In ‘Navigating the twists and turns of Oracle ULA exits and renewals – Part 1’, we discussed the challenges and mistakes organisations experience whilst executing Oracle ULA exits and renewals. In this second part, we’ll look at the consequences of these mistakes as well as the practical steps organisations need to consider throughout the ULA exit/renewal process.
Consequences of getting it wrong
Virtualisation: This will always be a big issue with Oracle and is a consequence of a mismanaged ULA that we see frequently. Oracle’s virtualisation rules must be taken into consideration for areas such as VMware, VM and IBM LPARs, especially around how software deployments are counted. If you don’t know how Oracle software is measured when you declare, or if you don’t know whether or not you have wording in the contract specifically referring to such deployments, you could find yourself in hot water when Oracle request further information on your declaration.
Cloud deployment: Older ULAs often do not reference cloud. This can be a big challenge, particularly if you’ve started to migrate to the cloud but haven’t re-negotiated your ULA accordingly. Prior to exit, make sure you are aware in advance of all your cloud deployments entitlements. For the ULA certification, you will need to ensure that you can declare defined metrics on vCPU for AWS and Azure deployments.
Incorrect usage: Another consequence of not knowing what’s wrapped up in a ULA agreement is that you might not be fully aware of who’s actually allowed to use the ULA. For example, have there been acquisitions or joint ventures during the ULA period, which have brought new user groups to you organisation? The same goes for understanding the products at a component level. Will your ULA contain restrictions on all or part usage of products for certain areas of your business?
Audits: Unsurprisingly – and a key concern of many of the clients we encounter – if you aren’t on top of what’s happening with your ULA and aren’t prepared for the exit negotiations, you could find yourself going straight from an exit right into an audit, costing you time, money and other valuable resources.
Navigating the pitfalls
It might seem drastic, but the day you sign the ULA is the day you have to start managing it – plan, plan, and plan again. Being prepared well in advance of an exit or renewal is key to leveraging negotiations in your favour. Whether this be walking away from Oracle or negotiating a ULA renewal.
Know your assets: Start this planning-ahead process by being fully aware throughout the contract of what’s being deployed, by whom and where. Keeping an eye on all usage and deployments from the very start is crucial. Then when it comes time to exit or renew, the results of your usage won’t be a surprise. Knowing this information will place you in a better position to manage and predict your Oracle requirements going forward. It will also provide you with a better understanding of the financial value your organisation has gained from the existing ULA, which could impact on any internal justification to renew or exit.
Be forward-looking as the exit day draws near: Ideally, about nine months out is when you should be thinking about future requirements. This is particularly important if your objective is to negotiate a different type of contract with Oracle, outside of the ULA. Involving everyone is essential here, from business leaders, to IT, to procurement. This will allow you to paint a fully-rounded picture of your organisation’s entire business needs. If you’re exiting, be absolutely sure of future estate requirements. When it gets to six months before renewal/exit, start discussions with Oracle. This gives Oracle the opportunity to be creative in their response and work internally with their stakeholders to achieve any mutually advantageous outcome.
Understand Oracle’s focal point: Knowing Oracle’s current market position is a good way to gauge how the negotiations will go. It helps to know that ULAs are a good revenue stream for Oracle and it is a strong focus for their sales teams – you might be able to negotiate a good deal if you keep this in mind.
Play nice: Oracle responds far better to positive interactions. This is much easier to do if your organisation is in control of its ULA deployments and you have confidence in your desired negotiation outcome(s). Entering into the process too late or without clear objects will create frustration on both sides. It could even become antagonistic with the business feeling ‘trapped’ in the ULA.
Don’t be afraid to challenge Oracle when the ULA period is complete: The licensing policies shared during the ULA are typically for informational purposes only; they can and should be challenged. However, you will need the evidence to support your claims, which is why management and control from day one is so important. Maintain documentary evidence of the ULA negotiations so there is clarity on the intention of non-standard clauses. And, of course, system management around virtualisation or cloud deployments is essential.
All these points above should ideally contribute to helping you understand your estate and put you in the best position when it comes to your ULA negotiations.
About the Author
Robert Lamb, Oracle Practice Head, Livingstone Group
Rob is passionate about Technology and Licensing and has dedicated the past 20 years working with Oracle customers.
During the last 10 years Rob has supported clients to manage their Oracle Application & Technology License as well as consulting on contract negotiation, cost optimisation & Audit Protection. Rob has experience in working with over 250 Oracle customers worldwide