Opinion

How to avoid getting caught out by Oracle Unlimited Licence Agreements

Oracle is one of the most popular databases for business-critical applications among large enterprises, and this popularity is growing.

Recently, the company announced that its new software licence revenue has jumped by 25% since last year. However, the complexity and challenge of Oracle licence management for enterprises is well documented too.

In addition to Oracle's primary software licensing models - named user plus and processor-based - Oracle offers the Unlimited Licence Agreement (ULA) for its larger customers. It is aimed to be a convenient "all you can eat" option where enterprises pay a single up-front fee to gain an unlimited licence for a pre-identified list of Oracle products for a limited term, which is typically three years.

At the end of this period, there is no true-up, but enterprises must document the deployment of all products obtained under the agreement, as these quantities determine the number of licences they get at the end of the ULA term.

On expiry of the unlimited licence agreement, enterprises must provide a signed document to Oracle that describes how many products have been installed along with pertinent data used to licence the Oracle software titles, such as number of processors and usage type.

Oracle Unlimited Licence Agreement risks

While the unlimited licence agreement model sounds simple, it carries with it inherent risks from a software licencing perspective.

A ULA is most attractive when enterprises expect to see significant growth in their usage of Oracle products over the term of the contract, where they will typically get an attractive discount.

The first risk is that enterprises may not, in fact, realise the expected growth in usage and could therefore over-pay for the licences they actually use during the term.

The second area of risk occurs after the agreement expires, when usage may decline from previous levels - enterprises are still required to pay the same amount of maintenance that was in effect during the unlimited licence agreement.

Best practice requires that enterprises have the processes and tools in place to accurately assess their Oracle deployment and usage. This will enable them to provide the necessary data to receive the correct number of Oracle licences at the end of the ULA.

To ensure Oracle licence optimisation, automation of the software asset management processes is the only fail-proof way. Licence optimisation addresses the complexities to allow organisations to avoid over-spend and maintain continuous compliance.

Patrick Gunn is EMEA sales director, Flexera Software, a company which helps businesses to strategically manage application usage


Complexities of Oracle licence optimisation

Oracle licence optimisation is very complex for the following reasons:

  • There is no repository listing all Oracle product installations. It's up to enterprises to have processes and tools in place to track their Oracle deployments and usage.
  • Some of the Oracle installations may have been done by developers, database administrators or others and may be found outside the datacenter. Hence, it's necessary to perform discovery and inventory of Oracle instances across the network.
  • Processor-based licences require inventory of the underlying hardware platform characteristics. This can be complicated by the use of server virtualisation technologies where the hypervisor may hide the hardware details. Oracle Database products also require a detailed inventory of options in use.
  • Because licencing models have evolved overtime, different licences are based on different metrics for same products. Assigning the right licence types to installations based on usage is important as this minimises the number of licences consumed. This again is a difficult exercise.
  • Terminating licences can carry a high price. One of the benefits of unlimited licence agreements is that it helps to consolidate all maintenance associated with all products for purchases made before or during the agreement tenure into one single yearly fee. But while it offers the convenience of simplifying the number of maintenance transactions, it can lead to high penalties should an enterprise terminate a sub-set of its licences or modify its support level. This is because Oracle re-pricing applies, which means that all previous discounts can be lost.

 

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This was first published in October 2010

 

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