Navigating the twists and turns of Oracle ULA exits and renewals – Part 1

When it comes to Oracle ULAs, mishandling the renewal or exit can have serious consequences for your organisation. The complex process is filled with potential financial pitfalls and in order to overcome them, you’ll need robust and detailed planning based on specialist knowledge and expertise of Oracle and its ULA licensing.

In this blog, we’ll take you through the challenges and mistakes we’ve seen organisations experience whilst executing ULA exits or managing their renewals.

Oracle ULAs: a good deal or a furtive trap?

One of the most useful bits of information we can share with organisations who are handling Oracle ULAs is that it is never too early to start thinking about the end of the ULA. That’s why we’re talking about ULA exits and renewals now, just after a key renewal period for Oracle at its year end in May. Indeed, we’ve come across many organisations that leave the planning until the last-minute or start the negotiations with the vendor too late. It’s always good to get a head-start on any software renewal, but particularly when it comes to ULAs, it pays to be prepared.

Firstly though, what exactly is an Unlimited License Agreement (ULA)? In basic terms, it is a set of products with unlimited usability during a three or five-year contract period. The objective is to deploy as much as possible within this time to get the best value for your investment, only declaring usage at the exit/renewal point.

This approach has many benefits for certain organisations. For new businesses that are scaling quickly and don’t necessarily have the capacity to go back and forth with vendors, ULAs are a good idea, allowing them to deploy as much software as they need. For organisations that don’t have in-house expertise, ULAs don’t require expert product knowledge, and on a procurement level, having all Oracle products in one agreement is very convenient. From the vendor’s perspective too, ULAs have their advantages – contractual obligations are relatively simple for both parties, and from a sales perspective, the all-in-one package makes it easier to reach targets.

However, ULAs also have their downfalls. Whilst having everything in one package makes things easier, it can also be a money pit, as you might end up with software you neither need nor know how to deploy. In addition, while consolidating all Oracle assets into one agreement is very accessible, when it comes to exiting or renewing, it can become challenging to remove products at the end of the ULA, and/or change the ULA’s terms and conditions. Many organisations are left with the perception that an Oracle ULA is a trap. Whilst ULAs do work very effectively if used properly, sometimes, it’s just time to reset your commercial agreements with Oracle.

When the ULA just doesn’t fit the bill

If you’re looking to exit rather than renew your Oracle ULA, you must first look at why you’re exiting. As well as avoiding some of the above issues, ULAs might not be right for your business for a myriad of other reasons. IT or business requirements might change during the lifetime of the ULA. For example, if you’re moving to the cloud, or maybe you’ve simply maximised Oracle deployment beyond any future requirement.

Of course, Oracle might still be a strategic platform, but the nature of the initial ULA may not be relevant to your business anymore. It may be time to look at different ways to contract with Oracle that fulfil your requirements.

It still pays to be careful here however, as you want to be in the best place when negotiations start and you MUST have a strategic exit approach. But before we get to what you should be doing, below are the things you should take care to avoid.

Common pitfalls of a ULA exit

Last-minute decision-making: The mistake we see the most often is that businesses leave reviewing their ULA to the last-minute. As the exit date approaches, we’ve seen organisations panic deploy software, whilst others struggle to understand the deployment of their Oracle assets. These oversights cause many problems when it comes to the exit point – to begin with, Oracle does not take too kindly to organisations deploying products at the end of their contract. You’ll also find yourself going in circles if you don’t know what you want to achieve out of the negotiations. Not being in control of the exit discussions and the result could be detrimental to your organisation.

Misinterpretation: Another misstep we see frequently is people’s perception of ‘unlimited’. Indeed, many people in the wider organisations misunderstand that ULA doesn’t necessarily cover everything. As a result, this leads to deployment software that’s not included in the ULA agreement. This can be costly when it come to the exit point and is also likely to precipitate an audit. Similarly, not knowing your contract terms in detailwhat did you sign up to? what are your metric definitions? in what entities can we deploy? – can have the same problems.

Mismanagement: A big problem with the ULA renewal or exit is that organisations may not involve the right people or involve them far too late in the process. Often, the process is just be given to procurement or IT to handle. In actual fact, the businesses as a whole need to be involved so that the ULA can be deployed and managed properly. Assigning the right people to manage the ULA, and setting your strategic outcomes is crucial, before attempting any engagement with Oracle.

Keep an eye out for ‘Navigating the twists and turns of Oracle ULA exits and renewals – Part 2’ where we’ll be exploring the consequences of mismanaging your Oracle ULA and what you can do to avoid the pitfalls. In the meantime, to find out more, take a look at our recent webinar ULA Exit or Renewal? – Myths, Mistakes, and Making it Work!:

 

ABOUT THE AUTHOR

Author: Robert Lamb, Oracle Practice Head, Livingstone Group

Rob is passionate about Technology and Licensing and has dedicated the past 20 years working with Oracle customers.

During the last 10 years Rob has supported clients to manage their Oracle Application & Technology License as well as consulting on contract negotiation, cost optimisation & Audit Protection. Rob has experience in working with over 250 Oracle customers worldwide