Keep reading software terms and conditions!

06 jul '17 - Mark van Wolferen - share: LinkedIN Mail
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Software vendors such as Oracle change their online terms and conditions regularly. This often happens without their customers even knowing it, with great financial risks for these customers as a result.

Software providers increasingly refer to general, standardized conditions on their website in their contracts. Oracle is a good example of this. In the case of cloud software, there is a reference to an URL for almost all conditions. It goes without saying that you read the online terms before you sign a new whale of a contract. Only then you know exactly how you are entitled to use the software you purchase. However, it is equally important to monitor the online terms after signing the contract.

Bit on the shifty side

Conditions can also be changed later after signing a contract - and that’s something not everyone is aware of. Even though it might sound a bit shifty at first, there is a fairly good explanation for changing the terms. Things that do not exist - such as new legislation or new technology - cannot be defined contractually, but you would like to keep them in mind for the future. For example, in a car rental agreement, there is no question whether you can or can not drive on water. That's not what the car is designed to do. If this becomes technically possible, then you, as a renter, would want to know what you're in for. Can I drive on water under any conditions? When will I be liable for damage? Or even: Should my windows be open or closed when I drive on water?

This also applies to software. In order to prevent any new software contracts from having to be renegotiated with thousands of companies, online conditions have been invented. Perhaps there's a new technology that may affect the way you can use certain Oracle software - think of the virtualization trend from a few years ago. Oracle can immediately add an additional clause to the online conditions. In theory, this way you always know where you stand and you can prevent compliance issues.

Over a hundred changes

The reality is more cumbersome. Software vendors seem to adjust their online terms and conditions continuously. In the last five months only, Oracle made over a hundred changes to the contract pages on its own website. Moreover, not every new clause has the same impact on every company. A clause about in which countries you may use certain software means something different for a municipality than for a multinational that operates in four continents. However, this is not always evident: because the terms apply to everyone, they are described in fairly general terms. Therefore, each change must also be interpreted from a, contractual, technical and financial point of view.

Additionally, the communication from software vendors on this matter is rather scarce. For consumer apps, a change is not to be missed: you receive a push message on your smartphone and you can continue only if you accept the new terms. That nobody reads those conditions is another discussion, but at least the notification is in your face. Oracle on the other hand, announces a change on its website and puts it in the newsletter or product updates. The Oracle bashers will immediately say that Oracle deliberately keeps it vague, to later make allegations, but that’s jumping to conclusions. Communication could be more concise, absolutely. But it simply is impossible for Oracle to individually inform every company about each change. Moreover, Oracle does not sell all its software itself, so it doesn’t know exactly who uses what. Also, not every change is relevant to everyone, as shown in the example above.

Claim

But that one change can have a huge impact. It may happen that you suddenly violate Oracle's agreements without even knowing it. For every IT manager who wants to use purchased software correctly and does not want to have a claim from Oracle on his plate, there's only one thing to do: take action. This means that you actively monitor the changes in the online terms and conditions, interpret them and then act upon them.

This applies to Oracle, but also to other major software vendors such as Microsoft, SAP and IBM. It is true that the wording is often generic and communication is limited, but whatever you think of this approach: if you use their services, you can simply not ignore their terms and conditions. Anyone who doubts this, I would like to refer to this episode of South Park. You never know what can happen if you don’t read the terms.

Oracle Database and Hardware Infrastructure

The required number of licenses for Oracle’s Database programs are (almost) at all times related to the hardware infrastructure on which the software is installed. Incorrect interpretation or understanding of whether the software is deemed to be installed and how the installed software should be licensed in a certain specific hardware infrastructure is by far the number 1 license compliance issue. 

Oracle Database and Hardware Infrastructure

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