Oracle Contracts

10 Terms to Negotiate in the Oracle Ordering Document

Introduction to Oracle Ordering Document.

Understanding Oracle contracts is crucial for effective license management and cost optimization.

This article will delve into the key terms of Oracle contracts and how they impact license management and cost optimization.

Two Main Oracle Agreements

When purchasing Oracle software licenses, customers are required to sign two central contracts:

  1. Oracle Ordering Document: This document contains the purchased products, quantities, and licensing terms. It serves as the primary contract for the purchase of Oracle software licenses.
  2. Oracle Master Agreement (OMA): This document contains the general terms and conditions for using Oracle software, including the audit clause, indemnification, and technical support terms.

It’s important to note that if there’s a discrepancy between the Oracle Ordering Document and the OMA, the terms in the Oracle Ordering Document supersede those in the OMA.

Understanding the Oracle Ordering Document

The Oracle Ordering Document is a crucial part of Oracle licensing. It outlines the specific products and quantities being purchased, along with the licensing terms. Here are some key aspects to consider:

  • Products: The document lists the specific Oracle products being purchased. Understanding what each product does and how it fits your organization’s needs is essential.
  • Quantities: The document specifies the number of licenses purchased for each product. This directly impacts the cost of the licenses and should align with your organization’s usage needs.
  • Licensing Terms: The document outlines the terms under which the licenses are granted. This includes the license model (e.g., per processor, per user), any restrictions on use, and the license term.

10 Terms to Negotiate in the Oracle Ordering Document

When dealing with the Oracle Ordering Document, there are several terms that you can negotiate to optimize your license management and cost. Here are some key terms to consider:

  1. Customer Definition defines which legal entities may use and access the Oracle software. The best practice is to include the parent company and all majority-owned subsidiaries. Work with your legal team to ensure all entities are covered.
  2. Territory: This specifies in which countries you may deploy Oracle software. Ideally, this should be worldwide to avoid geographical restrictions.
  3. Technical Support: Oracle support increases by 8% year on year. You should negotiate this increase as low as possible, ideally between 0-8%.
  4. Oracle Price Hold: Negotiate a fixed discount for additional purchases of Oracle software in 2 years. This can help control costs for future expansions.
  5. Divestment: Negotiate terms so that if you divest an entity, that entity may continue to use Oracle software for 12 months after acquisition.
  6. License Assignment: Negotiate terms that allow you to assign licenses to another legal entity that is part of your corporate group. This can provide flexibility in managing your licenses.
  7. Oracle Support Rewards: Negotiate the right to reduce 25% of any Oracle Cloud Infrastructure (OCI) spent towards your Oracle technical support. This can help offset support costs.
  8. Test and Development: This must be negotiated if you want to license test and development environments differently than production.
  9. Disaster Recovery: To get a lower cost license, negotiate disaster recovery licensing differently than production. This can help reduce costs for your disaster recovery setup.
  10. Successor Products: If you want to ensure that you can upgrade to future product versions without additional cost, include this contract term.

You can optimize your Oracle license management and control your costs by negotiating these terms in the Oracle Ordering Document.

Remember, each organization’s needs are unique, so work with your legal and IT teams to determine the best terms for your situation.

Conclusion

Understanding Oracle contracts is crucial for effective license management and cost optimization.

By understanding the terms in the Oracle Ordering Document and the OMA, you can ensure that you’re purchasing the right products in the right quantities, complying with the licensing terms, and optimizing your costs.

Remember, if there’s a discrepancy between the two documents, the terms in the Oracle Ordering Document supersede those in the OMA.

Author

  • Fredrik Filipsson

    Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, improving organizational efficiency.

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