Case Study – Oracle ULA Optimization Service – Oracle ULA Exit Yields $4M Annual Savings for U.S. Manufacturing Company
Background
This case involves a mid-size manufacturing company in the United States, serving as a supplier to the automotive and aerospace industries. The company has around 5,000 employees and annual revenues of $2 billion.
The client entered an Oracle ULA for a 3-year term to support its rapidly expanding IT needs after a period of growth and acquisitions.
The ULA covered Oracle Database Enterprise Edition, as well as several database options (including Partitioning and Advanced Security), and Oracle middleware products used in their factory management and supply chain systems.
All Oracle workloads were running on-premises across multiple U.S. manufacturing plants and data centers, with some virtualization in use.
As the ULA neared its end, the company faced the pivotal decision to renew the agreement or certify its deployments. Their objective was to reduce ongoing costs while ensuring they retained the licenses needed to keep their operations running smoothly.
Challenges
The manufacturing firm’s challenges with its Oracle ULA were pronounced:
- Under-Utilized Licenses: Growth had slowed in the latter half of the ULA term. The company realized it had not deployed as many Oracle instances as initially projected. This meant the hefty upfront ULA investment wasn’t yielding full value – a classic “shelfware” situation, where they had paid for far more capacity than they used.
- High Support Costs: Oracle’s annual support fees (approximately 22% of the original ULA license value) were a significant financial burden. The company was paying over $1 million per year in support, with no reduction in sight if they continued with Oracle. Given that their actual usage was below expectations, this support cost felt disproportionately high and was consuming a significant portion of the IT budget.
- Renewal Pressure: Oracle account representatives were aggressively pushing the company to renew the ULA. The vendor emphasized that a renewal would “protect” the company from compliance issues, implicitly suggesting that exiting could expose them to an audit. This pressure was typical of Oracle’s approach – using the fear of compliance penalties to encourage renewal.
- Audit Risk on Exit: If the firm chose to certify out of the ULA, it had to ensure that every Oracle deployment was accounted for. There was concern about a few Oracle Database instances in test environments and a legacy JD Edwards ERP system that had been recently brought under Oracle support. These had to be carefully checked to ensure they were covered by the ULA or otherwise licensed. Any oversight could trigger an audit and result in hefty fees after the ULA.
- Strategic Direction – Third-Party Support: Concurrently, the company’s CIO was exploring the option of moving to third-party support for Oracle software to reduce costs. This would only be viable if they exited the ULA with all necessary licenses in hand. Oracle does not permit third-party support under an active ULA (since it includes support), so the only path to cheaper support was to leave the ULA and own the licenses outright.
How Redress Compliance Helped
Redress Compliance was engaged to provide an independent review and strategy to optimize the Oracle licensing position.
The team carried out a methodical plan tailored to the manufacturer’s situation:
- Comprehensive License Audit: Redress performed a full inventory of the company’s Oracle deployments. This audit covered every Oracle Database instance (production, development, testing) and the JD Edwards ERP modules in use. The findings revealed that several non-production databases were running options (such as Partitioning) that could be turned off or consolidated, and the JD Edwards system was fully covered under the ULA’s product list.
- Usage Maximization Plan: Given the under-utilization, Redress recommended proactively expanding Oracle deployments in a controlled manner before ULA expiration. Key business applications were identified where additional Oracle Database instances could improve performance or redundancy. By scaling up those deployments (within the bounds of genuine business need), the company increased the count of Oracle processor licenses it would ultimately certify. This ensured they maximized the value of the “unlimited” period, rather than leaving licenses on the table.
- Compliance Remediation: The team addressed potential compliance gaps. For the test environment databases running extra options, Redress guided the IT staff to either disable unneeded features or include those databases in the final certification count if they provided value. Every deployment was cross-checked against ULA inclusions so that nothing fell through the cracks. This remediation work eliminated the risk of surprises during Oracle’s review of the certification.
- Exit Strategy & Third-Party Support Roadmap: Redress advised the company not to renew the ULA, given the cost-saving opportunities. They outlined a clear exit strategy: certify all entitled usage and then transition to a third-party support provider immediately after ULA conclusion. A detailed timeline was created to ensure a seamless transition of support without any lapse in coverage. Redress also helped the client prepare communications to Oracle, formally notifying them of their intent to certify and transition support, preempting Oracle’s typical last-minute renewal pitches.
- Negotiation of Post-ULA Terms: In parallel, Redress assisted in brief negotiations with Oracle to secure assurances regarding certification. The company wanted confirmation that certain legacy components (like the JD Edwards licenses) would be counted as perpetual licenses at exit. Redress’s experts, familiar with Oracle’s contract language, ensured that these details were included in the certification documentation. Oracle, seeing a well-prepared customer, raised no objections to the certification approach.
Outcome and Impact
The results for the manufacturing client were transformative:
- Successful ULA Exit: The company successfully certified out of the Oracle ULA on schedule, with a final count of Oracle Database and JD Edwards licenses sufficient to meet its needs. They avoided signing a costly renewal, immediately halting any new license fees.
- Major Cost Savings: By moving to third-party support after exit, the firm saved approximately $4 million annually in Oracle support costs. This figure represents the difference between Oracle’s maintenance fees and the third-party provider’s fees over a year. Over three years, that’s about $12 million in savings – funds now available for other IT and operational investments. These savings were especially impactful for a mid-size company operating on thinner margins than larger enterprises.
- Maximized License Value: Through the late-term deployment boost, the client ended the ULA with hundreds of Oracle licenses certified – an asset valued at roughly $120 million in list license terms. This means the organization got full value for its investment from the ULA, having scaled up usage to match what it paid for. These licenses are now perpetual, allowing the company to use them indefinitely without additional license purchases.
- Mitigated Compliance Risk: Redress’s meticulous audit and remediation meant that at certification time, Oracle had no grounds to claim non-compliance. The client identified and resolved $52 million worth of potential license gaps (measured in list price value of software that had been deployed outside of entitlements) before Oracle could levy any penalties. By proactively addressing these issues, the company protected itself from what could have been a significant financial hit in an audit.
- Operational Continuity with Lower Costs: Following the ULA, all systems remained fully licensed and supported (now via a third-party provider). The switch to third-party support was seamless, and users noticed no difference in service levels. However, the IT department noticed a big difference in the budget: support costs were slashed by 50-60%. The company can continue to run its Oracle-based factory systems for years to come, without Oracle’s direct involvement, and with the freedom to consider alternative solutions on its own timetable.
- Vendor Independence: This outcome exemplified true vendor independence. The manufacturer is no longer tied into Oracle’s renewal cycle and has gained leverage. If Oracle audits them in the future, the company’s house is in order. If Oracle offers new products, the company can evaluate them on merit and price, rather than feeling compelled as part of a bundled ULA deal. This freedom is invaluable for long-term IT planning.
Client Quote
“Redress Compliance enabled us to turn a difficult situation into a big win. Their expertise in Oracle licensing is second to none – they showed us how to fully utilize our ULA and then guided us out of it without a hitch. Thanks to Redress, we slashed our Oracle support costs and ended a cycle of overspending. They truly acted as our advocate, not beholden to Oracle or any vendor, which gave us confidence every step of the way.” – IT Director, U.S. Manufacturing Company (anonymous)
Call-to-Action (CTA)
Struggling with high Oracle support fees or an expiring ULA? Reach out to Redress Compliance for a free Oracle ULA optimization consultation. We’ll help you assess your usage, explore third-party support options, and develop a road map to savings. Don’t renew blindly – let Redress Compliance show you how to optimize your Oracle licensing and liberate your IT budget.
Read about our Oracle ULA License Optimization Service.
Read about our other Oracle Case Studies.
