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.

Declaring an Oracle Unlimited License Agreement – Part II

Paul Bullen, Senior License Consultant, Rocela

My previous blog entry discussed the importance of making sure your staff understands what an Oracle ULA means to them and how they use Oracle software. I also mentioned that on-going management of your software deployment during a ULA is even more important than ‘normal’ licensing.

One of the reasons I mentioned tracking your software deployment during the entire term of the ULA was to ensure that you are getting the value you expected out of your investment. The other reason is so that you can accurately declare your usage of the ULA products when the Unlimited Deployment Period has finished.

To recap, with a ULA, you buy the right to use as much of the defined product as you wish during a set period (typically 3 years, but can be between 2 and 5 years), at the end of this period, you declare your usage of the product and this should become your perpetual license: your usage effectively ‘crystallises’ at this declared number and you then own that many licenses to do with as you would any other normal Oracle perpetual license.

If you do not track your usage throughout the term of the ULA, you may find yourself frantically undertaking an Oracle audit of your own usage on the run up to the declaration date: doing so may mean you ‘miss’ installations (and hence they are not licensed) or you count incorrectly. Measuring for an Oracle ULA is not quite the same as for ‘normal’ Oracle licensing—there are some small but important differences between the definitions.

Once you have measured your deployment (and let’s be honest, tracking and counting Oracle software accurately can be very difficult), you need to fill in a declaration form: this is what Oracle will use as the basis for your perpetual license. However, it is worth bearing in mind that there is a potential for audit at this point—understandably, Oracle need to be reassured you are actually using the software you are declaring to them and not just making up a number: they may ask to review your inventory and you should be prepared to share this with them. This is another reason to make sure you invest in this process and that you thoroughly understand your estate and the terms of the ULA.

As this is the last in the series of blog posts for ULAs, I’ll try and summarise:

• ULAs are a very powerful and beneficial (usually) way of licensing Oracle. They are significant purchases that require assessment and planning.
• You may use as much of the software as you like during the period of the ULA
• There is no true up, the opex and capex are set from the start
• Education and ‘awareness raising’ about the ULA is key to it being used correctly
• On-going usage tracking and management are even more important with a ULA
• ULAs are a significant investment and should be negotiated, managed and declared with expert advice

If you are considering a ULA and need to understand the basics, have a ULA and require assistance managing, or are approaching your ULA expiry and need help deciding on declaration or new purchase, then contact us for assistance. As you have been reading, we know a great deal about ULA’s and can steer you in the right direction.

Oracle experts Rocela events for 2012

Rocela’s Oracle experts have been involved in a considerable number of client side activities this year – from assisting large enterprise organisations declare their Oracle ULA to helping a global utilities company upgrade to Oracle R12.

Our website, twitter and blog all try to educate, deliver value and convey our deep knowledge of ‘all things Oracle’ however there is nothing better than looking us in the eye and asking us the difficult questions.

That is why we are planning a Roadshow of events for 2012 – taking us all around the UK (Edinburgh, Aberdeen, London, Manchester) to talk to large enterprise organisations on;

• Oracle Thought Leadership – a peer to peer ‘behind closed doors’ session discussing Oracle trends, product roadmap, Cloud, ULA’s, Virtualisation, Strategic Vendor Management to name a few.
Rocela Control ™ Session – a presentation on the complexities of Oracle license management and how our proven SAM methodology, Rocela Control ™ can help. This will also include a client case study, where one of our customers will present on their situation, what problems and impacts this was causing and how engaging with Rocela benefited.
• R12 Sessions – presentations and peer to peer discussions on how we can help assess whether Oracle R12 is best for your organisation and how its new features/functions will benefit.

We have run a number of these sessions before which have prompted the following comments;

“Great to hear from other contacts in the industry and how they have tackled the same sort of issues we are facing.” IT Director, Retail Company

“(This session) has helped us consider whether Oracle R12 is the right move for us.” IT Manager, Public Sector Organisation

“Rocela has given me an invaluable insight into the benefits and pitfalls of Oracle’s ULA’s – many of which I was not aware of before!” License Manager, Financial Institute

If you are struggling with the complexity of Oracle licensing, need to reduce risk and cost or need advice on Oracle R12, then please email Linda Anderson on linda.anderson@rocela.com with your contact details and highlight which event you would be interested in attending.

Have a Merry Christmas and a Prosperous 2012.

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