Struggling with Oracle licensing? Dump your systems integrator, suggests DVLA CTO

Systems integrators have no motive to reduce your licence footprint, says Iain Patterson

Customers of Oracle, and other traditional licence-based software vendors, are becoming increasingly tired of the way that they are treated - at least that seems to be the general consensus from CIOs that Computing has spoken to about life with SAP, IBM, Microsoft and so on.

One report, looking into Oracle's licensing methods, found that customers were "hostile and filled with deep-rooted mistrust", and Computing more recently questioned whether customers were treated more like cash cows to be milked until they drop - or valued and treated fairly.

But according to the CTO of the Driver and Vehicle Licensing Agency (DVLA), Iain Patterson, that could all be about to change - but it depends on customers taking a different approach to how they handle their licences.

Speaking to Computing at Oracle's OpenWorld event in San Francisco this week, Patterson explained that Oracle has had a presence at the DVLA for "forever and a day". When he joined the organisation, it was bringing back IT in-house after outsourcing it to a combination of Fujitsu, IBM and PwC over the past 22 years.

Within that 22-year period, Oracle's presence had steadily grown.

Patterson decided to look at the capability he had in-house - where he had 300 technical people - as well as in the systems integrator layer between DVLA and its suppliers, where he said there were more "watchers, and some doers" out of the 600 people under contract. The aim was to more fully understand their capabilities.

"I wanted to look at the technology and what's there, what things I had to do as far as making changes, and what were the rules of the game - so reading through the contract," he says.

Patterson advises people to scrutinise contracts themselves rather than getting someone else to do it for them.

"It's boring, but read through the documents and understand [them]. Because you've got something so old, people believe [whatever they're told] as it's been handed down," he suggests.

"Understand your team, be transparent with your agenda, understand your technology landscape and contract constraints and look at your supply chain to see who are your true suppliers - and understand the strategies of all of them, because when the contract was signed, their business strategy and yours were not the same [as they are now]...

"Then you change in such a way that it is aligned to your supplier strategies; if not you're getting rid of your suppliers, and if it is aligned to your suppliers you may be getting grid of your systems integrators... [the strategy] has to be aligned to your capabilities," he says.

After spending time rebuilding his team, Patterson then set out to renegotiate DVLA's contract with Oracle.

"So as everybody does, you go to one of these true-up sessions where you have to go back and pay for the sins of licences that you've bought. So you could be a hostage to a fortune," he says.

Patterson and his team had a "frank" conversation with Oracle during which Patterson said the following to the software giant:

"I understand we can have a true-up of this; I understand our systems integrators have carried on persisting with licences and [we're] not using them - they've told you what we want, and we've paid for it... they've taken a percentage on top and there's no incentive for them to reduce the licence footprint. They know we've got tons of money and we just keep giving more money to keep paying for it.

"So I need your help to reduce that footprint as I want to move away from my legacy environment. I'm going to be very transparent around it; there will be no secrets around our strategy and it will be out in the open. I want you to reciprocate. I don't believe you want to stay in this legacy world, I know you want to move forward because everybody else is - it's not in your interests to stay static in a business where software is changing at the rate of lightspeed and you have to compete. Either you are in that space or there are a lot of people that are going to be - or are right now that I can talk to."

Patterson emphasised that this wasn't blackmail, but it was just a "realisation" of the situation.

Oracle didn't hesitate to respond - but neither did the systems integrator (SI).

"I was told by the SI that we've got a problem here, because Oracle won't play ball because my licensing model was based on having Oracle on-premise rather than [in] a virtual environment," he says.

"But I've got a direct line through to Oracle and that wasn't the case - that we have to licence every machine," he adds.

He suggests that it isn't just customers who get agitated by systems integrators, but software suppliers too, because the SIs buy and modify the product.

He used the example of Fujitsu, who had a back-office systems contract with DVLA.

"They had taken an Oracle core product - something that works everywhere else in the world - and modified it - because by modifying the product, it sustains your longevity within your organisation and it means you make money out of the upgrades," Patterson says.

"I'm not saying every [SI] does that - sometimes they do it because the client instructs it," he adds.

But the dealings with Oracle were "high risk", according to Patterson, and the matter was subject to Cabinet Office discussions too. He told the Cabinet Office that he was confident that the DVLA would come to an agreement directly with Oracle.

"A lot of people have talked about the fact that people would be blackmailed by Oracle to change to the Oracle cloud because [they] use Oracle products, but I spoke to Oracle and that wasn't the case, they were open-minded and very progressive in the licence approach. They recognised what we're doing and that our strategy wasn't going to change... it was only a matter of time before you'd start changing products because you can't hold people to ransom over their licence," Patterson explains.

The matter was dealt with at the highest level - with Oracle CEO Safra Catz involved in the conversation too.

Eventually, the agreement meant that the firm was not penalised for having Oracle sitting in another company's infrastructure-as-a-service (IaaS) solution - the firm had been approached by IBM and Fujitsu to take on a lot of on-premise infrastructure but Patterson instead opted to go for IaaS provider Skyscape through the G-Cloud.

The new agreement with Oracle also meant that DVLA could migrate non-Oracle products such as NoSQL database MongoDB into an Oracle cloud if it wanted to.

"What I wanted to do was have a multitude of IaaS and PaaS providers, with SaaS provision as well, and the ability to move about from company to company," he says.

From Oracle's point of view, the account manager who worked with DVLA on the contract said that the software vendor "wanted to make sure it was part of the future journey rather than a roadblock or a commercial conversation that wasn't going to go anywhere".

The account manager said the ability for DVLA to have a third party cloud within the Oracle cloud was "breaking ground".

DVLA has been on this journey with Oracle over the past 12 months and it is still ongoing.

"What is important is that we recognise that this is a blueprint for government; there is a huge amount of Oracle there," explains Patterson.

"There is the Defra UnITy programme [the Department for the Environment, Food and Rural Affairs network-wide attempt to bring all its IT together] for example, and the same thing is going to happen there, so I've been asked to talk to them over some of the things we've done."

He adds that there has to be a balancing act, as Oracle does rely on its licensing model to pull in a lot of its revenue.

But does Patterson believe that Oracle has finally changed the way it approaches licensing?

Yes and no. It's more the fact that he believes DVLA approached its dealings with Oracle in the right way - cutting out the "middle man" and being upfront. But Patterson also thinks that, perhaps, it was good timing, as Oracle may also be shifting its stance as it tries to sell customers its new products.

"It makes sense to talk to people that are there that understand their business and understand my priorities and my business," he says.

He adds that there is only one way that Oracle is going to sell him more products - and this is by hearing him out.

"It's [now] the day of the consumer rather than the vendor," declares Patterson.

The balance of power, it seems, is finally shifting.