As Walter says, sales tactics can be accompanied by veiled references to the prospect of an audit – which some customers find intimidating – if a sale is not progressing the way Oracle would like.

Oracle has the right to charge for its intellectual property, according to its contracts, and it can also check customers are in compliance with those contracts. But customers can feel such uncertainty about the process that they might not get the best deal for them.

Palisade’s Guarente says the end of the year could see Oracle more likely to mention audits, particularly when people are trying to exit agreements such as ULAs, which let customers “certify” their way out of buying perpetual licenses.

“A lot of people are talking about ULAs. Companies are very worried about exiting these things because they think they’re going to be audited. Oracle will audit you to get money. It is something that has to be taken into account. But if you are in compliance with your Oracle contracts, who cares if you get audited? In that respect, it’s an empty threat.”

However, companies that were not sure of their licensing position could be vulnerable to Oracle’s sales tactics. “Being unsure: This is a really powerful tool that Oracle uses. Fear, uncertainty, and doubt really drive a lot of procurement decisions. People think, ‘I buy this because I don’t know what’ll happen if I don’t buy it’.”

House of Brick CEO Nathan Biggs reckons the threat of a formal audit had receded this year, but it was still a tactic Oracle could use.

“In past years, the threat of a formal audit was always a lever to try to get the customer to do something to move toward a purchase. This year, for some reason, the formal audit has been less of a threat, and the formal audit activity has probably decreased a little bit with our customers.”

However, Oracle is getting more subtle in its approach to the relationships between audits, compliance, and sales, he says. “What they’re doing this year is using the audit team – the License Management Services people – and promising customers it’s not an audit, but instead it’s just a process to make sure that they are in compliance. Customers sometimes think that that’s a better deal. But in many cases it’s not. They have more protections with their license agreement if they are under a formal audit than if they are simply under an informal LMS review that doesn’t have the same backing of the license agreement.”

However they are framed, informal audits mean customers should take care about the information they share with Oracle as they risk weakening their negotiating position further down the line.

“We’ve seen examples with customers where the Oracle salesperson will approach anybody throughout the organization,” Biggs says. “It might be an executive, it might even be a DBA or system administrator, and they’ll say that they believe that they’re out of compliance with some aspect of the licensing and Oracle needs information quickly.”

But if the management or legal team had been dealing with Oracle, they would never have shared such a level of information, he adds.

“The customer is in a position where they have to recover from this information that was sent. In many cases, Oracle is taking this information out of context. They’re not giving it the full analysis that we would expect in a formal audit, but rather they’re using pieces of the information they receive to try and paint the customer in a position of non-compliance with them although a deeper analysis would find they are not out of compliance at all.”