Anytime a business goes through a merger/acquisition or divestiture, managing the inventory of Oracle licenses carefully is important. Failure to do so can lead to compliance and financial exposures, as well as missed opportunities for optimizing the investment in Oracle licenses.In the case of a merger/acquisition, the most important question to ask is if the acquiring entity’s Oracle agreements include acquisitions and subsidiaries in the scope. If that’s not the case, then licenses may not be freely transferable between the parent and acquired entity. The situation becomes more complicated when multiple agreements and CSI numbers are involved across different geographic regions. Resolving agreement scope and the related license sets requires expertise and experience.
On the other hand, another all to common pitfall is when businesses divest a unit and decide to carve out a portion of the Oracle licenses and assign them to the divested entity. This requires working with Oracle Sales to execute a formal license assignment agreement that transfers the licenses from the parent to the divested entity. We have seen, time and again, that customers go through this process without due diligence and sufficient assessment of the actual needs and usage of Oracle software at both resulting parties. This results in compliance exposure for both parties. Without a proper assessment of the license need at the both, the parent and divested entity post-divestiture, both entities risk being non-compliant and/or have their inventory of Oracle licenses poorly optimized and leading to further drain on the IT budget in the form of unnecessary support for Oracle software.
Pro-tip: pay close attention to the entity scope and coverage for subsidiaries and acquisitions. In the event of a divestiture, perform a proper internal software asset assessment for Oracle software to make sure that sufficient and optimized quantities of Oracle licenses are being assigned form the parent to the divested entity.