In Episode 1 of our Oracle video briefing series, we’ll take a look at those all-important ULAs, including some considerations if you’re planning on signing a new ULA or whether you’re gearing up for a renewal.
What is an Oracle ULA?
In basic terms, a License Agreement (ULA) gives customers the right to deploy as many licenses as they want for a set of products, for a set period of time throughout the duration of the contract, usually three or five years. The objective is to deploy as much as possible within this time to get the best value for your investment, only declaring usage at the exit/renewal point. There are also Perpetual ULAs in play, in which organizations can continue to deploy the licenses for an unlimited amount of time, as long as they meet certain requirements.
Whilst ULAs have many benefits for certain organizations – e.g. ULAs make scaling flexible for new businesses and also don’t require expert product knowledge so are more convenient from a procurement level – they also have their downfalls.
Primarily, costs can spiral out of control and organizations can end up with software they neither need nor use but have to keep investing in because of poor management of deployment and poor understanding of contractual Terms & Conditions. It’s therefore crucial to keep certain things in mind.
What to consider
Total Support Stream – An Oracle ULA Total Support Stream consists of two elements – support from licenses you already own and that have the same functionality as the product you are buying, and incremental support, in which support is assigned by Oracle based on the number of licenses expected to be used during the duration of the ULA.
Livingstone’s advice: Take the time to understand how the support stream is created and keep as many non-ULA licenses outside of the Total Support Stream as possible, as once within the ULA, they are extremely hard to modify.
Divested & acquired entities – Accommodating for divestitures and acquisitions are provisions that can be added to any ULA agreement – but organizations have to be on the ball.
If present, the divestiture clause enables the divested entity to use the unlimited licenses for a set period of time, which, subject to negotiation with Oracle, can be anywhere between 6-24 months. This is critical for organizations looking to start their own vendor contracts, but might need some time to stand on their own two feet.
For acquired entities, an additional clause can enable them to have the same deployment rights as the parent company. Requirements vary for this clause, but conditions are usually structured around revenue or number of employees. Also, important to keep in mind is that, if the acquired entity is bringing across extra licenses, these could all be rolled into the acquiring company’s ULA Total Support Stream.
Livingstone’s advice: Having these clauses in the ULA, provides flexibility for any structural company changes, so consider carefully whether to carry over the ULA or licenses into any new company structure or you could end up with additional unnecessary products and costs.
Price Hold – Despite the unlimited nature of an ULA, you might find yourself in a position where you want to certify the ULA and need to buy additional licenses and products outside of the ULA that could lead to extra fees.
The price hold discounts can give you an edge during negotiations here. Given the fact you are paying a bulk fee to deploy the products for the term of the agreement, by having a price hold in place you will have a good starting point but also a good amount of leverage to negotiate a significant discount and secure a deal that considers your existing investments while negotiating a new deal.
Livingstone’s advice: Know your estate inside out so you know exactly what additional licenses and products to ask for during negotiations.
Licensing on VMware (check out Episode 2 for more info on VMware) – VMware is possibly the most important thing to consider when it comes to ULAs. Licensing on VMware has some unusual rules – including Oracle’s claim that all CPUs in the VMware farm need to be licensed.
Livingstone’s advice: If entering into a new ULA or negotiating a renewal, it’s critical to start negotiating clauses that allow you to only license the number of CPUs that are actually using the Oracle products. This means you can exit an ULA without worrying about non-compliance ramifications in any potential post-agreement audit.
What can I do?
While an ULA gives you the right to deploy as many licenses as you want, it doesn’t mean managing or understanding your Oracle environment should fall by the wayside. Without proper management and without knowing what you need to deploy in actuality, at the end of the term, you could end up renewing the ULA and paying for licenses and products you don’t need. Additionally, without managing or understanding your deployments, audits become more exposed to risk and harsher penalties. Controlling and optimizing your Oracle investments is key to a successful ULA – giving you overview and understanding of your compliance, consumption and contract.
To find out more about managing your Oracle estate, register for our full Oracle Briefing Series here.
For more information, visit our dedicated Oracle page, email us on info@livingstone-group.com or complete this form and one of our contract experts will be in touch.
About the Author
Razvan Tarnovschi, Oracle Practice Lead
Razvan joined Livingstone Group in 2021 as Oracle Practice Lead and brings with him 13 years of Oracle experience. During this time, his responsibilities included negotiating high dollar value contracts with customers. Razvan has a deep understanding of the language of Oracle's complex contracts including policies and terms.