Unlimited license agreement

Decoding Oracle ULA Pricing

Unlimited license agreement

Decoding Oracle ULA Pricing

Oracle ULA Pricing:

  • No fixed price list; each agreement is unique.
  • Multiple pricing models exist for discounts, growth, budgets, historic spending, and Audits/compliance.
  • Oracle forecasts prices 11 months before expiration.
  • Prices are designed to maximize Oracle’s revenue.
  • Clients must negotiate and plan to secure favorable terms.

Decoding Oracle ULA Pricing

Oracle ULA Pricing

Complexity of Oracle ULA Pricing

Oracle doesn’t have a fixed price list for ULAs. Each agreement is unique and customized, making the pricing process quite complex.

Multiple pricing models exist, and clients must carefully analyze each to select the best fit for their needs.

Oracle’s Forecasting Strategy

Oracle forecasts ULA prices eleven months before the agreement’s end date. This forecast aims to meet Oracle’s revenue targets. The proposed pricing models are crafted to maximize Oracle’s revenue.

Clients must develop a solid deployment strategy and pricing model that aligns with their goals. Effective planning and negotiation are crucial.

Busting Oracle Price List Myths

Misconceptions about Oracle’s Price List

The price list doesn’t reflect the software’s actual value or development cost. Instead, Oracle’s list prices are designed to maintain high support fees and extract maximum revenue while expanding market share.

This misalignment can lead to misconceptions about the true cost and value of Oracle’s products.

Securing Competitive Oracle ULA Pricing

Securing Competitive  ULA Pricing

Challenges in Pricing Negotiations

Many clients wait for Oracle to set prices, leading to high costs. Developing a reasonable, defendable, and explainable pricing scenario is crucial. This approach helps in negotiations and ensures that clients are not overpaying.

Strategies for Competitive Pricing

  • Analyzing Various ULA Pricing Models: Review all available ULA pricing models to find the most beneficial one.
  • Comparing ULA Pricing Models with Alternatives: Evaluate and compare different pricing models and alternatives to ensure the best deal.

These strategies can help businesses navigate the complex landscape of Oracle ULA pricing and secure more favorable terms.

Companies can achieve better outcomes in their ULA negotiations by understanding the intricacies of Oracle’s pricing methods and preparing adequately.

Oracle ULA Pricing Models

ULA Pricing Models

ULA Discount Model

If a client has 1,100 DB licenses deployed and expects to need 1,375 in three years, Oracle will estimate a higher future demand. They then apply a high discount to make the deal more appealing. This approach leverages projected needs to justify significant discounts, ensuring the deal appears attractive.

ULA Growth Model

  • Oracle may propose a three-year ULA for clients with an existing ULA spending €11M annually on support.
  • This model can be advantageous if the client’s revenue is expected to grow by 11%.
  • This model is particularly beneficial if linked to items with the least expected increase, directly tying pricing to anticipated revenue growth.

ULA Budget Pricing Model

When a client can only spend €4.4M on a ULA extension, Oracle adjusts the ULA to fit this budget. This might involve:

  • A shorter term
  • Restricted use licenses
  • Additional certification prohibitions

However, budget constraints could limit the ULA’s scope or duration, providing a more manageable cost structure.

ULA Historic Spend Model

Oracle bases new pricing on past expenditures. For example:

  • If a client previously paid €5.5M and is growing, the new ULA might be priced at €8.8M.
  • If the client is shrinking, Oracle may keep the previous pricing but emphasize flexibility and consolidation benefits.

Adjustments depend on whether the client is experiencing growth, stability, or shrinkage.

Oracle Audit/Compliance Pricing Model

Non-compliance findings during an audit can significantly impact pricing. Oracle might offer a new ULA at a reduced price to cover the shortfall, such as:

  • Offering a $16.5M ULA for $33M worth of non-compliance.

This model is generally the least favorable for clients, resulting in higher costs following compliance issues.

Timing Your Oracle ULA

Optimal Timing for Signing ULAs

  • ULAs signed at the end of May typically offer 28% more value.
  • Other optimal times include the last week of February, early May, early February, and late November.

Signing during these periods can lead to lower costs or better terms, making it crucial to strategically plan the timing of the ULA signing. Proper timing can significantly affect the overall value and terms of the agreement.

By understanding these pricing models and optimal timing strategies, businesses can better navigate the complexities of Oracle ULA pricing. This knowledge enables more effective negotiations, helping secure terms that align with business goals and budget constraints.

FAQs on Oracle ULA Pricing

What is an Oracle ULA? An Oracle ULA (Unlimited License Agreement) is an enterprise agreement that grants unrestricted deployment rights for certain Oracle products during the agreement term.

Why do businesses opt for Oracle ULAs? Businesses choose Oracle ULAs to manage software costs, simplify license management, and support large-scale deployments without worrying about individual license counts.

What are the main challenges with Oracle ULAs? Common challenges include inadequate contract negotiation, excessive product inclusion, and the pressure of compulsory renewals or compliance bills at the end of the term.

Is there a standard price list for Oracle ULAs? No, there is no standard price list. Each ULA is tailored to the client’s specific needs and circumstances.

How does Oracle determine ULA pricing? Oracle forecasts ULA prices eleven months before expiration, aligning their pricing models with revenue targets and client usage estimates.

What is the ULA Discount Model? In this model, Oracle estimates high future demand and applies significant discounts based on the client’s projected deployment to make the deal appealing.

How does the ULA Growth Model work? This model links the pricing to expected revenue growth, making it beneficial if tied to items expected to grow the least, such as specific licenses or support costs.

What is the ULA Budget Pricing Model? This model fits within the client’s budget constraints, possibly resulting in a shorter term, restricted use licenses, or additional certification prohibitions.

What factors influence the ULA Historic Spend Model? Oracle bases new pricing on previous expenditures, adjusting for company growth, stability, or shrinkage to propose a suitable ULA.

How does the Oracle Audit/Compliance Pricing Model affect clients? If non-compliance is found during an audit, Oracle may offer a new ULA at a reduced price to address the compliance shortfall. This is often the least favorable model for clients.

When is the best time to sign an Oracle ULA? The optimal times include the last week of May, the last week of February, early May, early February, and late November. Signing during these periods can offer better value.

Why is timing important when signing an Oracle ULA? Timing affects the cost and terms of the ULA, with specific times of the year potentially offering lower costs or more favorable terms.

How can a company secure competitive Oracle ULA pricing? By creating a pricing scenario that is reasonable, defendable, and explainable to Oracle. Analyzing all pricing models and picking the most advantageous one is key.

Why do some companies struggle with Oracle ULAs? Struggles often stem from poor contract negotiation, including too many products, leading to unused support, and dealing with compulsory renewals or compliance bills.

What strategies can help negotiate a better Oracle ULA? Clients should review various pricing models, compare them with alternatives, and develop a clear, defendable deployment strategy that meets their business objectives.

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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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