1. COMPANIES ARE NOT AWARE THAT THE ULA EXIT PROCESS INCLUDES A LICENCE AUDIT
Oracle will carry out a so-called “stealth audit” at the end of your ULA.
Here, Oracle assumes that a system measurement based on an Oracle audit tool will be carried out after your ULA contract expires. This tool not only recognises what Oracle products are currently being used, but also what was used in the past. We see time and time again that customers have unknowingly used DBA functionalities that require a licence but are not part of the ULA contract in question.
Oracle audit tools also collect data on products that are not part of your ULA.
Together with our partner Redress Compliance, we have helped over 40 organisations to terminate or renew an Oracle ULA and for none of them were the results compliant with the corresponding ULA contract. The licence gaps ranged from one million USD up to 500 million USD.
Recommendations:
Conduct your own licence survey in advance to ensure maximum flexibility and a variety of options to choose from. You should be in control of how you minimise your ULA licensing risks. It would be a big mistake to rely on a SAM tool for this. It is important that you use scripts similar to Oracle LMS (Oracle Licence Management Services) to determine your licensing position. You can request these scripts from Oracle or work with a licensing expert who will usually have created their own scripts.
A combination of SAM / inventory tools and Oracle audit scripts will always give the best result.
2. ORGANISATIONS HAVE MISTAKENLY DEPLOYED ULA SOFTWARE IN A THIRD PARTY CLOUD SUCH AS AWS /AZURE/GOOGLE
While you are in an Oracle ULA, you can freely deploy the ULA software to any third-party cloud as long as the cloud zone is within your territory deployment rights. Check the territory clause in your ULA contract).
The “gotcha” moment occurs when you leave your Oracle ULA and submit the provisioning data to Oracle LMS for verification. At this point, Oracle will tell you that you are not compliant for all your third-party cloud deployments such as AWS and Azure. As Oracle’s standard contract terms prohibit you from counting deployments in the third-party clouds towards your exit counts.
Oracle will then propose a new ULA to address these issues and you may have to pay millions to Oracle even though you don’t need a new ULA.
Recommendations:
Review your certification clause that describes your rights to count cloud deployments against your ULA exit numbers. If your contract does not allow you to count the cloud towards your certification, you need to ensure that your ULA deployments are on-premise or that you only have temporary deployments in the cloud.
Even better, negotiate usage rights in the ULA that allow cloud deployments even if you leave the ULA.
3. COMPANIES DO NOT USE ORACLE LICENSING POLICIES FOR VIRTUALISATION TO OPTIMISE THEIR ULA
Oracle licensing policies/rules around virtualisation are often difficult to understand.
But while you are in an Oracle ULA, the Oracle licensing policy can be used to your advantage.
Oracle sometimes uses unfair tricks here, e.g. that you cannot count licences according to their licensing policy when you leave your Oracle ULA. This is wrong, ignore statements from Oracle to this effect.
We have helped over 40 companies exit Oracle ULA and every single one of them has used virtualisation to improve their numbers. If we also include our network of Oracle consultants who have helped companies with Oracle ULAs, it’s probably 200. Everyone is using virtualisation to increase their ULA exit numbers.
Recommendations:
Deploy as much Oracle SW as possible in virtualized environments. This will boost your Oracle ULA numbers. Oracle may say you can’t count everything to your exit numbers. Ignore what Oracle says. Experience shows that in the end they will accept your data. They have done it for hundreds of other companies that have left Oracle ULAs.
4. COMPANIES BELIEVE THE COST OF ORACLE SUPPORT WILL RISE AFTER THE ULA
Companies often mistakenly believe that support costs will increase after they exit their Oracle ULA. When your ULA expires, you are contractually obligated to provide Oracle certification/deployment figures. Many believe that support is recalculated based on their usage figures. This is wrong. The support fees are not increased based on your usage figures.
Your support fee remains the same as when signing your ULA (only 0-5% annual increase). This is the main reason why many Oracle ULAs are underutilized, as companies intentionally keep usage numbers low.
Recommendations:
If you have signed an Oracle ULA, it is important that everyone involved in the provision of Oracle software understands how the ULA agreement works.
Also from a compliance perspective, it is important to understand which products are part of the ULA and which products often cause compliance problems.
You should organise an internal ULA training to raise awareness of ULA in your company. You’ll get more out of your Oracle ULA and have fewer compliance issues.
If your company has an internal performance accounting system to allocate the costs of the ULA, the costs should not be allocated according to the number of systems in place per organisation. This only leads to the parties not using the ULA because they are reluctant to use more Oracle products.
Customize your billing model to make it cost-neutral as more Oracle ULA products are deployed.
5. COMPANIES ARE NOT MAXIMIZING CURRENT ULA INVESTMENTS.
A fellow consultant reports: “When I worked at Oracle, it was not uncommon for ULA customers to come up to me and ask for an extension of their ULA. A common reason for requesting the extension was that they had not implemented the software at the pace they had originally planned. Now they were willing to pay Oracle more money to extend the Oracle ULA for another 1-2 years. ”
It can be seen that this money has been spent unnecessarily. Had they coordinated the ULA contract with the technical implementation management, such an extension might not have been necessary.
On the other hand, it is not uncommon for companies to certify their Oracle ULA and then 1 year later find that they need to purchase additional licenses from Oracle. This can also be avoided by maximizing the number of implementations before terminating your ULA.
Recommendations:
If you are in the runtime of an Oracle ULA and currently have 1,000 processors licensed for Oracle software, your goal should be to maximize deployments to reach 1,500 or even 2,000 processor licenses.
By maximizing deployment numbers, you minimize the risk of having to purchase additional licenses from Oracle in the future.
Once the ULA is certified by Oracle, you can often consolidate up to 50% of all your licenses and create a large license buffer. This license buffer can also serve as a protection against future license gaps.
6. EXPECT FROM ORACLE THAT YOU WILL BE TREATED FAIRLY
Are there any companies that still trust Oracle LMS and Sales to treat you fairly?
Oracle has abused the trust of many customers. There can’t be many people who trust Oracle to treat them fairly and make them a good offer.
First, the pricing of Oracle ULAs is not transparent, there is no ULA price list. Pricing for a ULA is not based on your annual Oracle spend or the size of your business. The price is “invented” Oracle usually has several methods to determine a price for your ULA.
The most common approach is for Oracle to ask you how much growth you expect for your Oracle environments over the next 3 years. If you tell Oracle the growth numbers, Oracle will promise a price discount and create a ULA price. These ULA contracts are usually the most expensive. Instead, you should disclose as little as possible about your Oracle plans.
First, the pricing of Oracle ULAs is not transparent, there is no ULA price list. Pricing for a ULA is not based on your annual Oracle spend or the size of your business. The price is “invented” Oracle usually has several methods to determine a price for your ULA.
The most common approach is for Oracle to ask you how much growth you expect for your Oracle environments over the next 3 years. If you tell Oracle the growth numbers, Oracle will promise a price discount and create a ULA price. These ULA contracts are usually the most expensive. Instead, you should disclose as little as possible about your Oracle plans.
We recommend that you be told a price you are willing to pay. Oracle will accept your available budget. If Oracle cannot meet your budget requirements, you should be prepared to terminate your Oracle ULA. (Here’s a secret: Usually Oracle always meets your budget limits)
AT THE END OF YOUR ORACLE ULA YOU HAVE 2 OPTIONS
Option 1:
If you agree to use the Oracle audit tools, then hand over the output to Oracle, even if it shows a license gap of EUR 20 million. You can rest assured that Oracle will be nice and propose an extension of the ULA for EUR 10 million.
Option 2:
You perform the survey yourself using Oracle tools and have the results analyzed by a licensing expert. You may need to renew the ULA to resolve the compliance issues, but then you can negotiate with Oracle without informing them of the problem. The ULA could be offered for EUR 2 million. The most important thing is that you know your position on license compliance before handing the data over to Oracle.
Recommended procedure: Select Option 2 for ULA certification. It could bring the biggest ROI of all IT projects your company is doing this year.
Get help from an Oracle licensing expert.
This article was written by SAMtoa together with our partner Redress Compliance.
The Author
Wolfgang Stratenwerth
Managing Director and License expert of SAMtoa GmbH