Oracle On Demand: Increasing Efficiency – Part 3

(By Tam Kyle, The third part of our close look at Oracle On Demand and how to make it work for your business)


So far, we have discussed how On Demand is provided, how the services are supported and how it’s licensed.  We considered the impacts of additional resources and modifications on your license entitlement and in the process, uncovered some potential ‘gotcha’s’!

When you purchased your licenses – and here I mean the Oracle E-Business Licenses (this isn’t specific to On Demand incidentally – it’s relevant to most Oracle E-Business Suite purchases), you will have done so under an overarching Oracle License and Services Agreement – the so called OLSA.

In this document (or sometimes attached separately) there will be a set of license terms and definitions. Buried somewhere deep in these, will be a statement noting that you are responsible for ensuring that a set of restrictions are not violated.

What is the OLSA?

One of these innocuous looking clauses states that you promise to abide by the Application Licensing prerequisites as specified in the Applications Licensing Table. So what? Well, the application Licensing table is a separate document (unfortunately usually provided via hyperlink!) intrinsically connected to your contract.

Importantly, it states your liability in the event of alteration to the middleware or technology components of the Oracle E-Business modules. If, for instance you have added tables to your instance then you’ll probably need to license the database AND the middleware application server.

Now, don’t think because you’re running your service at On Demand that this protects you from this liability – ‘Oracle made the changes’, you shout.  Yes, maybe so, but they made them on your behalf.  Someone at your company wanted them to be made, and somebody somewhere signed a contract that said you’d be happy to bear the consequences of such an action.

And here’s the rub – if you’re using On Demand at Oracle’s data centres, then they know exactly what’s been altered and how much it’s going to cost you.  After all, they provide the infrastructure!

You get what you pay for?

So, you’ve paid for the Oracle E-Business Suite licenses, you’ve paid for the Oracle On Demand Licenses, you’ve paid for the Oracle On Demand resources (storage, environments, VPNs and so on), and you might now be paying for Oracle database and Oracle middleware licenses, based on a technology footprint that’s owned by Oracle!

Furthermore, are you (or the DBAs at OOD) utilising Enterprise management packs to monitor the instances? Do you know if your contract allows these to be used without additional cost considerations?

Don’t get me wrong, even though that sounds like a hefty payment to one vendor, it may well be attractive compared to in-house provision, particularly in the case of an SME who just doesn’t have the resources available to provide high end Financial or HCM functionality on their own. Just be aware of what you’re potentially getting into.  Oracle holds practically all the cards here. You can’t hide the Oracle infrastructure footprint (and you shouldn’t) – because it isn’t yours.

What to do

So what do you do about it? Sometimes, in a situation when a business case is being written, the implications of a future modification might not be obvious, especially when those implications might be buried deep in contractual documentation hidden in a filing cabinet in a procurement department somewhere.

And don’t blame the Oracle guys providing your day to day operational support – they’ll probably be DBAs, server and storage technicians just trying to do their job and the likelihood is that they’ll be several layers removed from the costing implications of OOD.

No, what you need is to be armed up front – be aware of the FULL cost implications of making a decision to go On Demand. Speak to your potential On Demand Service Manager, and your Oracle Account Manager, and make sure that they know that you want to be fully briefed on any and all cost impacts – in advance of them  happening.

At the moment, many clients are going through migrations to Oracle E-Business Suite R12 – this seems to have triggered a hive of license impact activity.

Be aware

So, be aware – have the conversations, make sure you’re well prepared. Alternatively, speak to us. We’ll help you navigate the license minefield, or at least understand the impact.

Next time, we’ll delve a bit deeper into the implications of those Oracle E-Business modifications – whether you’re hosted at OOD or not.


Oracle On Demand: Increasing Efficiency – Part 2

Am I an angry cloud or a happy cloud?

(by Tam Kyle, – the second part of our close look at Oracle On Demand and how to make it work for your business)

So, now that we’ve purchased licenses for the module of choice, that’s it done? Well no, that was the easy bit. Anyone can purchase Oracle E-Business Suite modules – you’re interested in On Demand, because it’s a value add service.  As the name suggests, you get something that responds to your needs.

Require an additional testing environment for that R12 upgrade? – there you go. Want a new functional modification implemented to show real time expense monitoring? – no problem. Are my applications being backed up and monitored regularly? – sleep easy.

What’s the Catch?

However, you don’t get this for nothing.  If you were doing this in-house then you’d be paying for IT resources, and software tools to do it for you – this is no different, except that you’ve now got the ability to call on these resources from a wide swath of technical and operational capability at Oracle to provide your needs, and these have to be paid for. So what you’ll also see is billing for storage, new environments, VPNs and so on. But how are you paying for all the Oracle resource that’s working on your behalf?

Well, you also have to license each of your users of the On Demand Service (which may be more than your business population) so now you have the concept of an On Demand authorised user – someone that you authorise to use the service on your behalf. These are priced on a monthly basis; so for example, you could have 20 Application users (of say, Financials) for 6 months.  This cost goes someway to paying for the resource you’re consuming at OOD.

Phew, glad that’s over…

What’s next?

‘Fraid not – now we come to the interesting bit…

Remember that modification I mentioned above? You’re probably aware that purchases of the Oracle E-Business Suite modules come with restricted use technology licenses.  Basically you tend to get the supporting database and middleware licenses for nothing, PROVIDED that you don’t alter the functional structure of the applications.

Now, the reality is that most customers make alterations to their Oracle E-Business Suite implementations over time.  Practically everyone has bespoke needs that just aren’t provided in the products out of the box.

So you might tweak some screens, or provide new ones.  You might even go so far as to implement some new tables and stored procedures to give your boss that whizzy new function he was speaking so sparkly-eyed about.  Well, you’ve more than likely just rendered your technology implementation licensable.  (Watch out for my next blog post on ‘Oracle E-Business Customisations’, which will go into much more detail on the impact of this.)

How is this possible? Don’t I get everything bundled together?!? I didn’t sign up for this – well, actually you most probably did and in On Demand Part 3, I’ll explain how.

Oracle On Demand: Increasing Efficiency

VW Bug – Engine in Rear

by Tam Kyle

In these days of increased cost pressures and drives for efficiency, it is increasingly important that companies strive to achieve and demonstrate the greatest possible return on investment. Interest in the benefits to be achieved from hosted and virtualised service offerings like SaaS (Software as a Service), IaaS (Infrastructure as a Service) and PaaS (Platform as a Service) has led to a plethora of ‘Cloud’ providers in recent times.

Oracle’s On Demand is a good example – it is a service offering that provides managed and/or hosted Oracle technology or applications and promises financial and operational benefit to companies.

But, if you’re thinking of going down this route, have you considered all the licensing implications?

Licensing Implications

On Demand can essentially be provided in 2 ways – as Administration Services or Computer and Administration Services. Administration Services means that the client, or another 3rd party, provide the necessary data centre setup to support the application, and Oracle staff administer this application remotely, providing system administration, application technology management and monitoring.

Computer and Administration services extends this offering, and in this case, the infrastructure is provided by Oracle as well as the operational service. The services are supplied from one of Oracle’s data centre sites, for instance, in Austin, Texas. In this case it’s the customer who has remote applications access.

So what services can be supported in this manner? Well, practically any of the Enterprise Oracle offerings, though the main technology stack (i.e. database and middleware) and Oracle E-Business Suite and HCM portfolio tend to be the most popular. We’ll confine our current discussion to just that – those Oracle E-Business elements that help a company run its business – principally things like the HCM or Financial products.

So, how do you license On Demand Services for Oracle E-Business?

On Demand Services for Oracle E-Business

Well, as you’d expect, you need to have licenses for the module that you’re interested in – so if it’s Financials then you might obtain 200 Application User licenses to cover the functionality you need.

An application user is someone that you authorise to use the application programs, regardless of whether the individual is actively using the programs at any given time – note that this very specifically isn’t ‘concurrent usage’ – if you have a BAU daily user, and someone who only checks detail on a yearly basis – they both need to be licensed.

If it’s an HCM module that you’re looking to use, then it’s highly likely that it’s metric will be based on the ‘Employee’ definition – so you’d need to count all of your current full time and part time workers, and any contractors or 3rd parties who provide you with a service – again, note that this differs from what you might regard as an ‘employee’.

In all cases, check your terms and conditions – the metrics will be defined and if you’re in any doubt, speak to us and we can help clarify the situation.

So we’ve set up the situation but how do you go about solving these issues? Tune in in the next few days for part 2 where we take a closer look at actionable advice to make the most of your situation.

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