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.
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.”
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. ®
Nearly a year after he’d been laid off because of Covid, my dad – a jubilant, always-smiling, 58-year-old Michigander best known for befriending everyone he meets – told me he wanted to go back to work.
Specifically, he wanted to work at Costco.
“OK,” I said, thinking: that is weirdly particular. “You’ll need a résumé. And, God, a different email. Not that Yahoo one you’ve had since before I was born.”
“I want to work on my feet,” he told me. “I want to work somewhere that appreciates me until I can retire. Can you help me apply?”
We’d been in Florida for a week, caring for my grandparents, and I’d started waking up at ungodly hours to accompany him on his five-mile morning walk. It had been six years since I’d moved out, and I missed him. Helping him find a job felt like the least I could do.
After a year of unemployment, Dad had hunted, fished, landscaped and DIYed himself to death. He was bored. He had worked all his life – first as a newspaper delivery boy, then a grocery store clerk, an automotive plant supervisor, a janitor and, for the past decade, a materials coordinator for a local hospital, until last April, when the hospital initiated mass layoffs facing a budget deficit from Covid.
There were other places that seemed ideal to him: delivering packages for UPS or FedEx, he reasoned, meant he’d get to move around. But he’d grown up only 15 minutes from our local Costco, and had heard their reputation for treating their employees well. With no college degree and a lifetime of working thankless jobs, a big-box store offering healthcare, paid time off and a decent work culture sounded like the dream.
“OK,” I promised. “We’ll apply tonight.”
And then I opened Twitter. I fired off a few funny tweets explaining my dad had been laid off due to Covid and really, really wanted to work for Costco.
In retrospect, I probably should’ve asked my dad if it was all right to tweet his job-hunting status.
I was hoping people would get a kick out of it. At best, maybe someone might have connections to a local store. I added a few more tweets to the thread, fondly joking about needing to fix his resumé, and included a picture of him in all of his Costco-hopefulness.
And then I forgot about it.
Until I logged into Facebook, and had a message request from an unfamiliar name.
A manager of a local Costco had contacted me. The company’s chief executive, Craig Jelinek, had somehow found my dad’s tweets, emailed several Michigan stores, and suggested they bring him in for an interview.
He ran a store 40 minutes away, but, he said, if my dad wanted to work at a different location, he’d be happy to give their store manager a call.
I freaked out.
I called my dad, who didn’t answer, texted him a screenshot, and called him again. As someone who only FaceTimes by accident, he didn’t really understand why I was freaking out. The sheer ridiculousness of a random tweet making it to the desk of the Costco chief executive mostly escaped him.
“Dad,” I said. “This is nuts. They’re going to hire you.”
“Maybe,” he said. “I’m not sure. But I’ll keep my fingers crossed.”
The next day, while jumping between meetings and client work, I refreshed my phone obsessively. When I got a text from my dad, I leapt on it, hoping to hear interview news. He had an interview.
“And do me a favor,” he said. “Don’t put that in a tweet.”
I laughed and promised I wouldn’t.
He called me after, bubbling over with excitement. It’d gone well, he thought. He was impressed by the fact that many of the staff had stayed on for years. He told me – somewhat maddeningly – that he’d avoided the subject of the tweets because he “didn’t want to get into all that” which was Dad-speak for “I am still very confused by that part, so I figured I’d best leave it alone”.
I congratulated him, and in his trademark style, he said: “Well, I might not get the job. But at least I tried.”
They called him in for a second interview, and then we heard nothing. But last Tuesday, a text from my dad popped up from my phone. It was just a picture, and the words: thank you. A picture of his new Costco badge.
He’d been hired part-time, starting in two days. I asked his permission to share on Twitter.
“Sure,” he said. “Not sure why people would care, though. It’s just a job.”
The social media explosion that followed was surprisingly pleasant. Some expressed that their parents had also, after a lifetime of working, found joy in working for big-box stores where they had the freedom to move around and talk to customers. A few hundred informed me the story made them cry. Some asked for his walleye fishing spot. (They’re out of luck, because he won’t even tell me.)
Mostly, after a nightmare year of record unemployment rates and unprecedented grief, it seemed people were just happy to share in a moment of weird, collective joy on a website often aptly described as a cesspool.
During his break on his first day, he called to tell me it had gone well. He liked his co-workers, and was looking forward to having a job working on his feet. The past year has not been a kind one to my family; like many, we didn’t emerge from the pandemic without the loss of loved ones. It’s a gift to have this odd, wonderful, weird spark of joy amid a time of grief and chaos.
It’s extra lovely that it happened to my dad.
Before he went back to work, Dad had one more detail for me. He laughed as he said it. He said towards the end of his first shift, during a tour of the store, a bakery employee had off-handedly mentioned: “I wonder when they’ll hire the Twitter guy.”
To my dad’s utter delight, he got to say: I am the Twitter guy.
An IT contractor has lost an appeal [PDF] which found he was an employee in the eyes of HMRC, with the judges agreeing he fell under the new IR35 off-payroll tax rules.
Robert Lee, working as a contractor under the company name Northern Light Solutions, had challenged an earlier First-tier Tribunal ruling which found his work for the Nationwide Building Society to be “employment” for tax purposes.
But his appeal in the Upper Tribunal on 6 and 7 May failed, partly because his legal team did not convince the judges that the clauses in his contract suggesting he and the agencies had the “right” to offer a substitute IT professional did in fact mean such a substitution could happen.
The ruling meant Lee would have to pay an additional £74,523 in income tax and National Insurance Contributions.
The tribunal found Lee, under the terms of the “hypothetical contract”, was paid a “day rate in the region of £450 and required to work a professional week, which for the Clarity Contracts is specified to be 7.5 hours a day.”
A contractor or agency’s right to substitute their work to another person of equivalent skill has been held as a key signal that the contractor is self-employed, rather than a “disguised employee”, and thus can be considered as falling outside of the IR35 rules.
Reforms to the IR35 off-payroll working rules, which critics argue classes contractors as paid employees without the employment benefits, were introduced in the private sector in April this year, after a year’s delay due to COVID-19. The new rules put certain liabilities on employers and make it more difficult for contractors to place themselves outside the revamped tax laws. Some employers – including BAE systems – have introduced blanket bans on contractors working outside IR35.
Lee worked for Nationwide through his Northern Light agency, which contracted with another agency, AxPO, which in turn contracted with the building society itself between 2012 and 2014.
What is IR35?
IR35 is a tax reform that was unveiled in 1999 by the UK tax authorities. The latest regulation change will force medium and large private sector businesses in the UK to set the tax status of their contractors and freelancers. Previously this was set by the contractors themselves.
Those workers found to be within the scope of the legislation – i.e. inside IR35 – will have to pay more tax than they might expect, despite not receiving benefits enjoyed by full-time employees, such as holiday or sick pay, pension, or parental leave.
The reforms are part of the government’s crackdown on so-called “disguised employment,” where workers behave as employees but avoid paying regular income tax and national income contributions by billing for their services through personal service companies (PSCs), which are taxed at lower corporate rates.
Critics say that being inside IR35 is essentially “no-rights employment,” meaning techies are paid and taxed similarly to regular employees but do not receive any of the security or protections that go along with permanent employment.
Contractors within IR35 can be hired and fired at will and without reason. The measure came into effect in the public sector in 2017. The British government hoped the reforms would recoup £440m by bringing 20,000 contractors in line.
The implementation in that area has been described as an “utter shambles.” HMRC reckons that only one in 10 contractors in the private sector who should be paying tax under the current rules are doing so correctly. It estimates the reforms will recoup £1.2bn a year by 2023.
Barrister Michael Collins, acting for Lee, had earlier argued that the “right of substitution meant that the hypothetical contracts could not be a contract of employment.”
Although the First-tier Tribunal had found that there was a right to provide a substitute in these contracts, this right was qualified. The tribunal found that Nationwide would have had to agree to a substitution, and that it was under “no obligation to accept such a replacement if in [its] reasonable opinion such replacement was not wholly suitable.”
The ruling said that “in practice it would be impractical for [Nationwide] to accept substitutes due to the necessary restrictions on access to [Nationwide’s] systems and restricted site access. Any substitute would need to go through vetting checks and an interview and get up to speed on the project.”
The Justices found a hypothetical contract – one that would have described the agreement between Lee and Nationwide – showed that his relationship with the building society was one of employment and the tribunal dismissed the appeal.
Lessons from the case include the need to effectively describe and communicate working practices at an early stage in the relationship, according to Dave Chaplin, CEO of ContractorCalculator, a firm advising contractors on their IR35 status.
Chaplin also claimed HMRC’s evidence from the notes of meetings, which underpinned several aspects of the ruling, appears to frame the facts relating to substitution in a manner that does not align with what really happens on the ground in IT projects. It was therefore important to keep a good, evidenced audit trail on projects to establish off-payroll working, he said.
“Lee’s contract did include a legitimate unfettered right of substitution, but it was never exercised, and the client never gave witness evidence to back it up as a genuine right. The judges chose to disregard those substitution clauses. Substitution is no silver bullet to definitively proving a worker is not employed unless it has taken place,” Chaplin said. ®
It received bids up to $4bn from investors but around $1bn was sold in the end. The company has not commented on the investments.
Shopify, Sequoia Capital, Silver Lake and Capital Group purchased stakes in the company as part of this latest transaction, according to the report. In some cases, these investors increased their existing holdings in the fintech giant.
Meanwhile long-standing employees may have sold their shares in the company before their share options expire, which is typically a 10-year window.
Rumours and speculation continue to swirl around Stripe going public with 2022 touted as the year that the company makes the leap, 12 years after it was founded. For shareholders, a Stripe flotation could make for a hefty payday. For now, investors are looking to shore up bigger stakes in the company.
The company’s recent moves give some indication of the broad plans that the company has.
Seemingly every week the company is rolling our new or expanded products that go beyond its core payments processing functions. On Monday (14 June), it released Stripe Identity, an AI-powered tool for verifying a person’s identity in a payment transaction and last week it released Stripe Tax to automate businesses’ calculation and collecting of VAT and sales taxes.
Stripe has a mission to be an all-encompassing payments and banking infrastructure company. It has become a frequent investor in fintech start-ups in recent years as well, keeping tabs on what might be the next big thing in finance, payments and banking tech.