Oracle sues Envisage claiming unauthorized database use amid licensing crackdown
Fiscal year end forecast: Cloudy with a chance of litigation
Oracle this month filed a lawsuit against Envisage Technologies, claiming the Bloomington, Indiana-based IT firm has been violating its copyrights by running Oracle Database on Amazon Web Services in an improper way.
The complaint [PDF], filed in a US federal district court in California, alleges Envisage has been operating its Acadis Readiness Suite – a collection of training and compliance software aimed at public-safety officials – in conjunction with a version of Oracle Database Standard Edition 1 (SE1) from 2006 hosted by Amazon in its cloud.
Envisage, Oracle claims, deploys its applications on Amazon Relational Database Service (Amazon RDS) without the appropriate license, serving more than 2m public safety professionals (police officers, firefighters, etc) and over 11,000 government agencies. That is to say, Envisage uses a version of Oracle Database hosted on Amazon RDS, and Oracle doesn't believe this is correctly licensed.
"When an Amazon RDS customer uses Oracle Database for which it has a license purchased directly from Oracle, Amazon requires that RDS customer to have a supported license to at least Oracle Database SE2, regardless of the number of processors used by the customer," the complaint says. "Further, for instances utilizing more than eight CPUs, Oracle’s licensing requires an Amazon RDS customer to have a license to Oracle Database EE."
Envisage, it's said, has only a license for Oracle Database SE1, which Oracle stopped selling in 2015. The company paid $8,500 for a perpetual license and support services as an initial pilot for one account.
Oracle says it approached Envisage in March after it became concerned that the firm was flouting its copyrights. Envisage initially agreed to discussions but subsequently refused to continue talking to Oracle, informing the database giant that "absent a lawsuit, it would not engage in discussion regarding its use of Oracle Database or its licenses to the software."
Big Red's not just after back fees
That's now arrived and Oracle estimates Envisage's alleged license violation has cost it more than $3m in licensing and annual support fees. What's more, Oracle says Envisage has generated profits through the unauthorized use of its database – money that the database biz says it is entitled to, along with statutory damages under copyright law.
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Oracle has a reputation for enthusiastically enforcing its software licenses and in March, Nathan Biggs, CEO of House of Brick Technologies, a Nebraska-based IT consultancy that's part of OpsCompass, said that the database giant recently "started a new sales campaign where they are reaching out to AWS RDS-License Included (RDS-LI) customers to harass them about their use of Oracle software through AWS."
AWS offers two licensing options for RDS: License Included (LI), in which AWS licenses the Oracle software and its cloud customer is expected to comply with the limitations spelled out in the section 10.3.1 of the AWS terms of service; and Bring-Your-Own-License (BYOL), in which the AWS customer is required to have a separate valid license from Oracle.
According to Biggs, Oracle's sales campaign, a common revenue generation tactic as the company's fiscal year end (May 31, 2021) approaches, involves claiming that customers' application and usage of AWS RDS-LI violates the AWS terms of service and insisting that a switch to RDS-BYOL or a move to Oracle Cloud will save money.
"The first email, or possibly subsequent emails may become very aggressive, with threats of legal action against the customer," warned Biggs.
Envisage did not respond to a request for comment.
The Register has heard that over the past 12 months Oracle has been getting more aggressive about compliance.
Oracle's lawsuit doesn't make clear what the alleged license violations might be but it suggests that Envisage is running its software in a traditional shared AWS environment rather than on dedicated hardware.
If Envisage is relying on AWS RDS-LI, AWS's terms don't allow application hosting. But if the company is relying on RDS-BYOL, the only way to host cloud applications is through the Oracle Partner Network Agreement and appropriate amendments rather than the standard agreement. And at that point, there are CPU limitations.
In its lawsuit, Oracle claims, "On information and belief, to provide its software and services as advertised, Envisage is running Oracle Database on eight or more processors as an Amazon RDS customer."
It's not clear how Oracle came to this conclusion and the complaint doesn't state whether the company knows exactly how many CPUs Envisage is using.
Interestingly, there's no mention of a license audit, something Oracle has a right to demand under the terms of its own license (RDS-BYOL) but not under RDS-LI.
Envisage also faces a potential problem: Oracle's court filing indicates the company has promised customers that it will be using recent Oracle technology that it allegedly hasn't licensed. If Envisage is misrepresenting its technology, that would not be actionable by Oracle. The company's customers, however, would have standing to sue.
In the end, the case is likely to settle quietly, under NDA, if there's any merit to Oracle's claims. ®