Introduction to Oracle ULA Pricing
Oracle’s Unlimited License Agreements (ULAs) are essentially Oracle’s enterprise agreements, offering restricted “unlimited” deployment rights.
However, a significant number of businesses find themselves discontented with their Oracle ULAs due to several factors:
- Inadequate contract negotiation: Many businesses do not negotiate the contract terms accurately, leading to restrictions incorporated in the contract.
- Excessive inclusion of products: Some businesses include excessive products in their ULAs, resulting in unused support. Oracle does not permit the shelving of any products.
- Compulsory renewals or compliance bills: Over 90% of businesses that wish to exit their ULAs at the end are either compelled to renew the ULA at a considerably higher cost or are faced with substantial compliance bills.
Decoding Oracle ULA Pricing
Oracle ULA pricing is not as simple as it seems. There is no standard ULA price list, and Oracle offers a variety of pricing models for its ULAs.
Oracle sales will forecast a ULA price eleven months before your ULA expiration and will promote the pricing model that aligns with Oracle’s revenue targets.
Therefore, it is up to the client to develop a ULA deployment strategy and pricing model that meets their objectives.
Busting Oracle Price List Myths
Oracle’s price list does not correlate with the value of the software to a customer or the effort required to develop that software.
Oracle’s list license fee is designed to protect Oracle’s support stream by making it cost-prohibitive to reduce support fees (repricing) and to extract the most money from the customer while gaining market share.
Securing Competitive Oracle ULA Pricing
Most clients wait for Oracle to tell them what the next ULA will cost. In this scenario, Oracle will use a model that results in a high price.
Because Oracle’s ULA pricing is “made up,” it is crucial for the client to create a pricing scenario that is reasonable, easy to defend, and explainable to Oracle.
There are at least five different ULA pricing models, and clients should analyze all models, pick the most advantageous one, and compare that with the alternatives to the ULA.
Oracle ULA Pricing Models
- ULA Discount Model: At the end of the current ULA, if a client has 1,100 DB licenses deployed and expects to have 1,375 DB licenses deployed in three years, the incremental deployment is 275. The future demand is a guess by Oracle and an estimate by the client. Oracle will guess high, and the client should estimate low. Oracle will apply whatever discount is necessary to make the deal work. For example, they will increase the future deployment estimate and apply a high discount to make the deal appear more appealing.
- ULA Growth Model: If a client has an existing ULA and spends €11,000,000 annually on support and has spent €49,500,000 in license fees with Oracle over time, Oracle is proposing a three-year ULA. Over the next three years, the client expects to grow the revenue by 11%. This is often an advantageous pricing methodology if you tie it to the item that will increase the least.
- ULA Budget Pricing Model: If a client tells Oracle they only have €4,400,000 to spend on a ULA extension, Oracle can craft a ULA to fit their budget. Suppose the client’s budget is lower than the sales forecast. In that case, there can be limitations in the ULA, such as a shorter term, restricted use/limited use licenses, and additional certification prohibitions.
- ULA Historic Spend Model: If a client has entered one or more ULAs, Oracle will look at previous spending and base new pricing on that amount. For instance, if a client paid €5.5m in license fees on a previous ULA and the client is growing, Oracle will price the new ULA at €8.8m. If the client has 0% growth, Oracle will add products to the new ULA and price it at €8.8m. If the client is shrinking, Oracle will price the ULA at €5.5m and tout the flexibility of consolidations.
- Oracle Audit/Compliance Pricing Model: This is the pricing model where Oracle found you non-compliant during a ULA certification or audit. If they find you are non-compliant with $33m, they may offer you a ULA for $16.5m. This is the least beneficial pricing model.
Timing Your Oracle ULA
The timing of when you sign your Oracle ULA can significantly impact its value. ULAs signed at the end of May typically have 28% more value than ULAs signed earlier.
The best times to sign are the last week of May, the last week of February, early May, early February, and late November. These timings can result in the lowest cost ULA or a similar cost but with more products and better terms.
In conclusion, understanding Oracle ULA pricing is crucial for any organization considering entering one of these agreements.
By debunking common myths, exploring pricing models, and providing tips for securing competitive pricing, this article aims to provide a comprehensive guide to Oracle ULA pricing.
Whether you’re a seasoned Oracle user or new to the world of enterprise software, we hope this article has provided valuable insights into Oracle ULA pricing.
FAQs on Oracle ULA Pricing
What exactly is an Oracle ULA?
An Oracle ULA (Unlimited License Agreement) is an enterprise agreement that offers restricted “unlimited” deployment rights.
Why do some companies struggle with their Oracle ULAs?
Companies often struggle with their ULAs due to inadequate contract negotiation, the inclusion of too many products leading to unused support, and compulsory renewals or compliance bills.
Is there a standard price list for Oracle ULAs? No
No, there is no standard price list for Oracle ULAs. Oracle offers a variety of pricing models for its ULAs.
How can a company secure competitive Oracle ULA pricing?
Companies can secure competitive Oracle ULA pricing by creating a pricing scenario that is reasonable, easy to defend, and explainable to Oracle. They should analyze all ULA pricing models and pick the most advantageous one.
What are the different Oracle ULA pricing models?
There are at least five different ULA pricing models: ULA Discount Model, ULA Growth Model, ULA Budget Pricing Model, ULA Historic Spend Model, and Oracle Audit/Compliance Pricing Model.
When is the best time to sign an Oracle ULA?
The best times to sign an Oracle ULA are the last week of May, the last week of February, early May, early February, and late November.
Call to Action
If you’re not satisfied with your Oracle ULA pricing or if you’re finding the process overwhelming, don’t hesitate to reach out to Redress Compliance.
Our team of experts can provide the guidance and support you need to navigate Oracle ULA pricing and ensure you’re getting the best possible deal.
Contact us today for a consultation.