As you all know, I’ve spent a lot of time in the Oracle licensing and contracting world. I’ve been looking at Oracle contracts (for Oracle and our clients) for over 20 years! I’ve seen them all. The Oracle ULA (Unlimited License Agreement) is one of Oracle’s most profitable contracting vehicles. Larry Ellison once said, “We’d much rather sit down with a customer and agree on a company license, use as much as you need. Unlimited License Agreement (ULA) is our preferred license agreement.” Clearly, Oracle loves the ULA. There’s a great reason for that.
Over the last 4 plus years at Palisade Compliance we’ve helped many clients manage their ULAs, get in new (better) ULAs, and get out of ULAs through certification. With this track record, Palisade Compliance is certainly not anti-ULA. If fact, we’ve helped several clients get into new ULAs in just the last several months.
With all this experience, there is one piece of advice, that I can give to any Oracle customer that has a ULA. Here it is….CERTIFY AND GET OUT!!! That’s right. You need to get out of that ULA. Being trapped in a ULA is like one of those horror movies where the character has one chance to get out of the house but ignores that and stays in. Don’t be that guy. GET OUT!!!
Oracle loves ULAs because they are wildly profitable for Oracle. Wildly profitable for Oracle means wildly unprofitable for you. Let me be clear: a one time ULA may be a great thing for an Oracle customer. However, it’s the renewal or extension of that ULA that will kill your budget.
Why get out?
The chart below shows the cost difference of renewing/extending a ULA vs. certifying a ULA. The numbers are dramatic. At Palisade, we’ve helped many clients do just this. Here is what a hypothetical Oracle ULA renewal can cost you. Assume 22% for support, three-year terms. Oh, and the amounts always go up….because it’s Oracle.
Here is what a Palisade Compliance Optimized ULA spend can look like:
Look at the difference!! You go from spending $39m with Oracle to $13m. You can cut your costs by two-thirds. Think of all the things you could do with that extra money. You could invest in your business rather than investing in Oracle’s business.
There are two keys to certifying a ULA, getting out, and saving this money. First, you have to optimize your Oracle deployment to take full advantage of Oracle’s licensing policies. Second, you have to be compliant at the end of your ULA. If you are out of compliance, for any reason (contract terms or software compliance) then Oracle will use that as a lever to get you to renew that ULA. Oracle wants that $39m. Who can blame them?
There are several other reasons to certify and not new extend/renew your ULA. It’s not just spend. Oracle, as they do, are always putting more hooks and clauses to lock customers in and make it harder to certify. We call them “gotchas.” Oracles 2016 contracts have more gotchas than previous ULAs. Like every software vendor, Oracle learns and adapts their contracts to produce maximum revenue.
Achieving the cost savings above is not easy. The easy thing to do is just sign a new ULA with Oracle and give them more money. That might be painful to your budget, but Oracle will gladly put a new ULA in front of you. If you are okay with the terms, just sign the contract and write the check. It takes some planning and effort to get out of your ULA. Sometimes you are forced to sign an extension because of an acquisition you made, or a product you deployed, or some other reason. Even in those cases it’s important you negotiate your new ULA with better terms that facilitate an exit strategy.
At Palisade Compliance, one of the things we do really well for our clients is help them get out of their ULAs. We do this better than any other firm in the world. There are three reasons why:
First, we are not an Oracle reseller. Palisade makes no money should you decide to buy more Oracle or spend less with Oracle.
Second, our delivery team is all ex-Oracle contracts and LMS. No firm has the Oracle experience we have on both sides of the table.
Third, we only help our clients solve their Oracle issues. Every day, all day, we focus on this one area. We’ve helped customers certify Oracle ULAs going back to 2012 and those clients have never looked back. They have not spent another penny on those Oracle products.