An Oracle Unlimited License Agreement (ULA) is a contractual agreement with Oracle that provides a customer with (typically) an unlimited volume of licenses for a specified set of Oracle products and for a fixed duration, typically for a 3-year period.
For Oracle, it is a way of securing reoccurring revenue, as maintenance becomes fixed and historic perpetual licenses are generally consolidated into a single agreement, making it challenging to extract and terminate licenses after everything has been effectively bundled together.
A common misconception of an Oracle ULA license is that you can deploy as much of any Oracle software as you wish, and that you have mitigated any risk of an official audit.
In reality, an Oracle ULA is only for specified products and some volumes may still be capped, whilst others are ‘unlimited’… (up to a potential limit of 100,000). An example would be where database products and options are unlimited, but Real Application Clusters (RAC) or Advanced Security are restricted to an agreed volume.
Benefits of an Oracle ULA include financial predictability and freedom to increase your usage of the products at a time to suit you, as a fixed price is negotiated for the deployment of the specified products, for the agreement term.
Oracle cloud customers can also take advantage of Bring Your Own License (BYOL), to save ~33% on support through the Oracle Support Rewards program. Allowing them to save money on their cloud deployments.
ULAs can also provide great flexibility to deploy products in a controlled way within virtualized environments, without having to worry about license compliance.
A ULA can therefore support agility, but the timing, lifespan and eventual exit of the agreement requires careful consideration, planning and execution.
When a customer signs a ULA then the best day to consider the implications of the exit is the day after purchasing it.
Customers could reduce 3rd party spend by replacing the use of the existing software with oracle products included within the ULA. This can make a ULA financially attractive as the investment in oracle can reduce other 3rd party spend.
Oracle ULA’s suit organizations in a pattern of growth, where they want the flexibility to deploy what they need at a time that suits them. But it’s a long-term commitment, so what happens if business takes a downturn? or if the business is sold or acquired by another company? Or there is a change in the products required within the business.
The reality is that you’re not in a flexible position if your requirements change or diminish and the ULA is no longer fit for purpose.
For example, your support costs are fixed at the point that the ULA agreement is made. This means that the cost is fixed regardless of the volume of products deployed throughout the ULA term. This can be beneficial, particularly if more software is deployed than initially expected, and you pay a premium for this privilege. The maintenance costs are often fixed within the ULA for the period after a ULA expires.
However – when you sign up to a ULA, typically your existing licenses will generally be terminated and incorporated into the new ULA. This means that the existing maintenance spend will be incorporated into the new ULA maintenance costs.
This consolidation can make it challenging to break the single support agreement if you need to downsize and products are no longer needed at a later stage. Therefore, it can be a better strategic option to not merge your existing licenses into the ULA, especially if it is possible that you’d want to down-size and eliminate support costs in future.
An Oracle ULA should therefore be considered as a ‘strategic’ purchase, when the benefits can be realized throughout the term and you can commit to the on-going maintenance costs after the ULA period.
One of the biggest mistakes Oracle ULA customers make, is failing to appreciate the boundaries of the agreement and falling into the trap of deploying Oracle software that is not covered under their agreement.
This non-compliance is inevitably identified when the certification process is carried out at the end of the ULA term and the resulting penalties can make it so expensive that the best option is to renew the ULA at an inflated price, even if that is not your desired strategy.
Generally, a ULA is a non-cancellable agreement for the term, however the ULA may have it written in to your terms and conditions that your may be able to cancel under specific conditions (For example, the ULA may require you to give Oracle a certain amount of notice before canceling, or it may allow you to cancel only for certain reasons, such as if Oracle breaches the agreement). If the agreement allows it, then customers should consider the following implications:
When you exit the ULA, you are contractually obliged to declare what Oracle software you have deployed via an Oracle ULA Certification – this is essentially an Oracle audit and needs careful preparation.
Hopefully, Oracle agree with your measurement and declaration, but be prepared for Oracle to question your data (therefore its recommended to use an Oracle LMS verified solution like Certero for Oracle).
Once the certification is completed, Oracle will convert the licenses into standard perpetual licenses.
Deploying Oracle products to certain virtualization platforms during the ULA period can cause problems at certification time if insufficient licenses have been allocated to meet with oracles partitioning policies for the specific hardware / software partitioned environments (e.g: VMware) so you should ensure you have allocated sufficient in declarations.
Remember – your ongoing support costs after the ULA expires are generally defined within the ULA irrespective of what quantity of licensed products you are actually using at the end of the ULA.
An Oracle ULA can offer great advantages to customers but it is a strategic commitment that is not easily reversed.
License compliance must be maintained for the duration of the deployment period. Failure to manage the ULA correctly during the deployment period will often result in additional costs when existing the ULA.
Be sure to govern your ULA from the beginning and engage the help of independent Oracle licensing experts who can leverage Oracle LMS-Verified technology solutions to give you full visibility of your Oracle deployments and help to strategize and navigate the ULA and post-ULA process.
Certero Professional Services allow you to easily expand your internal Software Asset Management team with Certero’s specialist global team of Software Asset Management (SAM) experts, all working in harmony with Certero technology to deliver a complete, unified, enterprise-class Software Asset Management service.
Certero’s dedicated Oracle licensing specialists use Certero’s own Oracle LMS-Verified Technology solutions to deliver advanced Technology-Led Services to customers, providing real-time visibility of Oracle software deployments across a full enterprise-scope.
The Certero for Oracle solution is formally verified by Oracle License Management Services (LMS) in all three categories: Database & Database Options, Fusion Middleware and Oracle Java SE.