle calculates its pricing.
  • Push for flexibility clauses that adjust license counts based on actual employee numbers.
  • Secure provisions for periodic reviews of the agreement to ensure it remains cost-effective as your organization evolves.
  • Understand your Java SE usage. The less Java you have in your estate, the more leverage you have in requesting discounts.

Renewing Legacy Metrics vs. Employee Metrics

When renewing Java SE under legacy metrics, be aware of Oracle’s push towards employee metrics.

Conduct a thorough audit of your current license usage to ensure compliance and avoid forced upgrades.

• Audit Preparation:
  • Perform an internal audit to identify gaps or excesses in your current license usage.
  • Develop a clear understanding of Oracle’s audit process and prepare accordingly.
  • Do not start the negotiation unless you are 100% certain of the Java licensing position.

Addressing Common Negotiation Mistakes

Avoiding common mistakes can significantly improve your negotiation outcomes.

Focus on the following:

• Starting with a One-Year Basis:
  • Always start your negotiations based on a one-year subscription model. This provides a clearer and more manageable starting point for applying discounts.
• Gaining Market Intelligence:
  • Invest in research to understand the discounts and terms that other organizations have secured. This knowledge empowers you to set realistic and competitive goals.

Don’t Like Oracle’s Java Proposal?

If you find Oracle’s Java proposal less than ideal, our service can help you negotiate better terms.

Here’s how we can support you:

• Written Guarantee Against Retro-Active Usage Fees:
  • We provide a written guarantee ensuring you won’t pay for retroactive usage unless you specifically request it. This will not be a factor in any Java SE contract negotiation.
• Market Insights for Better Discounts:
  • We have detailed insights into the discounts other organizations have received. This knowledge allows us to negotiate competitive and fair pricing for your Java SE needs.
• Pay Only for What You Need:
  • If you don’t need to pay for Java at all—such as when your IT estate currently has no Java SE—we assist in negotiating with Oracle to ensure you avoid unnecessary retroactive usage fees. We help you secure terms that reflect your actual usage and needs, not inflated estimates.

Our service protects your interests and ensures you only pay for what you need under favorable and transparent terms.

Can You Help If We Have Already Shared Data with Oracle?

Yes, we can still help you avoid paying for retroactive licensing. We’ve assisted over 50 organizations of various sizes, even those that have shared deployment data with Oracle. None have had to pay retroactive fees. This is a written guarantee in our contract.

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