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Oracle ULA – What are the dangers and how do you avoid them?

by 2 Mar 2020

Home / Expert Advice / Oracle ULA – What are the dangers and how do you avoid them?

 

Hazel Hopes, Consultant, Certero

An Oracle ULA (Unlimited License Agreement) is a time-based contract for unlimited use of a subset of agreed Oracle products. However, this “all you can eat” option often results in organizations paying significantly more for their Oracle licensing than they expected, which can lead to uncomfortable conversations with finance colleagues and senior management.

 

Oracle ULAs typically run for a period of three years. At the beginning of the ULA you agree to convert any existing perpetual licensing you have and then pay a “total support stream” fee for each year your ULA is in place. This fee may increase annually by a percentage and should be defined within your contract.

Due to the nature of the agreement, organizations often assume that they are free to consume as much of the Oracle software covered in the ULA as they feel the need for. After all, if licenses are “unlimited” and the bill is paid there is no reason to worry, right?

Unfortunately, many organizations discover this simply isn’t the case and find themselves stuck paying a high “total support stream” cost, which is not value for money when compared to the products they actually use.

 

What are the limitations of a ULA?

The limitations of a ULA are governed by the clauses within the agreement. Some ULA clauses are product and usage related, whilst others refer to your organization or the term of the ULA. When your ULA term ends you have two choices: you can certify and declare your usage to Oracle, or you can extend your ULA for a further three years (or more).

Certify

When you certify, you are declaring your usage of Oracle products and have to abide by Oracle’s certification clause in the ULA. Once received, Oracle will use this information to determine the number of software licenses to grant to your organization.

Extend

Extending usually happens when a business realizes the complexity of its Oracle estate is too great and, rather than face having to declare all usage, the easiest option is to extend the agreement by another three years or more. However, at the end of the extended agreement, you’ll face the same choices and potentially the same issues – but on a much larger scale.

 

What are the dangers?

The main dangers associated with the Oracle ULA are largely caused by a failure to control the Oracle estate, or a failure to determine the value of the ULA before entering into one.

Failure to determine the value of the ULA

The ultimate goal is to ensure the fees you are paying are a good return on the products you are using. If your Oracle consumption grows during the ULA period (within the parameters of the ULA), the agreement can deliver huge cost savings when compared to purchasing licenses individually. But, if your consumption decreases, you will almost certainly overpay for your licenses. It is important to understand your current and predicted future usage to estimate? the cost-benefit of any potential ULA.

Toxic consumption of Oracle products outside the ULA

While the ULA is touted as an “all you can eat” deal, the fact is it does not cover all situations. What this means is you can be easily led into a false sense of security and consume Oracle software in ways that are not covered under your agreement. Inevitably, this will lead to an unforeseen bill at the end of your ULA or, worse, a breach of deployment terms that means you will be forced to certify earlier than planned. This can only truly be mitigated by carefully controlling the Oracle estate and future usage.

Failure to control the Oracle estate

If you leave your Oracle estate unmanaged, you may find it very difficult to accurately declare your usage at the end of your term. What this means is you may have to extend your ULA by a further three years or more, even though cheaper licensing alternatives may be available, simply because you cannot accurately tell Oracle what you’ve used.

Continued failure to take control of your Oracle software and accurately declare your usage can put you into a cycle of never-ending ULAs. However, in such a scenario Oracle may demand a declaration. Failure to provide one comes with its own financial and legal complications.

 

Advice from the Oracle licensing experts: How to avoid a ULA disaster by managing toxic consumption & escalating costs.

If you don’t have an Oracle ULA but are thinking about entering into one, our advice would be to first commission an Oracle Effective License Position. Having a truly accurate benchmark of current consumption and liability will give you much greater clarity of the attractiveness of an Oracle ULA.

It will also help you start to establish a level of governance that, if applied continuously through the term of the ULA, will ensure you avoid the pitfalls outlined earlier in this article.

If, on the other hand, you already have an Oracle ULA, but don’t have full visibility and control of your software assets, you should procure the necessary tools and skills to achieve it. This will help you decide whether or not remaining in a ULA agreement delivers a satisfactory ROI. If not, you can prepare for a declaration at the end of the ULA term knowing what you are likely to pay. You will also have the necessary intelligence to fight back in an audit situation, should you need it.

Getting visibility and control of your Oracle estate is also important to identify any toxic consumption of Oracle products outside the scope of your ULA. With this insight you can plan to reduce/eliminate this type of consumption before your term ends.

Control over your Oracle estate will give you all the necessary intelligence you need to effectively manage your consumption and make informed decisions about whether to certify or extend your deal at the end of your term.

Don’t leave it to the last minute!

For many organizations, taking a proactive management approach to the Oracle ULA seems to be something of an afterthought, often only looked at in the final months of the contract, and possibly a panic reaction to impending costs.

The problem with this approach is that by the final months of your ULA you will have no way of knowing where all your Oracle software is deployed. As a result, you’ll not be able to accurately declare your usage or mitigate any toxic consumption of products not covered by your ULA, risking significant increases in your costs.

 

How can Certero help you?

If you think that entering into an Oracle ULA is a guaranteed way of reducing the need to actively manage your Oracle estate and licensing, think again. If you want to enjoy the potential cost and administrative savings associated with an Oracle ULA then you need to factor in the cost of a program to manage the investment.

The two should go hand in hand – whether you run your Oracle license optimization program in-house with purchased tools (don’t think Oracle tools will do the job, they won’t) or you outsource the ULA optimization to a qualified services partner.

If you have in-house Oracle licensing experts you will be able to use an Oracle SAM solution, like Certero for Oracle, to manage your Oracle investments. However, if you do not have Oracle license specialists with the skills and experience required to use such a tool, Certero can provide a SAM managed service.

Whether you purchase your own tools for in-house delivery or outsource to a partner, your objective is to fully discover and inventory all your Oracle deployments. This will give you total visibility of your Oracle estate so you can manage your life cycles, consumption and licenses.

With Certero for Oracle, once you have completed your inventory and discovery project, your estate is automatically updated in real-time to give you full visibility of all your Oracle assets and help you achieve your objectives. Similarly, with Certero’s SAM managed services our Oracle licensing specialists can provide you with all of this information, along with expert advice and guidance to help you avoid the dangers and maximize the value from your Oracle ULA.

If you want to know more about how Certero can help you, contact our team today.

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