Oracle Unlimited License Agreements – considerations for prospective buyers Part II
February 15, 2012 Leave a comment
Paul Bullen, Senior License Consultant Rocela
Last time we looked at the basic principles of an Oracle ULA: for an up-front license fee, you can use as much product as you like, declare your usage at the end of the agreement and then own that amount of perpetual license. This time we’ll look at bit more at specifics for considering a ULA.
How much will it cost/is it worth it? Unsurprisingly, this is a very weighty question! This next bit will sound obvious: the key consideration is how much of the unlimited product you are expecting to use, and how much that would cost if you bought ‘normal’ perpetual licenses. Doing this requires some insightful modelling—we’ll look at a relatively simple example here.
Let’s assume we are embarking on a major business-changing programme. We have a basic but large requirement for Oracle Enterprise Edition Database and the Partitioning option. For the sake of clarity, it’s easier here for us to work with a small number of products at high volumes rather than a large number of products at lower volumes, though this may be slightly less realistic.
In order to be able to consider a ULA, I need to know what the likely total cost would be for these products and the volumes. After some calculations for ‘normal’ perpetual licenses, and applying a suitably appropriate discount, I have a potential bill of £1.3m license (capex) to cover this project’s requirements. Of course, if I could get a ULA for £1m, this would be a ‘no-brainer’, otherwise I need to start ‘hedging’ my bets – £2m could still be attractive if there are other quantifiable and realistic requirements in other areas of the business. Remember, the £2m capex would attract an annual support cost, let’s say 22%, of £440k per year – but for this £440k, we could actually use well over £2m worth of licenses. So, how do I build the business case to spend the £2m upfront?
There are a large number of variables to consider here:
• Likely cost of ‘normal’ incremental purchase
• ‘Known’ versus ‘unknown’ license requirements
• How much potential is there is fully utilise the ‘Unlimited’ component of the ULA?
• What degrees of certainty are there that certain projects will go ahead and make use of the products to the level forecast?
• Is there any chance of under-utilising the ULA?
• Discount levels for incremental purchases
• How much is the ULA likely to cost? (A fairly critical question!)
• What products need to be included in the ULA? How might your Oracle strategy change over the term?
• As with all Oracle licensing, working out the licensing requirement and purchase is dependent on both technical expertise (ensuring the correct license requirement is calculated) as well as commercial and financial expertise
• An absolutely critical point about a ULA is that your support cost is based on the license fee paid up front – NOT the amount you actually use
In order to answer all these questions accurately, we’d need input from a number of people within the business, from technical to strategy to architects to commercial stakeholders.
Do not let the number of variables put you off here: think about the potential value of a ULA and the flexibility and savings it could provide your business. Oracle ULAs are an excellent way to gain control of your Oracle licensing quickly and to provide your business with a clear strategy without worrying about additional licensing costs. Remember: you pay a ‘flat fee’ to use as much of the Oracle ULA products on the agreement as you like without any impact—no change to support costs, no additional capex.
Buying a ULA is not a trivial task – it is a significant purchase which needs proficiency in understanding Oracle licensing. It is well worth having the independent expertise of Rocela’s consultants to provide insight, lead you through the process, ask all the right questions and evaluate the ULA properly. Rocela’s consultants work with complex Oracle licensing situations every day and have helped many clients understand and manage the complexities of ULAs thoroughly.