CERNER CUSTOMERS BEWARE: TIME TO GET UP TO SPEED AND UNDERSTAND ORACLE’S SOFTWARE AUDIT PLAYBOOK

​By Pam Fulmer

In December of 2021, Oracle announced its acquisition of healthcare giant, Cerner Corporation.  The acquisition is Oracle’s largest to date, and will provide a big boost to Oracle in the healthcare and specifically the Electronic Medical Records (“EMR”) market once the deal closes, most likely in 2022.  Current Cerner customers are well advised to break out their Cerner license agreements and take steps now to analyze how Oracle may bring its aggressive software audit playbook to the interpretation of Cerner contracts.
 
According to press reports, Cerner will apparently remain a free-standing business unit within Oracle, but it would not be a surprise to anyone if Oracle’s notorious audit arm LMS (now known as GLAS) becomes involved in software audits of Cerner customers.  As Oracle seeks to grow its cloud business, it is our opinion that Oracle may seek to use aggressive software audits to get Cerner customers out of Cerner paper and into Oracle agreements, such as Oracle’s Unlimited License Agreements with its pernicious annual maintenance & support obligations that can never be reduced.  We also anticipate that Oracle may use software audits to push Cerner customers to the Oracle cloud, as it seeks to catch up with AWS and other cloud providers.
 
Current Cerner customers should consider seeking the help of legal counsel and technical experts familiar with Oracle’s audit playbook, to ensure that they are compliant with their existing license agreements.  Even if Cerner licensees believe that they are compliant, they would be well served to seek professional advice as to how Oracle might interpret certain Cerner contractual provisions, and begin developing strategies to mitigate such assertions.
 
Cerner customers have some lead time now, which they should use to prepare their software audit defenses, well before the inevitable Oracle audit notice is issued.
 
Tactical Law is a boutique law firm located in the San Francisco Bay Area.  We are very familiar with Oracle's aggressive software audit tactics, and we assist our clients in pushing back on overreaching Oracle audit assertions.