Oracle ULA

Oracle ULA

Oracle ULA – We have helped over 100 organizations manage their unlimited license agreements. What did we find? – That no organization has been compliant when we performed a licensing assessment. The most common reason why companies renew their Oracle ULA is that Oracle finds that they are non-compliant in the end. If you want to master the Unlimited license agreement model, read our guide

Exec summary

  • Oracle ULA agreements can be complex and require specialized expertise to navigate.
  • Negotiating an ULA contract for the first time requires strategic thinking about which products to include.
  • One common mistake companies make is over-deploying Oracle software or including non-ULA software.
  • The certification process, outlined in the agreement, should be reviewed and understood to minimize financial risk.
  • Support costs will not increase after exiting an ULA, but there may be additional costs for older versions of software or extended support.
  • Public cloud deployments can now be included in ULA agreements, but proper planning and management is still necessary to avoid financial risk.
  • Deploying Oracle on VMware is a recommended strategy for maximizing ULA usage and certification.
  • Oracle may resist reporting high numbers of processor licenses at the end of the ULA, but it is important to stand firm and declare all physical hosts in virtual environments.
  • it is important to use existing SAM tooling only for discovery of Oracle installations, not as a credible licensing report.
  • It is essential to have Oracle licensing expertise, either in-house or with an independent advisor, to maintain compliance and minimize financial risk during the ULA process.

What is an Oracle ULA ?

An Oracle ULA, or Oracle Unlimited License Agreement, is an enterprise licensing agreement offered by Oracle for its software products. The agreement allows organizations to purchase a subset of Oracle products for unlimited use during 1-5 years.

At the end of the contract term, the customer can renew or certify (exit), and the unlimited period will end. The end customer is then obligated contractually to report deployment quantities to Oracle. Those quantities will then be converted into perpetual licenses. The end customer then only pays annual maintenance fees going forward.

Explaining Oracle Unlimited License Agreements

How does an Oracle Unlimited license work?

How does an Oracle ULA work?

  • Understanding the terms of an unlimited license agreement: It is important to understand the terms and conditions of the contract before making a final decision. The agreement includes a one-time license fee that provides unlimited deployment rights for a subset of products for a specified period, typically 3 years but can range from 1-5 years. There are no reporting requirements until the agreement is expiring.
  • Renewal, Migration or Certification: Six months before the ULA expires, Oracle will ask if you want to renew, migrate to a PULA (Perpetual ULA) or certify the agreement. If you decide to certify, you need to report deployment numbers to Oracle, similar to an Oracle license audit.
  • Support costs: It is important to note that the support will not increase based on certification quantities, it will remain the same as during the agreement.
  • Compliance: The number one mistake companies make is deploying non-ULA software, which leads to non-compliance during the certification process and often results in costly renewal of the ULA instead of exit.

Oracle ULA Pros and Cons

ULA Pros

  • Oracle ULA offers a fixed cost option for purchasing licenses, making it cost-effective for organizations with significant usage of Oracle software and a list price of over 2M USD.
  • The flexibility to deploy on virtual environments, such as VMware, without worrying about license compliance.
  • The opportunity to improve licensing terms for Oracle software investments by migrating old agreements into a new ULA agreement.
  • Additional benefits for companies utilizing Oracle Cloud, including the ability to bring in existing licenses (BYOL) and the chance to receive a 33% return on support bills through the Oracle support rewards program.
Oracle ULA benefits

ULA Cons: 

  • The company will away the right to partially terminate licenses and connected support when entering the ULA. “Unbreakable contract”
  • 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.
  • Unlimited agreements are very restrictive on merger & acquisitions. Review the licensing terms carefully before agreeing.
  • If a company does not deploy software during the term, then they will not realize the true value of the agreement.
oracle csi ula

Understanding the terms of an Oracle ULA

Explanation of the key terms and clauses in an Oracle ULA

  • Customer Definition: List all entities that will access and use any Oracle ULA software, typically included in an appendix of the standard Oracle Ordering document for volume purchase. Requesting an “all majority-owned subsidiaries” definition if contracting with a parent company.
  • Territory: Defining where servers running Oracle ULA software can be physically deployed, with “worldwide usage” as the widest possible option to avoid non-compliance if deployment location changes.
  • ULA Certification Clause: Specifying the process for leaving the Oracle ULA agreement, including reporting deployment data to Oracle, cooperation and data sharing, and counting deployments in cloud environments like AWS or Azure.
  • Technical Support: Oracle technical support increases by 4% Year on Year; it is important to negotiate a cap on the increase for a maximum of 5 years.
  • Merger & Acquisitions: Restrictions on adding acquisitions or mergers of subsidiaries into the Oracle ULA, with the possibility of adding entities with a maximum of 10% of the employee base or revenue. Careful negotiation is needed to obtain the right model for the company and to request additional terms in the contract.

Different types of Oracle ULAs are available

  • An Oracle ULA (Unbreakable License Agreement) is a licensing agreement offered by Oracle Corporation for its software products. The agreement allows organizations to purchase a set number of licenses for a specific period, typically 3 to 5 years, at a discounted rate. It provides a cost-effective and predictable licensing model for organizations that use many Oracle software products.
  • An Oracle PULA (Perpetual) is a type of ULA that has no expiry date.
  • A Capped Oracle ULA is a type of Oracle ULA in which a cap is set on the number of licenses used during the agreement term. This means that an organization will not be able to use more licenses than the agreed-upon cap, even if they have purchased more licenses under the ULA. This is very similar to making a volume purchase of licenses.

How much does an Oracle ULA cost?

  1. Cost of an Unlimited license: A ULA agreement can range from 1M USD to 50M USD. The final price will depend on factors such as the number of Oracle products included, the length of the contract, and the outcome of negotiations, including the consideration of competitive alternatives.
  2. Pricing: It is important to note that Oracle does not provide a price list for unlimited license agreements.

What happens when the Oracle ULA ends?

  • Notification to Oracle: You must notify Oracle if you intend to renew or certify the ULA.
  • Renewal: If you choose to renew the agreement, the payment, term, and included Oracle products will be determined through new negotiation.
  • Certification: If you decide to certify the agreement, you must complete the ULA certification process, including an Oracle audit.
  • Migration of licenses: At the end of the agreement, the deployed licenses will be migrated into perpetual Oracle licenses based on the quantities deployed during the term.
  • Technical support fee: It’s important to note that technical support fees will not increase if you over-deploy in your Unlimited agreement.
what will happen when the ULA ends

What is the Oracle ULA certification process?

  • The ULA certification process leaves an unlimited license agreement, including an Oracle license audit, to count and calculate the number of Oracle licenses deployed at the end of the ULA, similar to an Oracle license audit.

  • Challenges in the Certification process:
  • Certifying Oracle deployments in public cloud platforms such as AWS and Azure, with special rules for counting Oracle licenses and restrictions in the contract.
  • Calculating Oracle licensing in virtual deployments, understanding Oracle partitioning policy, and applying the correct licensing counts.
  • Identifying all the products installed and used, Oracle LMS scripts can detect both active and historical usage. If Oracle discovers non-compliant usage, it can lead to an unwanted renewal
ula exit

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.
Oracle ULA Planning for License Compliance, Maximization and Cost reduction

Three Challenges for customers who wants to leave their Oracle ULA

  • 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.
  • 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.
  • 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 customers face problems in the following categories

  • Have deployed non ULA software, and that is discovered by Oracle in the audit.
  • Have deployed in a public cloud and you lack the necessary contractual rights.
  • Have restrictions in the Oracle agreement that you are not following.
  • Geographical restrictions, such as where can you physically deploy Oracle ULA software.
oracle ula problems

Oracle ULA to Cloud – A trap that can force you into a renewal

  • Oracle ULA agreements may not work well with public cloud deployments. Studying your Oracle ULA agreement to understand what rules apply to your company during certification for the public cloud is important. It is recommended to assume that you do not have the right to certify deployments in the public cloud unless otherwise stated in your contract.
  • Deployment rights during ULA: During the ULA, you have the right to deploy Oracle ULA software in AWS, Azure, Oracle Cloud, and other public cloud providers, but you need to pay attention to the territory deployment rights in your agreement.
  • ULA certification for the public cloud: The “gotcha” for Oracle ULA customers is during the Oracle ULA certification process, where it is necessary to determine if you have the right to “claim” licenses for any deployments in a public cloud. If you do not have the right to claim licenses in a public cloud, you may face financial risks when your ULA ends.
  • Financial Risk: Many Oracle customers have been forced to renew their Oracle ULA because they did not have licenses for public cloud deployments at the end of the ULA. For example, suppose you have an Oracle ULA that does not allow you to certify cloud deployments, and you have deployed 250 processor licenses of Oracle Database Enterprise Edition worth $11,875,000 in AWS or Azure. In that case, you will be required to purchase licenses for those environments the day your Oracle ULA ends.
ula to cloud

How to calculate Oracle ULA for deployments in the Public cloud

  • To calculate Oracle licenses for deployments in a public cloud, you must first understand the Oracle cloud licensing policy.
  • This typically involves calculating the number of vCPUs and determining the corresponding licenses needed.
  • However, it is important to accurately assess which database options or other products are in use and include them in your certification to Oracle.
  • Failure to do so can lead to non-compliance and penalties during an Oracle audit.

oracle ula to cloud solution

Oracle has changed its policy for ULA 2 Cloud

Later versions of Oracle ULA agreements have a contractual text allowing you to count deployments in public cloud platforms. However, this is an average number in the Oracle ULA over the last 365 days. It is important that if you deploy more Oracle ULA software in the last 3-6 months, you may be out of compliance with your ULA because you need to take into account the full 12 months.

ula to cloud

ULA problems and solutions

1. Problems from deploying Oracle software not included in your ULA contract

Compliance is a common problem with the ULA. In many cases it stems from deployment of products not included in the ULA. The deployments are discovered when the Oracle ULA customer is certifying their Oracle ULA.

Recommendation

Running Oracle LMS scripts and have an independent Oracle licensing expert review the results before you share data will Oracle will put you in a better position.

2. Oracle ULA problems from running software on servers in countries that are not included in your territory contract.    

Oracle ULA problem

It is not uncommon with limitation on where you physically are allowed to deploy your Oracle ULA software on servers. If you are running servers in Poland and only have US territory rights, you need to buy those licenses running on the Polish servers.

Recommendation

Ask for worldwide territory rights when you enter the Oracle ULA.

3. Oracle ULA problems from subsidiaries that are not included in your customer definition

oracle ula agreement

All Oracle ULAs comes with a list of subsidiaries that are included in your customer definition. If you are not in the list, you can’t use Oracle ULA software. This list will change over time when new subsidiaries are acquired or you might have missed to include all legal entities when you entered the Oracle ULA.

Recommendation

Make sure to negotiate the terms and condition and the right to add to the list of subsidiaries during the Oracle ULA agreement lifecycle.

4. Problems from the Oracle audit in the end

Your Oracle ULA will end in an Oracle license audit. Oracle will not use those words, but that is really what it is. Oracle will use the same people (auditors), same tools (Oracle license audit scripts) and Oracle license audit processes. They do this because they often find deployments of non-ULA software, which often forces a costly ULA renewal.

Recommendation

Do your own internal audit as part of the certification planning, running Oracle audit scripts and have an independent Oracle license expert analyze the results before sharing the data with Oracle.

5. Problems from including products you do not use 

Only chose the products you need in the ULA. If you add products you don’t use, you will lock yourself in without the possibility to make any changes to the cost of support on those products.

Recommendation

Perform an internal Oracle licensing review without involving Oracle auditors.

6. Oracle ULA problems from mergers and acquisitions

Oracle ULAs are often bought by large companies that constantly undergoes changes with new companies being bought or leaving the company group. However, if you during the ULA make any changes to who is using the ULA software, then it needs to be listed in the ULA contract. This is often not done or you forgot to negotiate the right terms for subsidiaries entering the company group.

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.

oracle ula review

Oracle ULA Renewal

Renewing your ULA can be beneficial as it allows you to renegotiate your existing Oracle licensing agreements. Many companies use this opportunity to update their old contracts and reduce contractual risk.

When renewing your ULA, it’s important to thoroughly analyze your current agreement. Consider what can be improved and identify any potential risks in your original contract.

Oracle ULA Renewal Options

  • When renewing your Unlimited License Agreement (ULA), you can negotiate to add additional Oracle software products to your agreement, which can give you access to new features and functionalities.
  • You can also remove software products you no longer need or use from your ULA, which can help you save costs and reduce your Oracle estate.
  • You can also renegotiate all your contract terms, such as the length of the agreement, the number of licenses, and the cost of support. This can help you align your ULA with your current business needs and budget. Additionally, you can negotiate to improve your terms with Oracle and reduce any contractual risks that may have been present in your first Oracle contract.

Oracle ULA Renewal Scenarios

  1. Renew your existing ULA with no changes to the products or terms. This is the most straightforward option.
  2. Renew your ULA and make changes to the products included. This allows you to add new products that you may have recently adopted or remove products that are no longer in use.
  3. Renew your ULA and make changes to the terms. This can include changes to the length of the agreement, the pricing structure, or other important details.
  4. Consider an Oracle PULA (Perpetual ULA) instead of an Oracle ULA. This option allows you to pay for what you use, but make sure to include a self-exit clause to ensure flexibility.
  5. Sign a shorter extension to your existing ULA, such as 6-12 months. This allows you to review your Oracle usage and make changes if needed before committing to a longer-term agreement.

ULA Renewal Negotiation Advice

Consider the following questions before negotiating with Oracle:

  • Has your company undergone any mergers and acquisitions during the ULA? Make sure to include any majority-owned subsidiaries and joint ventures.
  • How does your company plan to use the public cloud? Evaluate the contract terms related to cloud deployments, as Oracle’s language may have changed.
  • Are there any caps on how much Oracle can increase your technical support fees?
  • Will you be facing a significant increase in extended support fees for older versions of Oracle software? Request a waiver for extended support fees from Oracle.
  • The certification clause is arguably the most important in your contract. It specifies the process for exiting the ULA. Consider negotiating the number of days until reporting to Oracle, the use of scripts, and the documentation to be shared with Oracle to maximize leverage during the certification process.

Oracle ULA negotiation

Oracle ULA contract terms

Customer Definition

Why:

You need to list all entities that are going to access and use any Oracle ULA software.
This is done in the appendix. In a standard Oracle Ordering document for volume purchase, you should request “all majority owned subsidiaries” definition if you are contracting with parent company.

Territory

Why:

Territory defines where you physically can deploy the servers running Oracle ULA software. You should make this as wide as possible “worldwide usage”. To avoid being out of compliant if you change location of deployment for Oracle ULA software

ULA Certification clause

Why:

It specifies how you leave the Oracle ULA agreement, such as
“How many days after the Oracle ULA expire do you need report the deployment data to Oracle?”
“How much do you need to co-operate with Oracle and what data should you share? Will you run Oracle LMS scripts?
“How can you count deployments of Oracle ULA in AWS or Azure? “

Technical support

Why:

Oracle technical support will increase by 4% Year on Year. You should focus on putting a cap on the increase for as much as up to 5 years

Merger & Acquisitions

Why:

Oracle ULA customers have a restriction on adding acquisitions or mergers of subsidiaries into the Oracle ULA. You may allow to add entities with maximum 10% of your employee base or 10% of your revenue. If the entity that you are merging with is larger than that, you may not add them to the Oracle ULA.You should carefully negotiate the right model for your company as there many more contract terms you should request in your negotiation.

Oracle ULA negotiation

Points to consider when entering an Oracle ULA

  1. Carefully review which Oracle products to include in the agreement.
  2. Understand the trade-off of giving up the right to partially terminate support and licenses for any products included in the contract
  3. Be aware that all existing support contracts will be migrated into a new support contract (CSI) for the Oracle Unlimited License Agreement, making it difficult to reduce licenses and support.

Oracle ULA Pricing

  1. Pricing ranges from 1 MUSD to 50M, depending on the number of Oracle products included, the length of the contract, and negotiation specifics, such as competitive alternatives.
  2. Oracle typically starts by asking for projected deployment numbers for the next three years, then applies a discount to the projected estimates.
  3. To get a low price, provide Oracle with very conservative numbers.
  4. Experience in Oracle contracts and negotiation plays an important role in determining the final price.
Oracle ULA pricing

Advice for your first Oracle ULA Negotiation

When negotiating your first Oracle ULA, you must be strategic about which Oracle products you choose to include in the agreement. Here are some tips to keep in mind:

  • Be selective about which products you include. Consider which products you can easily recycle for other purposes, such as the Oracle database.
  • Be aware that once a product is included in the ULA support contract, it can be difficult to reduce the number of licenses and support for that product.
  • Remember that all existing licensing agreements will be renegotiated and replaced as part of the ULA. This is a great opportunity to improve your terms, but also a chance to make mistakes.
  • Make sure you have the proper expertise in Oracle contracts and negotiations to help you maximize the opportunity and avoid pitfalls.

oarcle ula negotiation

ULA Renewal Negotiation Guide

  • Review your existing Oracle products: Before renewing your ULA, take the time to review the products you currently have included in the agreement. Consider which products you no longer need and remove them from the agreement, and which products you may have unknowingly used outside of your ULA and add them to the renewal without alerting Oracle.
  • Review your licensing position: Before renewing, take a look at your overall licensing position to make sure you are not at risk of non-compliance. An independent Oracle licensing expert can help you with this.
  • Review all contract terms: When renewing your ULA, take the opportunity to review and renegotiate all contract terms. This is a great chance to improve your terms and remove any contractual risks that may have been present in your previous agreement.
  • Be aware of the risks: Be mindful of any potential risks associated with the ULA, such as those that may arise from mergers and acquisitions, and ensure that you have the right terms in place to address them

Tips for amending your ULA contract

  • Consider adding additional products to your agreement while it is still active. Remember that sharing too much information with Oracle can increase ULA pricing.
  • If you discover any mistakes in your agreement, you can renegotiate it before the certification process begins. Typically, you can do this six months before the exit.
  • If you need to certify the agreement earlier than planned, you can negotiate this with Oracle. Be sure to have a clear reason for doing so

Oracle licensing expert advice:

  • Tips for Maintaining Oracle License Compliance in an Oracle ULA
  • Have in-house or external Oracle licensing expertise to guide you through the process
  • 6-9 months before the agreement expires, conduct an independent Oracle license audit to review current deployments and assess financial risks
  • Take steps to remediate any identified financial risks and maximize your agreement by deploying more ULA software before the certification.
ula strategy

Frequently asked questions on Unlimited License Agreements