Declaring an Oracle Unlimited License Agreement – Part I

Paul Bullen, Senior License Consultant Rocela

Last time we took a very high-level view of what you need to consider if you are weighing up purchasing an Oracle Unlimited License Agreement (ULA). Let’s now assume that your projections and the cost of a ULA make it worthwhile and you’ve gone ahead and entered into a ULA: well done! So what now?

Firstly, you must communicate the ULA purchase internally and what it allows the appropriate software users (anyone who can influence the amount of Oracle software your business will deploy) to do. It is important that full details of what the terms of the ULA and the products involved are passed on. Forwarding a copy of the Ordering Document to the DBAs is definitely not the best way to do this: DBAs generally won’t have the inclination to read the details of commercial documents! Instead, you must distil the content and tell people what products are available for unlimited deployment, and for how long they remain unlimited.

This seems obvious, but from our extensive experience working with customers who own ULAs, it is clear that often over 30 pages of ordering document can sometimes dangerously be interpreted as:

“Use as much Oracle software as you want!”

There’s a real danger that the actual allowance and detail of the ULA gets lost between those who negotiated it and those who ultimately use the software (this is a problem outside of ULAs as well, but the potential risk when the belief that all Oracle software is available for unlimited use is bigger).

So, assuming your staff know what products they can use and for how long, do you wait until a month before the ULA declaration date and then start preparing to declare? If anything, owning a ULA means you have to pay more attention to SAM and the amount of software you deploy and use: you need to know that you are following or exceeding your forecast – there is little point in having a ULA and not gaining the return you expected. In fact, there is a danger that you deploy far less of the software than forecast (e.g. change of product choice, cancellation of a project) and suddenly the whole business case for the ULA is no longer valid.

Your ULA is a massive investment for your company: it is worth putting effort and time into ensuring it is being used properly as well as having your methods and usage reviewed by an independent expert such as Rocela.

There have been a number of occasions where we have seen clients with a ULA who do not fully understand how to use them. I’ll keep repeating the same message:

A ULA allows you to deploy an unlimited amount of a set of products for a one-off upfront capital cost upon which the support is based. There is no true up; there is no change to the support fee (excluding RPI).

So, to summarise:

• Ensure your software users understand what the ULA allows them to use, and how

Track your Oracle software deployment: not just the ULA products but related products

• Ensure you compare your usage against your ULA business case

• ULAs are huge investments and should be properly managed and reviewed during their course

• Use your ULA: understand and take advantage of its features

Next time we’ll take a look at declaring your ULA in more detail. In the meantime, please ask any questions or leave any comments below.

Oracle Unlimited License Agreements – considerations for prospective buyers Part II

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.

Next time we’ll look at what happens once you have a ULA, and the associated management of licenses provided by a ULA. Please feel free to leave any comments below.

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