May 31 was the last day of Oracle’s fiscal year. As a result, many companies have ULAs (unlimited license agreements) with Oracle that expired and must now be certified. Certification of a ULA is highest risk point in the ULA lifecycle and often results in customers facing multimillion dollar true up costs. That’s right, after 2 or 3 years of not counting your Oracle installations, now is the time when you have to go through the audit process and tell Oracle how many licenses you are using. This process can cost you millions of dollars if not properly managed.
Why is the Oracle ULA certification process so risky?
On the surface the ULA sounds like a great deal. If managed correctly, this licensing vehicle can be tremendously advantageous. However, many clients fall into the complacency trap. They are sold a ULA contract on the basis of “not having to count” and “use as much as you can.” Then at the end of the term they are ill prepared to have to actually manage their license usage. Many times they just extend the ULA and spend millions of dollars for the freedom of not counting for another 2 or 3 years. This type of extension is just delaying the pain and increasing your liabilities down the road. Eventually you have to count.
The second reason the ULA certification is so risky is the fact that you will be audited at the end of your ULA. Oracle’s customer audit team, LMS, even has a brochure online touting their “free” ula certification services. Please keep in mind that Oracle does not refer to these services as audits. In fact, they say that “LMS ULA Services are neither audits nor reviews, but opportunities for customers and Oracle to work together.” [Emphasis added] There’s an old saying, “If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.” At Palisade Compliance we know this is a duck/audit. Over the last year we’ve seen far too many customers take Oracle up on their free services and end up with a multimillion dollar ULA certification compliance finding.
What can you do if your ULA has expired?
For those customers looking to certify their ULA, the best course of action is to self-certify and not let Oracle LMS do the work. You simply never want a software vendor telling you if you are in compliance or not. It’s up to you to maintain your compliance position and now is the perfect point to take control. However, to do this properly you need to have both an expert understanding of Oracle’s licensing, contracts, business practices, as well as of your technical implementations. At Palisade Compliance we’ve broken down the Oracle compliance process into 12 steps. Only 4 of these steps involve counting processor cores and discovering Oracle database and database options in your environment. The remaining eight steps revolve around business (non-technical) considerations.
Now the question is, do you have the Oracle expertise in house to self-certify?