Oracle ULA -
For IT executives

If you have ever been asked, “What is an Oracle ULA?” You probably already know how it works and how much it costs to use Oracle products. A ULA is a type of contract that you have agreed to with Oracle, so you’ll want to make sure you know how to get out of it. In many cases, you can do this by sending Oracle a letter signed by a C-level executive. The letter should explain why you are terminating the ULA, and how many licenses are being certified.

When signing a ULA, you should ask whether the license you are signing actually covers unlimited products. An unlimited agreement will usually cover a number of products, but you don’t have unlimited access to them. You may also find that new products are released during the term of the agreement. While you can extend your contract, remember that it doesn’t mean you can use unlimited products. Most agreements only cover a set of products

ULA is the flagship licensing agreement for Oracle. Most software companies have enterprise agreements that are suited for their largest customers. Oracle is no different, they have named their enterprise agreement the Unlimited License Agreement. Oracle has been very successful in selling their enterprise agreement, but the agreement has a mixed reputation in the market, let us explain why;

Read about our ULA certification service

What is an Oracle Unlimited license agreement?

If you have ever been asked, “What is an ULA?” You probably already know how it works and how much it costs to use Oracle products. A ULA is a type of contract that you have agreed to with Oracle, so you’ll want to make sure you know how to get out of it. In many cases, you can do this by sending Oracle a letter signed by a C-level executive. The letter should explain why you are terminating the ULA, and how many licenses are being certified.

When signing the agreement, you should ask whether the license you are signing actually covers unlimited products. It will usually cover a number of products, but you don’t have unlimited access to them. You may also find that new products are released during the term of the agreement. While you can extend your ULA, remember that it doesn’t mean you can use unlimited products. Most agreements only cover a set of products.

The contract provides unlimited license deployment rights for a subset of Oracle products. The agreement typically lasts for a period of 3 years, but the term can be between 1-5 years. Oracle have a version of this agreement that does never expire, also know as the Oracle PULA or Perpetual ULA.

How does an Unlimited license work?

The first question that arises is how does an unlimited license agreement work? It is not enough to just agree to the terms of the contract. You must understand the terms and conditions before you can make a final decision. You pay a one time license fee that provides you with unlimited deployment rights for a subset of products. The unlimited period will end usually after 3 years, but it can be 1-5 years. There are no reporting requirements until the agreement is expiring.

Usually 6 months before your ULA is about to expire, Oracle will ask if you want to renew, migrate to a PULA or certify the agreement . If you decide to certify (exit) the agreement, you need to report deployment numbers to Oracle, its very similiar to what an Oracle license audit looks like. It is important to remember that your support will not increase based on your certification quantities, the support will remain the same as during the agreement. The number one mistake companies make is that they have accidentially deployed non ULA software and are found to be non-compliant during this “certification process” it often leads to a costly renewal of the ULA instead of exit.

ULA Pros

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If you have growth in Oracle software and are looking at purchasing Oracle software licenses with a list price for more than 2M USD. Entering an Unlimited license agreement provides a fixed cost for the Oracle products that can offer a most cost-effective way of purchasing Oracle licenses.

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While in the agreement, you can deploy on virtual environments without considering the licensing implications, this includes VMware. Oracle has always had a negative view on deploying Oracle on VMware when it comes to licensing. Oracle has required customers to license all physical cores in all physical hosts in all your VMware environments. ULA agreement turns the negative into a positive as deploying in virtual environments will gain more licenses when you exit the agreement .

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You can renegotiate old licensing agreements containing the products that will be part of the ULA agreement. Older licensing agreements will migrate into a new agreement. This is an opportunity to improve the licensing terms for your Oracle software investments.

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Unlimited License Agreement offers benefits for companies using Oracle Cloud. You can use the ULA software as BYOL to Oracle cloud. You will also get a 33% return on your support bill if you utilize Oracle support rewards program.

ULA Cons

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The company will away the right to partially terminate licenses and connected support when entering the ULA. “Unbreakable contract”

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Companies are often found to be non-compliant with the agreement if they lack Oracle licensing knowledge. This forces them to renew the agreement or purchase additional Oracle software licenses.

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Unlimited agreements are very restrictive on merger & acquisitions. Review the licensing terms carefully before agreeing.

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If a company does not deploy software during the term, then they will not realize the true value of the agreement.

What is good with Oracle USA?

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Oracle Software Unlimited

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Virtualization

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Large growth Oracle SW

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Large growth Oracle SW

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How much does an Unlimited license cost?

ULA agreements pricing ranges from 1 MUSD to +50M. How much you end up paying depends on how many Oracle products you include, the length of the contract and negotiation specifics, such as competitive alternative. There is no price list for Oracle unlimited license agreements

ULA –
Limitations:

  • Only unlimited for certain products – Unlimited agreement is only limited to the products that you have included in the agreement.
  • Legal entity and territory limitations – The ULA contract have restrictions on which legal entities that can use and access the Oracle software as well as which geographical areas you can deploy servers running Oracle.
  • Oracle ULA to Cloud – Oracle have had an uneasy relationship with public cloud for years, and Oracle ULAs are restrictive in how many licenses you can gain from deploying in AWS or Azure.

What happens when the agreement ends?

  • You will need to notify Oracle if you intentions are to renew or certify the ULA. If you choose to renew the agreement, a new negotiation will determine the payment, term and which Oracle products are part of the agreement.
  • If you decide to certify the agreement, you will need to successfully complete the ULA certification process. This includes an Oracle audit at the end of the Oracle certification process.
  • The licenses that the you have deployed are at the end migrated into perpetual Oracle licenses matching the quantities that the company have deployed during the term.
  • It is important to remember that your technical support fees will not increase if you over-deploy in your Unlimited agreement.

What is the Certification process?

The ULA certification process is the name Oracle has given the process for leaving unlimited license agreement. This includes an Oracle license audit where you together with Oracle will need to count and calculate how many Oracle licenses deployed at the time the ULA ends. This is very similar to how an Oracle license audit works.

Challenges during ULA certification process

  1. The first challenge is how to certify Oracle deployments in public cloud such as AWS and Azure. Oracle has designated these two cloud platforms as authorized cloud environments. Both AWS and Azure been given special rules for how to count Oracle licenses. Remember that there is restrictions your contract, what and how much you can count for any deployments in the cloud.
  2. The second challenge is how to calculate Oracle licensing in virtual deployments. Oracle licensing policies are vague on how to license Oracle on VMware. Oracle deployed on VMware outside of an ULA can be risky, however in an Unlimited agreement – Oracle on VMware is a positive as it will help you maximize your software licenses.
    Here you need to fully understand the Oracle partitioning policy document do apply the correct licensing counts.
  3. The third challenge with the ULA is to identify what products you have installed and or are using, Oracle LMS scripts can detect both active and historical usage. Every Oracle customer have deployed products that is not part of their Oracle. If Oracle discovers this, they will probably you an renewal, which is often against your own preferences.

Oracle ULA to cloud

Moving from an ULA to a public cloud environment presents many opportunities, but many customers aren’t sure how to proceed. Oracle licensing in a public cloud environment is often misunderstood and surrounded by confusing non-contractual policies. While moving to the cloud is an excellent opportunity to improve your deployments, a wrong understanding of Oracle licensing can result in missed opportunities or unexpected compliance risks. To avoid these pitfalls, learn more about the ULA and public cloud environments. If you’re thinking about migrating from an Oracle estate to a cloud environment, you should understand how a ULA works. Oracle’s ULA is a powerful licensing tool, but it’s also an important part of your overall IT budget. The ULA must be evaluated before you can move forward. If you’re considering a ULA transition, consider the following three considerations. First, determine what your current ULA’s financial value is.

When should you start planning for the ULA exit?

The earlier you begin to review your Oracle licensing deployments and ULA agreement terms, the more success you will have. Best practices are to begin the Oracle licensing assessment minimum 6 months before the ULA end. If you speak to Gartner or any other research firm, they will all advise that you need to perform an independent licensing assessment to enable an exit of the Oracle unlimited license agreement.

ULA renewal

One of the benefits of entering the ULA, is that it gives you an opportunity to renegotiate all your existing Oracle licensing agreements. Many companies improve their terms as they usually have a legacy of old contracts that are outdated. When you renew the agreement , you are given another opportunity to amend contractual risk and improve your terms with Oracle.

If you renew your Unlimited agreement, you should take the same approach and perform a contract analysis of your agreement. What can be improved and was there any contractual risk in your first Oracle contract?

Renewal Options – What can be negotiated?

You can negotiate to add additional Oracle software products.
You can remove software products you do not need.
You can renegotiate all your contract terms.

Questions to ask yourself before you negotiate with Oracle

  • Company M&A – Have we added any legal entities during your ULA? Make sure that you include majority owned subsidiaries, joint ventures etc.
  • Use of Public Cloud – Oracle has changed its contractual language regarding cloud deployments. It’s crucial that you evaluate which contract term fits your cloud company strategy.
  • Technical support terms – Is there a cap on how much Oracle may increase your support fees?
  • Extended support fees – Once your agreement ends and if you run older versions of Oracle software, you may be facing a 10-20% increase in support cost. Request a extended support waiver from Oracle.
  • Certification – It’s arguably the most important clause in your contract. It specifies how the exit process will work. You want to negotiate this clause as much as possible to maximize your leverage for the future certification, including extending the number of days until you need to report to Oracle, if you need to run scripts and what documentation you need to share with Oracle.

 

Consider all ULA renewal options available to you

01

You can renew your agreement as it is – with the same products, same terms.

02

You can renew your agreement and remove/add products with same terms.

03

You can renew your agreement and add/remove with new terms.

04

You can sign an Oracle PULA instead of an Oracle ULA. Just make sure that you include a self-exit clause.

05

You can sign a shorter agreement extension such as 6-12 months

Oracle negotiation

First time you enter an Unlimited license agreement you will need to carefully review which Oracle products you want to include in the agreement. The trade-off you do with Oracle when you enter into an ULA, is that you give away the right to partially terminate support and licenses for any products part of the Ocontract. All existing support contracts will be migrated into a new support contract (CSI) for the Oracle Unlimited License Agreement, which will make it almost impossible to reduce licenses and support. Oracle has made this possible in their technical support policies. We have written about this in 3 support policies you must know about.

Advice for your first negotiation

  • Don’t include all Oracle products into the ULA. Choose products you can recycle for other purposes, such as Oracle database which is easier to reuse – let’s say Oracle WebCenter products. We often come across companies that have put too many Oracle products into their contract, without knowing that it is not possible to reduce those licenses and support once they are part of the ULA support contract.
  • Oracle often asks for projected deployment costs to calculate an ULA price for you. Make sure that any estimates you give are very conservative. By doing so the price for the agreement will be much lower.
  • All your existing licensing agreements will be renegotiated and replaced. This is both an opportunity to improve all your licensing terms but also to make mistakes. Make sure you have the proper Oracle contracts expertise making sure you maximize this opportunity.

Advice for your ULA renewal negotiation

  • You can remove and add products in your agreement. This open is often overlooked by Oracle customers, who often renew “as-is”.
  • You should review your Oracle licensing position before your ULA renewal. If you discover products, you have unknowingly used outside of your Unlimited license, those products should then be added to the renewal without alerting Oracle about the reason for adding them.
  • Review all contract terms – as this is a second chance to improve your terms and remove contractual risks. You have contract risks, these risks will be discovered by Oracle when you want to leave the agreement.

Negotiation – amending contract

  • You may want to add an additional product to your agreement while it’s active, this is fully possible. Remember to not share too much information with Oracle to keep ULA pricing low.
  • You may have identified a mistake in your agreement and want to correct it before the certification process begins. You can renegotiate the contract 6 months before the exit.
  • You may want to certify the agreement earlier for some reason. This is possible as you simply need to negotiate it with Oracle

Oracle licensing expert advice:

  • You must have Oracle licensing expertise either in-house or working with an independent Oracle licensing advisor to maintain Oracle license compliance.
  • 6-9 months before the agreement is expiring, it is important that you perform an Oracle license audit independently of Oracle to review your current deployments and understand the financial risk.
  • By reviewing the Oracle licensing, you will take the next steps, which is to remediate any financial risk and secondly maximize your agreement by deploying more ULA software before your agreement is certified.

If you still have questions or want advice, please contact us in the convenient way from the contacts page

Frequently asked questions on Unlimited License Agreements

Why are there 3 different Oracle Java licensing agreements?

One agreement is applied to older Oracle Java versions and patches and Java OTN is for Oracle Java 11 and to 17. At Java 17 Java No-fee license agreement applies, the third licensing agreement.

Do Oracle Java 8 license ?

greement is applied to older Oracle Java versions and patches and Java OTN is for Oracle Java 11 and to 17. At Java 17 Java No-fee lic.

Do Oracle Java 8 license ?

greement is applied to older Oracle Java versions and patches and Java OTN is for Oracle Java 11 and to 17. At Java 17 Java No-fee lic

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Expert advice on how to manage ULA renewals/exits

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Redress compliance are experts in Oracle License Management

Redress compliance are experts in Oracle License Management. Redress is recognized as the leading Oracle licensing experts providing Oracle license compliance, Oracle audit defense, Cloud transition and Oracle ULA services. Serving clients in 41 countries across The US, Europe, Africa, Middle-East, Japan and Brazil.

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