As one of the oldest and largest software providers in the world, Oracle’s applications and databases are mission-critical and entrenched within the enterprise—tied to core financial, customer and corporate processes. What happens when companies want to move to their Oracle workloads to the cloud? For many, it can lead to costly licensing issues that delay or, worse, prevent cloud migration projects from moving forward.

We see this happen time and again, and it has caused considerable angst and confusion. To set the record straight, we spoke with Jim Ball, Navisite’s vice president of global alliances, who cleared up a few facts about Oracle licensing.

Fact: Oracle Mandates Compliance with Licensing Agreements.

Reality: It’s More of An Honor System.

Companies have a master service agreement in place with Oracle, where they purchase licenses that are consistent with their needs. However, customers don’t need to provide a key or proof of purchase for Oracle software, which means licenses are essentially managed via an honor system. As a result, it can be difficult to accurately track usage, and many companies inadvertently over-provision licenses to meet changing requirements and user demand.

Fact: Oracle Reserves the Right to Audit.

Reality: It’s All Too Easy to Be Found out Of Compliance.

Oracle has the right to audit and charge customers who are out of compliance. The issue is that many organizations are not clear on the terms of their service contract, which leads to compliance challenges and, ultimately, unexpected licensing fees. This creates enormous strife and stagnation. We’ve seen this when companies want to move to the public cloud. In order to migrate to AWS or Azure, they need to go through a license review. It’s a real Catch-22—cloud migration projects are held back due to audit and cost concerns. Yet, not moving forward has its own opportunity cost.

Fact: Oracle Provides Guidance Around Software Licensing.

Reality: It’s Important to Do Your Own Assessment.

Companies seeking guidance around licensing are often met with conflicting information from various sources. There is a significant lack of clarity around Oracle software entitlements and what customers need to purchase to maintain compliance. Many Oracle customers rely on guidance from Oracle’s sales force or partner network, which is helpful but not always impartial. The key is to do a pre-audit of your Oracle licenses, so you can assess your options. We’re frequently asked by our customers to do this through our cloud discovery and assessment process. Whatever the outcome, we want to make sure they can have informed discussions with Oracle and make their decisions from a position of knowledge.