Oracle Unlimited License Agreements – considerations for prospective buyers

By Paul Bullen, Senior License Consultant

In the vast and complicated world of Oracle licensing, you may have heard about Oracle Unlimited License Agreements (commonly known as ULAs). Not many people fully understand how these license agreements work and often we see businesses using ULAs who do not know how to get the most from them, or who have fundamental misunderstandings about their licensing.

This is the first in a series of blog posts based on Oracle ULA’s. Over the next few posts, we will describe what a ULA is and how to manage and declare one successfully. It should be noted that ULAs and Oracle licensing in general are very complicated and expert advice should be sought if you are considering, managing or declaring a ULA.  In addition to these blog posts, we have also just launched our Video Blog series on Oracle ULA’s.

So, what is a ULA?

A ULA allows you to use an unlimited amount of a defined set of products, for a specific period. At the end of the specified period, you declare your amount of usage which becomes your perpetual license – you end up with exactly the same type of license as you would if you had purchased ‘normal’ perpetual licenses.

So, you pay your license fee upfront (your support cost is always based on this license fee), you use as much of those products as you like, declare your usage and then own that number of licenses. This type of licensing is different from Enterprise License Agreements and typically Oracle ULAs only apply to Oracle technology products (not applications).

Let’s re-iterate some important points here:
1) You pay the license fee up-front, there is no ‘true up’, ever. Your annual support and maintenance fee is based on this license fee
2) You may use as much of the defined products as you like, without limit (you do occasionally see ‘capped’ ULAs but these are less common than truly unlimited ULAs)
3) You declare your usage and own that number of perpetual licenses
4) Your annual support and maintenance fees are based on the original license fee
5) There is no true-up (have I said that enough?)

Sounds good, doesn’t it? However, there are a few things to consider if you are thinking about choosing an Oracle ULA. Let’s take a look at a couple of the above key points in more detail:

The license fee: if you ask Oracle to provide you a quote for a ULA, expect them to take into account everything they know about your roadmap and planned usage of Oracle. Additionally, remember that you are going to be paying for the luxury of deploying as much software as you like, and this will attract a premium.

Inevitably, ULAs are almost always multi-million pound/dollar affairs – don’t expect to get one for £50k. You need to consider how much you are expecting to spend over the term: this can be a significant challenge considering the term is typically three years. Building a business case to justify spending £5m now rather than a total of £8m piecemeal over three years takes some foresight. You may know you have significant project plans in the pipeline, or your estate may be woefully out of date and ready for a wholesale capacity boost or technology refresh. More on this in a later blog post

Support fee: this is an interesting and key part of ULAs. It’s important to realise that any existing support for the products included in the ULA will be added to your new ULA support fee. Support and maintenance is, as ever, linked to the initial ULA license fee and the first year is paid up front. The license fee is a one-off capital payment. Support and maintenance, like normal perpetual licenses, is opex paid annually and typically subject to retail price index (RPI). So if your current Oracle Database Enterprise Edition support and maintenance cost is £200k per year, and your ULA (just for DB EE) costs £4m (support at 22%, giving £880k per year), your total new annual support will be £1.08m. This leads us nicely into…

What happens to my old licenses? Any licenses for products on the ULA will be ‘converted and replaced’- i.e. you have no rights to use these after your ULA starts. Not a problem: you have a ULA!

Use as much as you like: Really? —you can use as much of the products on the list as you like. Most ULAs are for a number of products: getting this requirement sorted at the time of negotiation is very important. Plus, you need to be aware that new products may be introduced during the course of the ULA which you would not be entitled to use under this agreement.

You need to think about your Oracle strategy: will your upgrade to and management of 11gR2 benefit in the long term with some of those shiny extra cost options or management packs? Does your Oracle strategy involve newer Oracle products?

The really tricky part is making sure that everyone who downloads, installs and uses Oracle software across the business only uses software that is part of the defined list of products. Whilst using the software, it is vital you track its deployment. We’ll come back to this in another post—it is a critical part of owning a ULA.

In the next post, we look at an example ULA, explain it further and we’ll review other considerations. In the meantime, please feel free to ask any questions below!

For more information, go to our website or listen to our short video blog.

Software License Reviews – Are you ready?

by Kenny Wilson, Group Commercial Director

With Oracle’s Q3 FY13 nearly done and dusted, and its full year point only a few months away, it’s not uncommon to see Oracle reaching out to its client base with requests for license reviews. This can often provide a useful insight into this industry giant’s performance going into Q4 – however more compelling, usually prompts considerable consternation and discomfort in the marketplace, even more so with those particular organisations under the spotlight.

Even if you believe you have a fully managed and controlled license estate, this type of vendor communication can set the heart racing of even the most experienced IT professionals. On the flip side, if you have always struggled as an organisation to maintain your software asset management process, then a request for a license review can cause untold stress, disruption and expense.

So, ask yourself – is your organisation ready for an Oracle license review? Would you know where to start? Where would you go to find the information the vendor is looking for and do you fully understand the implications of being over or, more worrying, under licensed.

In our day-to-day working with large enterprise organisations with expansive Oracle estates, we have witnessed the chaos a request for a vendor audit can cause. Our deep understanding of Oracle and its licensing complexities, including Unlimited License Agreements, has enabled us to assist with the entire process and ensure the best possible outcome for all parties. Our publication, ‘9 Critical Steps in Planning an Oracle Software License Review’ which is based upon many years of working with clients with complex licensing arrangements, will offer you an insight into how to prepare for a license audit and the first steps to take should you receive a request from the vendor.

As experts in Oracle licensing, optimisation and Oracle Software Asset Management, our Rocela Control™ service can also help you manage your Oracle estate on-going, thus minimising the stress and inconvenience of a future vendor audit and ensuring value for money in your software investment.

So, if you are under threat of an Oracle license audit and require independent Oracle advice, read our publication and contact us for assistance.

Oracle’s Acquisition Trail

Since 2005, Oracle’s M&A department has been busy – we have seen a total of 87 acquisitions covering database, middleware, applications, products, tools, server & storage to vendor specific solutions.

Why is this interesting? It’s interesting because this underpins the importance of knowing what software you have in your IT estate and how you manage it. An effective software asset management methodology is vital for managing all your ERP software vendors, however is of particular importance for Oracle and its ever growing list of acquired products.

Let’s just take a quick look at the list of companies Oracle has acquired (in no particular order);

Database
• Datascaler
• e-Test
• Innobase
• Moniforce
• m Valent
• Secerno
• Sleepycat
• Times Ten
• TripleHop

Middleware
• AmberPoint
• BEA
• Bharosa
• Bridgestream
• Captovation
• ClearApp
• Context Media
• Datanomic
• FatWire
• HyperRoll
• GoldenGate
• Java
• Oplix
• OcterString
• Passlogix
• Sigma Dynamics
• Silver Creek Systems
• Stellent
• Sunopsis
• Tacit Sofware
• Tangosol
• Thor Technologies

Applications
• AppForge
• Collective Intellect
• Haley
• InQuira
• Interlace Systems
• LogicalApps
• Market2Lead
• Ndevr
• RightNow
• SelectMinds
• Taleo
• TempoSoft
• Vitrue
• Eloqua (Dec 2012)

Product Lines
• Agile
• ATG
• Endeca
• Hyperion
• Involver
• PeopleSoft
• Primavera
• Siebel
• Skire
• Telephony@Work

Implementation and Integration Tools
• Global Knowledge Software (GKS)

Server & Storage Systems
• Ksplice
• Sun
• Virtual Iron

Communications & Media
• Convergin
• eServGlobal’s Universal Service Platform (USP)
• GoAhead
• HotSip
• MetaSolv Software
• Net4Call
• Netsure Telecom Limited
• Portal Software
• Sophoi
• Acme Packet (February 2013)

Engineering & Construction
• Primavera

Health Sciences

• ClearTrial
• Phase Forward
• Relsys

Industrial & Manufacturing
• Agile
• Conformia Software
• Demantra
• G-Log

Insurance
• AdminServer
• Skywire Software

Retail
• 360Commerce
• Advanced Visual Technology
• ProfitLogic
• Retek

Utilities
• LODESTAR
• SPL WorldGroup
• Data Raker (Dec 2012)

Infrastructure
• Xsigo

What is the perfect IT Support Team?

By Steve Graham, Senior Principal Consultant

Rocela OLet’s imagine for a moment it’s a perfect world and in that perfect world you have a large team of fully trained Oracle specialists lovingly managing the day to day health of your IT infrastructure, all day, all night, all year round.  They never take holidays, are never ill, have the capability to cope with any problem thrown at them and seem very happy in their work environment.

However we all know that it’s not a perfect world and that the scenario above is not possible, without costing a small fortune.  Staff costs for a start would be astronomical, never mind all those expensive specialist training courses!  Keeping your whole team up to date on all the changes, particularly within the Oracle environment would cost an arm and a leg.  And what if someone from the team leaves?  How much will it cost you to find a new team member and then train them to the required level of expertise?

Cost issues aside, what about managing workload coverage – if half of your team is away on one of those expensive training courses again, who is going to resolve that pesky Oracle performance issue which is causing untold user frustration?  Let’s also not forget that from time to time, we all need a holiday or have to take personal or sick leave – what do you do if you find yourself completely under resourced due to a bout of flu during a major IT project?

So, let’s consider the alternative.  IT Managers understand these issues and plan accordingly by outsourcing parts (or all) of their IT support.  An organisation may be content to maintain their core team of IT support personnel, but when it comes to the really complex Oracle issues that can stretch the capabilities of any in-house team, or providing extra support during a project, specialist consultancies such as Rocela can provide the reassurance of expert support.

One such area is health check services, particularly within the Oracle environment.  There are many scenario’s that require specialist Oracle assistance from time to time: validating 3rd party project plans, consulting on how to get more from your Oracle applications, recommendations on Oracle patch levels & versions, and diagnosing and resolving unresponsiveness within your Oracle systems, are just a few.

So, the answer to the question “What is the perfect IT support team” is a healthy combination of your own core IT team supplemented by the expertise of an outside Oracle consultancy, and if your organisation relies heavily on Oracle, then the Oracle experts are Rocela.

Feel free to ask any questions on this topic – I would be happy to answer.

Oracle Support Change for E-Business 11.5.10.2

Review of the recent Oracle support change for E-Business 11.5.10.2 and the introduction of the “Exception” sustaining support period.

by Stephen Graham, Senior Principal Consultant

Background

The terminal release of E-Business Suite 11i, 11.5.10, moved into its 3-year extended support phase in November 2010. As extended support normally runs for 3 years then that phase is due for completion in November 2013, after which the product moves to Oracle’s lowest support level of sustaining support.

Sustaining support normally includes the following:

• Updates, fixes and patches (including security patches) created during the Premier & Extended Support periods
• Legislation, tax and regulatory updates created during the Premier and Extended Support periods
• Upgrade scripts created during the Premier Support period
• Assistance with service requests and access to My Oracle Support
• Non-technical customer service during normal business hours

Sustaining support normally excludes the following:

• New updates, fixes, security alerts and security patches
• New legislation, tax or regulatory updates
• New upgrade scripts
• Certification with new third party products/versions
• 24 hour commitment and response for severity 1 issues
• Previously released fixes or updates that Oracle no longer supports

In addition to the normal sustaining support that would typically be available Oracle have included what they are calling an Exception sustaining support period where, in addition to the normal Sustaining Support components the following will also be available for the first 13 months (i.e. to the end of December 2014):

• New fixes for severity 1 production support issues
• Critical patch updates (i.e. security patches) up to and including the October 2014 CPU release
• Payroll regulatory updates for the US, Canada, UK and Australia for each countries fiscal year ending in 2014 (i.e. for the UK that means the legislation updates will be available for the March/April 2014 year-end)

It’s worth noting that in order to qualify for that support then the system has to be patched to at least the Extended Support minimums. Most customers will already have done that in order to qualify for the extended support period. If it’s not been done and the intention is to rely on the provisions of the Exception sustaining support period then it’s essential that this work be done as soon as possible.

What does it mean for an 11.5.10.2 customer?

Most 11i customers had decided to upgrade to release 12.1 before the end of the extended support period in November 2013, however this announcement from Oracle complicates the issue and some are now re-thinking their plans. In order for an informed decision to be made it’s essential that each customer fully understands what support would be available to them during the Exception sustaining support period so that they can take an educated assessment of the risks. As the situation with the Critical Patch Updates/Security patches is clear that leaves two areas that need to be clarified:

Legislation updates

• If your system uses Payroll legislations other than the ones Oracle have included – U.S., Canada U.K. and Australia then the exception period is not of benefit
• If you system is dependent on any other legislation or regulatory functionality other than for Payroll (or for the US Form 1099 updates which Oracle have also included) then there is a risk that if the government makes changes that can’t be implemented by you (as Oracle wouldn’t necessarily assist) using the 11.5.10.2 system as it was at the end of the Extended Support period then you may have a problem. For UK customers there aren’t that many other legislation requirements other than Payroll that are widely used but there are some – for example the Construction Industry Scheme (CIS).

Changes to such legislation haven’t been a regular occurrence but it’s important to understand that if changes did occur then you’re probably on your own.

New Severity 1 fixes

It’s important that you understand Oracle’s definition of Severity 1 which is:

Your production use of the supported programs is stopped or so severely impacted that you cannot reasonably continue work. You experience a complete loss of service. The operation is mission critical to the business and the situation is an emergency. A Severity 1 service request has one or more of the following characteristics:

• Data corrupted
• A critical documented function is not available
• System hangs indefinitely, causing unacceptable or indefinite delays for resources or response
• System crashes, and crashes repeatedly after restart attempts

It’s perhaps even more important to understand what Oracle’s definition of Severity 2 is, to be clear what you won’t have support for during the Exception period:

You experience a severe loss of service. Important features are unavailable with no acceptable workaround; however, operations can continue in a restricted fashion.

So based on Oracle’s own definitions, during the Exception report period you’d have access to Oracle support if your database was corrupted, if a critical function of the system stopped working or if the system crashes and can’t be brought up. If however you have what they class as a “severe loss of service” and other parts of the system still work then you’re likely to have to rely on either fixes or patches that were already available or on your own efforts to resolve. There are grey areas as well:

• What parts of the E-Business Suite system will Oracle view as “critical documented functions”?
• What level of assistance will Oracle give in finding pre-existing fixes for non-Severity 1 issues you encounter? Oracle support analysts have a high workload and need to prioritise the calls they deal with, so it’s quite possible that 11.5.10.2 customers with lower priority issues will find themselves well down the list.

Summary and Rocela Opinion

Having reviewed the implications of the change in detail it’s my opinion that what Oracle have done is to put together a support package in the Exception sustaining support period to assist customers who’re upgrading from 11i to R12 but may struggle to get the upgrade completed before the end of November 2013. What they’ve done is particularly relevant for U.K. Payroll customers because prior to the Exception period being introduced they’d be in a lot of trouble if their R12 upgrade ran on past March 2014 as they’d no longer be able to process their payrolls to meet the legislation beyond that date.

It’s also my view is that Oracle don’t want the Exception sustaining support period to be used by customers as an excuse to not get moving with upgrading onto a better supported version. If that had been their intention then surely they’d have lengthened the Extended Support period – as they’ve just done with the support for R12.1.

If you were already willing to continue using E-Business Suite with only sustaining support available then this change may give you a little extra security. If however you view E-Business Suite as a key or critical system then you should make sure that all relevant parties in your business understand and accept the implications. The drop from Extended to Sustaining Support is softened slightly by the introduction of this Exception sustaining support period but it’s important that you’re aware that Oracle have excluded support for any new fixes, what they class “a severe loss of service” and the potential implications on that for your own business – perhaps at your own year-end, when trying to get a payment batch out to your suppliers or trying to receive cash from your customers.

If you were planning your upgrade and had concerns about the impact of it slipping beyond November 2013 then Oracle have helped by slightly alleviated those concerns. If however you’re using the support change to re-schedule or delay your upgrade then I’d urge you to fully consider the implications first – and at the very least ensure that your key business users are aware of the risks.

I hope this has clarified this sometimes confusing area and if you have any questions on this topic, then please do not hesitate to ask by creating a comment.

Rocela awarded G-Cloud Framework Agreement by Government Procurement Service

Rocela, has today announced that they have been awarded a framework agreement by Government Procurement Service for Specialist Cloud Services, within the G-Cloud framework.

Rocela has unparalleled expertise in license optimisation & management, and Oracle E-Business Suite implementations, upgrades and managed services. This depth of expertise means that we can offer specialist advice and guidance to those government and public sector establishments looking to take advantage of the benefits of Cloud Technologies and shared-services.

Rocela’s Cloud services consider all aspects of the shift to Cloud Technologies; license impact to on-going software asset management; impact on underlying hardware and application performance to remote application management.

Marie-Helene Durif, Head of Sourcing & Category Management, ICT at the Government Procurement Service said, “At the Government Procurement Service our priority is to provide procurement savings for organisations across the UK public sector. The inclusion of Rocela Limited to the G-Cloud Framework will strengthen our offering and provide public sector buyers with a tried and tested route to achieve value for money.”

Rocela’s CEO Martin Mutch said “Rocela has a long history of working for the public sector in central government and at a local level. We are therefore delighted to have been awarded this framework agreement as part of G-Cloud.

As cloud computing becomes a more central pillar in the Government cost reduction and efficiency programmes, Rocela is at the vanguard of cloud enablement and we are proud to be in place to support the migration of legacy systems to target cloud environments.

For cloud projects to deliver benefits, comprehensive understanding of legacy and target environments and migration/transition risks need to be understood and planned.

Rocela has developed proven approaches to help public sector get back office environments such as Oracle E-Business Suite up to the latest release. The transition to cloud is then securely and resiliently transferred.

We look forward to working with the public sector to get their environments, particularly Oracle, optimised for cloud readiness, commercially and technically, then transitioned to reduce cost and enhance performance.”

Please contact us for further information.

Rocela is a Double Winner at UK OUG Partner of the Year Awards, 2012

Gold for Managed Services Partner and Bronze for Oracle E-Business Suite Partner

We are delighted to have been awarded Gold in the category of Managed Services Partner of the Year and Bronze for E-Business Suite Partner of the Year at the UK Oracle User Group Awards 2012.

Martin Mutch, CEO at Rocela commented: “This award recognises that Rocela’s teams are setting the standard in the Oracle Managed Services and E-Business Suite industry and reinforces its leadership position within the UK market.

“Winning Gold for Managed Services is a credit to Rocela’s Managed Services teams across the business that continually performs beyond customer expectations and it’s great to see our passionate professionals recognised in this way.”

“Our award of Bronze in the E-Business Suite category validates our prominent position in the market place as the Oracle E-Business Suite experts and is a testament to the level of experience we have in this field.”

Keith Bell, Head of Business Development at Rocela said, “Rocela provides flexible, reliable and comprehensive managed services offering the highest levels of Oracle expertise and exceptional customer services to organisations with complex Oracle environments.   These awards are a testament to the level of expertise of our dedicated employees and highlight our continued investment in customer satisfaction and service development.”

“It is particularly gratifying that we have received this award as a result of Rocela’s clients voting results, and we thank them for their continued support.”

Follow

Get every new post delivered to your Inbox.

%d bloggers like this: