Hi, it’s Keith and I just wanted to share a question I had from a customer.
The question was, “How do I cancel an Oracle ULA?”
When I first heard that I thought, wow, that sounds a bit serious. I won’t share the exact details but the essence of the conversation was this: Some time ago the client purchased an Unlimited Licence Agreement (ULA). Business was doing well and they were focussed on an IT transformation programme. It was not clear what they would need in terms of Oracle software over the coming months but wanted the flexibility to architect without worrying about deployment of the standard products. All good so far. So after the 3 years the client made their declaration and certified the deployed licences as perpetual licences. They were happy as they had deployed more than than they had ‘bought’ and so it was seen as a successful contract. Move forward now a few more years. People change, move on and forget. Now the situation is that the client sees that they have an excess of licences. Or more specifically they are paying support for licences not being used and sitting in a pool. The fact they had a good deal and one could argue got significant value in the past is but a distant memory. Business is business and the procurement folks want to reduce OPEX – and rightly so.
What is an ULA? A ULA or Unlimited Licence Agreement gives the end user the right to unlimited deployment of a number of pre-agreed products over a specified time period. In reality some products can be capped, others unlimited and sometimes just a fixed number of products can be on the same agreement. An example might be that the end user is given unlimited deployment rights for say the Database and a number of options. Then a cap on say Goldengate, Real Application Testing and perhaps Real Application Clusters. They maybe have a small fixed number of licences for other products.
There are a couple of key points to note here. Firstly, you are given the right to deploy during this time period. At the end of the defined period (usually three years although we are seeing a lot of 12 month extensions) you must declare what you have deployed. Assuming Oracle agrees with your deployment metrics, (and they can challenge you on this so be prepared, manage the ULA from the start.) the licences will be transferred to you as the owner. Support is fixed at the start of the agreement and not calculated at the end of the period, based on what you deploy. This is usually a good thing as you agree in basically buy a number of processors say 100 and pay support on 100 at the discounted rate. If you deploy 300 your support bill remains at the support level for 100. You win and have a good deal. The catch is, that when an ULA is agreed all existing licenses are terminated as they are rolled into the new ULA. The existing support however, is added to the ULA. So for all products on the ULA where you had previous support agreements the support will be consolidated into a single Support contract (CSI). Sounds fine at the time but in the future it makes it very difficult to break this single CSI if products are not needed or used.
So what did they mean they wanted to “…cancel the ULA”. Well of course the ULA could not be cancelled as they had already certified. They still saw the ongoing support contract as the ULA as this was a single CSI for all their products. The real issue was that they wanted to reduce their support contract and initial conversations with Oracle had indicated that it would not be possible.
So what changed for them to have such an excess? Well it turns out that better Software Asset Management; more powerful hardware and database consolidation led to a reduction in processors needed. Even with the increasing core count on newer chips they still reduce the required processors as the hardware can run more databases per server.
So what is the answer? Hmmm! tough one this.
It is possible to reduce the support but it will require some serious work and effort, it will take months, trust me. Even if you can reduce the support, it will be recalculated after you agree to terminating the excess licenses. The age-old problem of your Sales Rep(s) in Oracle is that they are new business sales driven and have no interest or reward for driving this change. The support line of business won’t be jumping up and down either. However, it is possible with some work. Support want to protect the revenue but can be pragmatic.
A possible strategy is to look at what you could replace the excess licences with. For example, look at some of the other products which you may not be using which could add value and have a business case in their own right. Security is the obvious one. Look at DBVault, Audit vault, Firewall DB. All very relevant in these days of Cyberattacks. If the support is net, net the same then you might be ok. Then throw in a Cloud grenade. I call it a grenade because the cloud products include support but you cancel your subscription fairly easily in the future. Support may not like this but I can bet the Sales Rep(s) will be very, very excited. So go for reducing the support figure by replacing with cloud services and buying some new on premise products. You don’t just have to buy PaaS, have a look at Oracle Document Cloud Services for example aka Secure enterprise document management.
Clearly every situation is different, and who you work with in Oracle and the time of the year can all factor into what the ‘art of the possible is’. If you have similar issues around support and contracts why not get in touch for a confidential chat. We are happy to sign an NDA and can be assured of true independent advice, you can email email@example.com.