The Oracle LMS audit is a right you granted in writing. Read the clause before you answer the letter.

An Oracle audit is Oracle using a right you granted in your license agreement. The clause gives the audit a start and no end, which leaves you room to set scope and pace and to contest how Oracle counts.

What is an Oracle LMS audit, and where does Oracle get the right to run one?

An Oracle license audit is Oracle exercising a right you granted when you signed a license agreement with an audit clause. It is a formal review of your use of Oracle programs, opened by a notice letter, run by an Oracle team and closed by a commercial settlement.

It is not a government action, a legal proceeding or an accounting audit. No external authority stands behind it. The force behind it is the agreement, plus Oracle's right to end your support, licenses or agreement if fees for excess use go unpaid.

Who runs the audit at Oracle today?

For years the audit team was License Management Services, which is why buyers still search for an "Oracle LMS audit". The work now sits under Oracle's Global Licensing and Advisory Services name, as our note on what changed between LMS and GLAS explains.

What draws a letter is covered in our analysis of audit triggers, and the first week in the audit letter guide.

Is the letter from Oracle a formal audit notice?

It is a formal notice only if it cites the audit clause in your agreement and starts a notice period. Five kinds of message arrive in audit language, and only the first creates obligations under the clause.

Why a voluntary review gives Oracle more room than an audit

A formal audit comes with a notice period, a negotiable scope and a limit on disruption to your business. A voluntary review has none of these. You hand over data of audit quality with no defined close and no written limit on how Oracle uses it, which is why review invitations are often worded to read like an obligation.

What does the Oracle audit clause actually say?

The audit clause is one paragraph that grants the right on 45 days written notice and then sets five conditions. The wording varies by agreement version, so work from your executed copy, not the standard form.

What the clause leaves out

The gaps do as much work as the text, and Oracle's practice has filled each one.

• No data deadline. The 45 days runs before the audit starts, so the return schedule is yours to propose.
• No counting rules. Metrics and the core factor sit in your ordering documents and the program documentation.
• No contractual policy documents. Oracle's partitioning policy says it is for educational purposes only and may not be incorporated into any contract. The cloud policy documents are policy too.
• No reach beyond signatories. The right binds the entities that signed, which matters in every group structure.
• No defined end. Nothing in the clause tells Oracle when to stop.

Do you have to run Oracle's audit scripts?

It depends on the paper you signed. Older OLSA versions oblige cooperation but name no script, so the method is negotiable. Under an Oracle Master Agreement dated April 2019 or later, assistance "shall include" running Oracle's data measurement tools. In both cases, agree the scope in writing first, because data released under a vague scope cannot be recalled.

What are the three questions every Oracle audit asks?

Every Oracle audit, whatever the product, reduces to three questions asked in order.

1. What is installed and in use? Deployment facts, where Oracle's scripts usually give it better data than you have.
2. How is each deployment counted? The metric, the edition, the core factor and the virtualization boundary. Counting is contract interpretation, and most claims fall apart here.
3. What do your ordering documents entitle you to? Quantities, metrics, territories and negotiated special terms, where you always hold the better data if you can find it.

Prepare in the same order: your own inventory for question one, written counting positions on core factors and virtualization for question two, and an entitlement file for question three.

How much can the counting question be worth?

Oracle's standard definition licenses "all processors where the Oracle programs are installed and/or running", multiplied by the core factor. Its partitioning policy lists VMware as soft partitioning, so auditors tend to count every host a database could run on. The gap between the two readings is often the whole claim.

The 96 extra licenses also carry $1,003,200 a year in support at the $10,450 list rate. Any settlement discount is negotiated from the figure your counting position produces, so win the count first. Our Oracle on VMware guide covers the evidence behind the narrower reading.

How to check your own position before Oracle does

• Feature usage. Query DBA_FEATURE_USAGE_STATISTICS, or run Oracle's options_packs_usage_statistics.sql from My Oracle Support. Our feature usage guide explains the output.
• Past script output. Read earlier results the way Oracle will, with our guide to LMS script output.
• Virtual infrastructure. Export cluster, host and VM placement from vCenter, with vMotion and DRS settings, for every cluster running Oracle.
• Management packs. Opening Diagnostics or Tuning Pack pages in Enterprise Manager, or running AWR reports, records usage Oracle will count.
• Entitlements. Gather every ordering document, support identifier and amendment, then reconcile contracts to deployment.

What have we seen in Oracle audits in 2024 and 2025?

Across the 60 to 80 Oracle audit and license review engagements that Fredrik Filipsson and our Oracle practice worked in 2024 and 2025, the first week set the tone for everything after it.

• About 1 in 3 letters were not audits. They were sales led license reviews or Java outreach written in audit language.
• Pace decided scope. Where the customer set the pace, letter to agreed written scope took 6 to 10 weeks. Where Oracle set it, scripts were running inside 2 weeks and the scope was never written down.
• Few had read their own clause. In most engagements no one on the customer side had read it before the letter landed, and several could not find the signed agreement at all.
• The interference limit went unused. Customers almost never invoked it.

The case against cooperating fast to earn goodwill

A common piece of advice is to run the scripts quickly and hand over everything to show good faith. We disagree, because in our engagements the audits Oracle paced ran longest, and speed without a written scope only gives Oracle more data to search. Cooperate fully, on a scope and schedule you have agreed in writing.

Scope is negotiated before a single script runs, or it is not negotiated at all.

How do you control the scope and pace of an Oracle audit?

Put both in writing before any data leaves your network. The clause gives Oracle a defined start and you a defined obligation, but no defined end, and Oracle has no financial reason to finish quickly. Draft the scope letter during the 45 day notice period and do not let collection start until Oracle has agreed it in writing.

What to put in the scope letter

• Legal entities. Name the signatories in scope, so affiliates that never signed stay out.
• Programs and environments. List the programs, support identifiers and environments under review.
• Collection method. State which tools run, on which servers, and who runs them.
• Data schedule. Set your own return dates, since the clause sets none.
• Use of data. Limit use to this audit. An OMA already puts audit data and findings under the nondisclosure section of the General Terms. Under an older OLSA, ask for the same protection in writing.
• Close. Define the end as a written closure letter for the programs and period reviewed.

If you are negotiating terms before any audit, some of these limits can go into the clause itself. See our note on redlining the audit clause, and when findings arrive, our guide to challenging audit findings.

What will Oracle's audit team say, and how should you reply?

These lines come up in most audits, and each has a reply grounded in your paper.

• "We need the scripts back within two weeks." The clause sets no data deadline. You will propose a schedule once scope is agreed in writing.
• "This review is routine for every customer." Ask whether Oracle is exercising its audit right. If not, the review is voluntary.
• "Your VMware cluster means every host needs licensing." Ask for the contractual basis, since the partitioning policy says it is not part of any contract.
• "Your subsidiaries are in scope." Ask which agreement those entities signed and what your ordering documents say about who may use the licenses.

What to do next

1. Classify the letter. Check whether it cites the audit clause and starts a notice period. If not, ask in writing.
2. Read your executed clause. Use the signed agreement with its negotiated changes, and note whether it is an OLSA or an OMA with the tools wording.
3. Agree scope in writing. Settle entities, programs, environments and collection method before any script runs.
4. Propose the data schedule. Put your dates in the scope letter.
5. Build the entitlement file. Collect every ordering document and amendment now, because question three is the one you should win.
6. Bring in help early. Our Oracle practice runs the response with you, from the first reply to the closure letter.

Frequently asked questions