Oracle ULA – Lost Value and Compliance Risks

Any company with an Oracle Unlimited License Agreement (ULA) will sooner or later be faced with the following key questions, among others:

• How much value was gotten out of the ULA?
• How much value is being left on the table?
• What compliance risks is the company exposing itself to due to the ULA?

Oracle’s Unlimited License Agreement (ULA) is a useful licensing approach for organizations with high growth rates and large, complex environments. ULAs allow companies to deploy a selection of Oracle software in unlimited fashion for a limited amount of time, typically around 3 years.

At the end of the ULA, a customer may either renew the ULA, which Oracle prefers, or choose to exit the ULA and “certify” its final usage numbers to Oracle. The final certification quantities for the licenses ultimately consumed by the customer are effectively granted by Oracle to the customer as its go-forward license entitlement.

Sounds simple, right?

As with any aspect of Oracle licensing, many things can go wrong. Significant value may be lost and major compliance gaps may be created if the ULA certification or renewal is not handled with care and expertise.

What can go wrong?
Briefly, here are the major things that can either prevent a company from properly realizing its ULA investment and exposing itself to Oracle license compliance gaps:

• Not knowing exactly what you got out of the ULA. Whether renewing or certifying, companies should have an exact assessment of how much value they got from the ULA relative to list price and typical Oracle discounting. This value assessment is crucial, and should be done prior to exiting or renewing a ULA, and prior to signing any further agreements with Oracle. This insight will help in certification assessments, and any related purchases like Pool of Funds purchase that may follow a ULA, or for renewing ULAs, as it will give a company guidance on ULA renewal negotiations and what price point they should target.
• Unknown license compliance gaps. Use of Oracle products not on the ULA or their usage outside of defined restrictions are license compliance gaps that ULA customers often miss. These gaps can come as last minute surprises while working with Oracle during the terminal phase of the ULA. Whether renewing or certifying, companies should do a through internal Oracle license assessment to identify any license gaps due to use of non-ULA products and/or use of ULA products outside of any stipulated restrictions. Companies should address these gaps on their own terms and timelines, as opposed to being dictated to resolution by Oracle’s auditors. An example of this could be a company that upgrades from Database Enterprise Edition 11g to 12c during the ULA term and starts using the Multitenant Option that was not originally on the ULA. DBAs may have started doing this without management’s knowledge of the licensing impact, thus exposing the company to Oracle compliance risk due to Multitenant usage.
• Value left on the table. For customers choosing to exit the ULA and therefore certifying their deployments, under-certifying or miscounting their ULA deployment quantities can translate to millions of dollars being left on the table. The process of counting the deployments accurately itself is complicated and entails all sorts of complexities and raises important questions. How do you correctly count Database Options & Packs? How do you assess VMware deployments and how does that impact the post-ULA planning? (hint: this is a crucial consideration for customers with Oracle in VMware since Oracle’s position on VMware is different from ULA to post-ULA). Suppose a company had WebLogic Suite on its ULA and under-counted the processor cores due to incorrect core factors or hyper-threading. The company could leave significant, unclaimed value in WebLogic Suite licenses while exiting the ULA. Similarly, Database Options and Packs are tricky to correctly count and are easy to miss.
• Compliance gaps due to miscounting. As a corollary to the above, the other side effect of under-counting or miscounting your ULA program deployments is that immediately post-ULA, the very value left unclaimed while exiting the ULA will become a license compliance liability requiring immediate purchase of licenses. Think of it as a pendulum swinging. First you lose unrealized value by not counting your deployments correctly. Then, the day you complete your (incorrect!) certification, the pendulum swings to the other end, which is license non-compliance, and requires immediate purchase of Oracle licenses to address the under-counting or miscounting. An expensive double whammy.
• Oracle auditors getting involved. Counting ULA deployments is daunting. Oracle offers “help” in the form of its license auditors offering to “assist” using their own scripts and tools. They effectively convert a ULA certification into a soft audit. The effect of this is threefold:
  • Firstly, if the customer is not intimately knowledgeable of what the Oracle scripts do, they will miss the fact that Oracle collects excessive, and often times unnecessary, data as part of this “assistance”. Why give them this data if you are not contractually obligated to do so?
  • Oracle will analyze the data and simply inform the customer of how much credit they will receive without much insight into details. As such, Oracle may (and often does!) deny full credit to the customer based on undocumented, contractually unfounded “policies” and methodologies. The customer may not realize where Oracle has decided to arbitrarily deny them full license credit for products deployed.
  • By relying on Oracle’s scripts or other form of “assistance”, customers expose any unknown license compliance risks directly to Oracle’s auditors and put themselves as risk of contract violation, and not have the opportunity to plan the resolution on their own terms and timeline.

The above are just some of the issues and complexities that can prevent an Oracle ULA customer from fully realizing the full potential of their ULA investment. Furthermore, the above points only address the issues that arise at the end of the ULA. Not addressed above is the planning and management needed throughout the ULA lifecycle to optimize the ULA investment – we have dealt with too many customers that did not plan their ULA program deployments early enough. Before they knew it, their ULA terms came to an end and resulted in significant under-deployment and poor value obtained from their ULA.

Maximizing the return on your ULA investment, while minimizing your license compliance exposure, is best done with help from experienced, ex-Oracle license auditors that have seen their fair share of ULAs. If you need assistance with a ULA at any stage, reach out to us for a consultation or read more about our ULA Service.

Related links

• Oracle ULA - Home
• Oracle ULAs Explained
• Oracle ULA - Lost Value and Compliance Risks
• What happens if your Oracle ULA “certification” is not good enough?
• Oracle ULA Certification: Should you run LMS’s scripts?
• Oracle ULA Management - How We Can Help
• Oracle ULAs in Third Party Clouds - How We Can Help