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.

A Standard Way of Thinking – Final Part

Written by Paul Bullen, Senior License Consultant

In my previous blog posts on Standard Edition (Part 1, Part 2), I referred to the massive reduction in price from Enterprise Edition to Standard (92% in our typical example). Hopefully you’ve had some time to realise that Standard Edition is a viable database edition and could, with some discussion, potentially replace some use of Enterprise Edition in your company. In this last blog post, we’ll look at Named User Plus licensing for Standard Edition and summarise my previous blogs posts.

So, hopefully you’ll remember from my earlier blog post that Named User Plus licensing is not trivial, and needs careful management. With that in mind, let’s look at the differences with Named User Plus on Standard Edition.
With Enterprise Edition database, you have to license the greater of either the actual users of the software or the ‘Named User Plus minimums’. This can get messy; especially with database options (read this). Most people think of the minimums of 25 NUP per Processor when considering NUP licensing for DB EE.

So, what is the minimum for DB SE? The answer is a simple ‘5’; No, not 5 per Processor, you must own at least 5 NUP licenses in your company; if you have 5 Named Users, 5 NUP licenses and 1,000 servers running Standard Edition, you would be licensed correctly. So, 5 is the answer.

This lack of minimums makes a massive difference across a large estate. Consider that each set of 25 DB EE NUP will cost $23,750 (list price) and that for Standard Edition this will be zero, you can probably see that the savings soon start to mount.

It brings the Named User Plus metric back to a point of common sense: you buy an SE Named User Plus license for everyone who uses Oracle, simple as that. You have no minimums to calculate or track; you have no database options to mess things up. You get an effective and capable product for a reasonable price, and therefore reasonable on-going support costs.

So, to wrap things up:

  • Standard Edition database is a very capable product and can probably run most of your workload
  • SE is significantly cheaper than Enterprise Edition database: we are talking over 70% savings on capex and opex here
  • Unless you specifically need Oracle’s extra cost options or management packs, there are very mature and cheaper alternative products available

In my view, Standard Edition database should be your “Standard way of thinking” i.e. your database edition of choice if you want to get best value and reduce costs: Enterprise Edition should be used as an exception. As with any large change, it is always worth consulting the experts before you undertake a significant change to your current or future estate (as we could save you even more!)

Please feel free to ask me any questions on this or any other Oracle licensing related topics.

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