
Oracle ULA Negotiations FAQs
Q51: What are some best practices when negotiating a new Oracle ULA?
A: Preparation is critical: Before engaging Oracle, assess your current and future Oracle usage needs in detail. Know what you actually need unlimited rights for (which products and why) and what you don’t.
- Scope Definition: Clearly define what products you want in the ULA—include those that you expect to grow significantly or need flexibility for, and exclude those you won’t heavily use.
- Customer Definition and Territory: Ensure all relevant entities (subsidiaries, etc.) are included and get a worldwide usage clause if you operate globally. This prevents compliance headaches later.
- Keep the Future in Mind: Negotiate terms with an eye on exit. For instance, make sure the certification process is clearly outlined and not punitive. If possible, negotiate an extended certification window or at least language in which Oracle will act reasonably.
- Support Cap: Try negotiating a cap on annual support fee increases (Oracle standard is 8%, but perhaps you can get 0% for a couple of years or cap at 3%). Also, see if Oracle will agree not to increase support based on some event—Oracle usually doesn’t reprice support on certification, but ensure the contract says support stays at the initially agreed amount.
- M&A Clauses: If you anticipate acquisitions, negotiate flexible terms – e.g., allow inclusion of acquired companies up to a certain size with no fees. If you’re worried about being acquired, maybe negotiate that the licenses you’d get at termination will be based on something reasonable (though Oracle may not budge here, as ULA ends on acquisition).
- Cloud Rights: If cloud deployment is in your plan, include rights to deploy in major public clouds (AWS, Azure, etc.). Oracle has started being more amenable to that if asked upfront.
- Duration: Negotiate a term length that matches your needs—don’t be pushed into a longer term than necessary. The standard is 3 years, but if you only have a 2-year project, you could attempt a shorter term (Oracle might charge a premium). Conversely, if you want more time to execute big plans, push for 4 or 5 years if needed.
- Price and Discounts: Oracle’s first price is typically high. You should counter with data – show your projected deployments and perhaps how buying licenses outside the ULA could be cheaper to justify a lower price. Also, consider bundling: sometimes Oracle might give a better deal if you include other products or cloud credits, but only do that if those add real value to you.
- Document Everything: Ensure all negotiated points – even verbal promises like “we’ll allow that DR site without needing licenses” – are written into the contract or an email from Oracle that is referenced. No ambiguity: Oracle’s contracts are notorious for small print, so push for clear wording on important clauses.
- Expert Help: Use experienced negotiators or consultants if you can; Oracle’s reps always do ULAs, so having someone on your side who knows the tricks helps even the field. Don’t rush: Use timing to your advantage – for instance, engage in negotiations near Oracle’s quarter-end when they may be more flexible on price.
Summarily, best practices revolve around defining scope wisely, securing flexible terms for changes, containing costs (both upfront and long-term), and ensuring clarity and fairness in the contract.
Read Oracle ULA Certification FAQs
Q52: Which contract clauses are most important to scrutinize in a ULA?
A: Several clauses deserve special attention:
- Products Covered: Ensure the exact product names and options/packs are correctly listed. A small omission here could leave something out of scope. Verify metrics too (e.g., Processor vs Named User Plus) are as you expect.
- Customer Definition: This defines which legal entities can use the ULA. Ensure all your current and foreseeable subsidiaries are included (commonly phrased as “Your Company and all majority-owned affiliates”). If you have JVs or need a broader definition, negotiate it. This clause is critical for compliance if your organizational structure changes.
- Territory: Ideally, “worldwide.” If Oracle tries to limit it (say to a region), push back because businesses are dynamic globally. A limited territory could mean it’s not covered if you deploy in a new country – a nasty surprise.
- Term and Certification: The clause about certification should clearly state the timeline and requirements. Make sure it doesn’t have any tricky language. Some ULAs might require you to provide additional documentation or allow Oracle audit rights at certification – know this upfront. Confirm that upon certification, you get perpetual licenses with no additional fees (it usually says that, but just be sure).
- Mergers & Acquisitions: Look for wording like “ULA will terminate upon a change of control” (common) and clauses about acquisitions. If it says new acquisitions are excluded, see if there’s a threshold (often 10% of your size). If not there, maybe it’s hidden elsewhere or assumed not allowed. If you need a custom clause (e.g., automatically include acquisitions under a certain size), get it in writing.
- Divestiture Clause: If you might divest parts of your company, see if the contract addresses that (like giving a grace period to the spun-off entity to acquire licenses). If nothing is said, that entity instantly loses rights to separation, which could be an issue.
- Technical Support Terms: Look for anything about support fee increases. Oracle typically references their support policies (with up to 4% annual increase). If there’s any non-standard potential increase, question it. Sometimes ULAs have a clause that if you deploy beyond a certain point, support will be recalculated – usually not, but check.
- Excluded Use or Environments: Some ULAs include exclusions like “not for use in the Oracle Cloud” (ironically) or restrictions on hosting for third parties. If you plan to use them in such ways, negotiate them out. Also, check if running on VMware or certain cloud platforms is allowed or if you need notification.
- Audit/Compliance: Most ULA orders don’t explicitly mention audits (Oracle’s general license terms cover it). But see if the ULA adds any audit-related language. Some might say Oracle reserves the right to audit during the term for verification – if so, try to soften that.
- Renewal Option: Check if the contract has any automatic renewal or notice period to inform Oracle if it is not renewing. Some ULAs might require you to give a notice of intent to certify, or they assume a renewal discussion (though ILS is not usually legally binding). Ensure there’s no auto-extend clause (rare in ULAs, but be safe).
- Usage cap? By definition, a ULA is unlimited, but if there’s any mention of “maximum deployment” or such, that’s effectively a cap – clarify or remove it.
Any unusual obligation: Occasionally, Oracle might tie in something like requiring you to consider Oracle Cloud at renewal or offering cloud credits as part of the deal. Fine, but ensure you’re not obligated to do something not desired.
In essence, scrutinize anything that limits the who, where, what, or how of your usage and anything that affects what happens at ULA end or costs. Those are the clauses that determine the real flexibility and cost of the ULA.
Q53: How can we ensure the ULA covers all our needed products and entities?
A: Due diligence and explicit listing. Make a checklist of all Oracle products you use or plan to use heavily during the term. Cross-reference that with Oracle’s pricelist names to get exact product names (sometimes similar names can cause confusion, e.g., “Oracle Database Enterprise Edition” vs. “Oracle Standard Edition”—ensure the right one is listed).
When negotiating, explicitly include every product you need unlimited rights for, even if it’s a small component. It’s safer to include it upfront than try to add it later. For future needs, if you have concrete plans to use a certain Oracle product that you aren’t using now, include it as well (e.g., you plan to implement Oracle Advanced Security next year – get it in the ULA now).
For entities:
- Work with your legal/finance team to list all subsidiaries, affiliates, etc.
- The contract might not list them by name (often, it uses a blanket definition like majority-owned subsidiaries), but verify that the definition covers all.
- If you have affiliates less than 50% owned but still need access, you might negotiate specific inclusion for those by name.
- Consider that if you foresee acquiring a specific company or creating a new subsidiary in a region.
- Sometimes, language like “and any entity acquired or established during the term that is majority-owned by you” can cover future subsidiaries, which is good.
Negotiate worldwide usage: Many Oracle agreements are inherently worldwide, but ensure the ULA doesn’t restrict to, say, the Americas only. If it does, get it changed. Worldwide coverage ensures that if your company expands to new countries, you’re covered, and it also helps with cloud deployment.
Also, ensure the metric is appropriate:
- If you include Oracle Database, you likely want unlimited in Processor terms, not Named User (unless your use case is user-based).
- Confirm that the metrics listed align with unlimited usage (Oracle usually sets it to Processor for ULAs for infrastructure products).
A thorough upfront analysis of what’s needed will drive the contract’s content. Don’t assume “they probably include that option if they include the main product”—often, they do not. Spell it out.
For example, including “Oracle Database Enterprise Edition” does not automatically include options like Partitioning or RAC – you’d list those separately if you want them unlimited.
So, ensure all needed components are enumerated. If Oracle presents a draft list, double-check it against your needs and ask for additions or clarifications. Once signed, what’s not in there is not covered.
Q54: How should we handle the support costs when negotiating a ULA?
A: Support costs are a significant part of ULA economics. Oracle will typically calculate your initial annual support as 22% of the net license fee of the ULA.
- Negotiate the license fee down, and you inherently lower the support.
- Negotiate the annual increase cap on support – Oracle’s default is up to 8% per year, but some customers have managed to lock it at 0% for the term or a lower percentage.
- If Oracle won’t budge on that, at least you know how to budget for an 8% yearly increase.
Another angle: If you’re consolidating existing support contracts into the ULA (say you already pay Oracle support on some licenses, and those licenses will be part of the ULA), make sure Oracle gives you credit or doesn’t double-charge.
- Typically, Oracle will roll those existing support streams into the ULA so you can continue paying them.
- Try to avoid any “uplift” on those – you don’t want to pay more support for the same licenses just because they’re now in a ULA.
Additional considerations:
- Try to freeze support costs for a period.
- Ensure the contract clearly states that support will remain at the ULA’s price (so if you massively deploy and certify a huge number, support stays the same).
- Lock in support terms to the extent possible: base amount and acceptable growth.
- Drop unused products from the ULA because each product included carries support costs.
If there’s a product you don’t need unlimited but Oracle bundled it, removing it will shave support and reduce cost.
Q55: Can we include anticipated future Oracle products in the ULA, even if we don’t use them today?
A: Yes, and it’s often wise to do so if you have a reasonable expectation of needing them.
- Negotiating them upfront can be much cheaper and smoother than adding them mid-term.
- If you think you might implement Oracle WebCenter or a specific Oracle option in year 2, it is better to include it now.
- Oracle will likely adjust the price slightly for the added product, but if it’s part of the unlimited deal, you won’t have to worry about licensing it separately later.
However, be cautious:
- Only include products you plan to deploy significantly – each added product inflates costs.
- Outline your IT roadmap for the ULA term—put any Oracle technology on that roadmap in the ULA.
- If Oracle is bundling a suite, check if that already covers what you need.
Also, consider Oracle’s product evolution –
- If Oracle is about to release a new version or a replacement product, try to ensure the ULA wording covers it (e.g., include wording like “and successor products or versions”).
- Oracle usually ties it to specific program names, so a new product won’t be automatically covered if it is separate.
If you suspect you’ll need new Oracle tech that doesn’t exist yet, you can’t include what you don’t know. But you can plan for flexibility:
- Some negotiate a clause like an option to add a product mid-term at a predetermined price – not common, but possible.
For entities, similarly, if you anticipate expanding to new subsidiaries or regions, cover those in customer definition.
Summing up: Yes, front-load likely future needs into the ULA’s scope to avoid costly surprises. It’s easier to decide not to use an included product than to scramble to license one that wasn’t included.
Just avoid loading it with completely unnecessary products that have no foreseeable use – that only drives up cost and support.
Q56: How can we negotiate flexibility for mergers and acquisitions in the ULA?
A: M&A clauses are tricky because Oracle sees acquisitions as a revenue opportunity. Still, you can negotiate some flexibility.
One approach is to include a threshold-based inclusion:
- Any acquired company under a certain size (often defined as a percentage of your company’s size in revenue or employees) can be absorbed into the ULA without additional fees.
- A common threshold is 10%, but try to get that in writing.
Another key point:
- If an acquired company has existing Oracle licenses, Oracle’s standard practice is that you must “roll in” those licenses (which means adding their support costs to your stream).
- You could negotiate how that is handled – maybe capping the support increase or allowing you to not roll in certain shelfware.
If you are in an industry prone to acquisitions, emphasize to Oracle that flexibility is a make-or-break issue.
Possible custom clauses:
- Oracle may agree that the ULA will cover the acquired entity without additional license fees for up to X acquisitions during the term, each not exceeding Y% of your company’s size.
- Oracle and the customer will mutually agree on any support fee adjustments in good faith.
For being acquired (if your company might be a target):
- Oracle will likely not allow the ULA to transfer (usually terminating it).
- However, you could negotiate what happens to the licenses if that occurs – at least ensure you get to certify at that point.
- You might negotiate that in case of acquisition, you can accelerate certification and maybe include some forecasted growth up to the end of the term (Oracle rarely concedes this, but it’s worth trying).
For divestitures:
- Negotiate a grace period for divested entities to use the software and/or receive a subset of licenses.
- A six-month transition period is often mentioned.
- Without this, they have no rights the day they leave your corporate structure.
These must be explicitly stated in the ordering document or an addendum.
The key takeaway: Raise these scenarios during negotiation, and don’t accept a boilerplate contract that could restrict your business flexibility.
Q57: What negotiation leverage do we have? How can alternatives or timing help us?
A: Your leverage comes from Oracle’s desire to close the deal and meet their quota and the credible possibility that you might choose not to do a ULA.
Key levers in negotiation:
- Timing leverage:
- Oracle’s fiscal year ends May 31.
- Oracle is more flexible at the end-of-quarter months (Feb, May, Aug, Nov) and especially at year-end (May).
- If you start negotiations in Q3,aiming to sign in Q4, Oracle’s sales team will be highly motivated to close the deal.
- Alternative options leverage:
- Always evaluate and, if possible, demonstrate alternatives to Oracle.
- Example: Buying perpetual licenses instead of a ULA or exploring open-source options.
- If Oracle senses that you have other viable options, they’ll be more willing to negotiate.
- Cloud consideration leverage:
- Mention that you may shift workloads to Oracle Cloud, which could impact their license revenue.
- This could encourage Oracle to offer better pricing to keep you on-premise.
- Relationship leverage:
- If you’ve been a loyal Oracle customer, highlight how much you’ve spent over the years and demand better pricing in return.
- Willingness to walk away:
- If Oracle’s proposal isn’t acceptable, pause the negotiations.
- Often, Oracle will come back with a better offer rather than lose the deal entirely.
The bottom line: Use timing pressure, show you have alternatives, and be ready to delay or walk away if needed. That gives you real power in negotiations.
Q58: Is involving a third-party consultant or lawyer in ULA negotiations advisable?
A: Yes, in many cases, it’s highly advisable.
- Oracle ULA contracts are complex and heavily favor Oracle if not carefully negotiated.
- A third-party licensing consultant knows common pitfalls, market pricing, and negotiation strategies.
- They can help you identify areas where Oracle is flexible and what concessions to request.
Why third-party help matters:
- They provide an independent assessment of whether Oracle’s pricing is fair.
- They often have examples of better contract clauses from past clients that you can try to include.
- They can push back on Oracle’s claims, ensuring you don’t get trapped by vague contract language.
Lawyers specializing in software licensing:
- They help tighten contract definitions and ensure no ambiguous terms favor Oracle.
- Oracle reps negotiate ULAs daily, while you might do this only once in a career.
- Experts help level the playing field.
The bottom line: Hiring a consultant or legal expert may cost money upfront, but the savings and risk mitigation often far outweigh the cost.
Q59: What are common pitfalls or mistakes during ULA negotiations to avoid?
A: Common mistakes that cost companies millions:
- Over-focusing on price alone:
- A low upfront price isn’t a good deal if the terms are restrictive.
- Balance cost with contract flexibility.
- Including too many products:
- Adding unnecessary products inflates the cost and increases long-term support fees.
- Not verifying contract language:
- Ensure exact product names, licensing metrics, and terms are correct.
- Accepting vague language or verbal assurances:
- If it’s not written in the contract, it doesn’t exist.
- Ignoring support cost implications:
- A high license discount means nothing if support costs keep rising at 4% annually.
- Not planning for exit at entry:
- If you don’t define certification terms upfront, Oracle may force you into a renewal.
- Last-minute rushing:
- Start negotiations early to avoid signing a bad deal under pressure.
Avoiding these mistakes ensures you get the best possible ULA.
Q60: How might Oracle use the threat of audits or other tactics during negotiation, and how should we respond?
A: Oracle sometimes hints at audits to pressure customers into signing a ULA.
- If Oracle mentions an audit, respond that you are confident in your compliance and will handle compliance separately.
- Don’t let the fear of an audit rush you into a bad deal.
Other pressure tactics and how to respond:
- “This offer is only valid if you sign this quarter.” → Recognize this is a sales tactic.
- “Other customers pay this much.” → Push back and demand data.
- “We’ll work closely with you if you sign.” → Ensure any promises are written in the contract.
Key takeaway: Stay calm, push back, and don’t negotiate under duress.
Q61: What is a “stall clause” or other hidden clause we should watch out for?
A: A “stall clause” is any hidden term that delays or complicates your ULA exit.
- Examples:
- If you fail to certify in time, the ULA auto-renews.
- A mandatory Oracle Cloud purchase clause at ULA termination.
Key strategy: Read every clause carefully and remove anything that creates future obligations.
Q62: If we decide a ULA isn’t the right choice, what alternatives can we consider and use as leverage?
A: Alternatives include:
- Perpetual licenses.
- Enterprise License Agreement (ELA).
- Third-party support to cut Oracle costs.
Using these alternatives in negotiation signals that Oracle must compete for your business.