The challenge
A medium-sized, highly innovative bank had been an Oracle client for more than a decade but realized they were not getting full cost value from their license agreement. The bank wanted not only to drive down costs, but also to get more in return from their relationship with Oracle.
The bank lacked transparency into their actual Oracle footprint, including what tools they were using and who was using them. This was especially true in middleware and back office software. The bank’s footprint was complex, and leadership understood that Oracle changed licensing practices and contractual language over time, but the company did not have in-house knowledge about how to navigate that complexity. The bank’s leadership felt that they were at a disadvantage in negotiations because they did not have the in-depth subject matter expertise to truly understand their Oracle contract and Oracle’s licensing practices. It was also imperative to the bank’s leadership that it remain fully compliant with its Oracle contract over time.
Our solution for ULA optimization
To address these issues, the bank worked with Palisade Compliance to help improve the cost effectiveness and usage of its Oracle footprint, while bringing itself into compliance with Oracle. From the beginning, the bank’s leadership recognized that they did not know how to assess or understand their existing Oracle entitlements. We immediately made a difference on this front. With Oracle, it’s not as simple as counting up who is using what software. Due to Oracle’s licensing rules, frequently companies can have far higher usage rates than they are aware of. The bank discovered this was true with virtualization. With our help, the bank soon realized they were being charged for every virtual instance in their entire network, even though the software was not actually deployed on every server in that network. The bank would not have been able to identify this issue without us.
Working with us, the bank discovered many areas where it was unknowingly operating outside of its unlimited license agreement (ULA) with Oracle. Leadership developed a plan to bring these areas into compliance and decided to renegotiate their ULA with Oracle. Eventually, the bank’s leadership realized that even their ULA itself was unnecessary, as a ULA would only make sense if the bank was going to grow significantly. The bank soon saw the benefits of certifying out of its ULA, discarding the ULA entirely, and moving toward a pay-as-you-go model. This left the bank with clearly defined license entitlements that, with disciplined use of Oracle products, would leave it far less vulnerable to an Oracle audit.
The bank increased its Oracle usage without increasing its entitlement, and saved $2.2 million annually.
Outcome of our engagement with the bank
The partnership with us allowed the bank to make strategic decisions they would not have been able to otherwise, which better prepared them for the future. Our deep knowledge of Oracle gave the bank leverage and helped them to customize their response to Oracle.
As a result, the bank moved from a ULA with Oracle to certifying and paying as they go.
As well, because of the work with us, the company’s leadership now understands Oracle’s technology and licensing approach much more thoroughly. This has given them confidence to comply with Oracle’s demands only within the framework of their contract instead of giving Oracle everything they ask for. We also helped the bank sharpen and refine the language in their Oracle contract. This has enabled the bank to remove language prohibiting it from deploying Oracle tools in the cloud, which it is now free to do.
Our relationship has had even more tangible benefits for the bank. Following the partnership with us, the bank has gone from a 70% effective deployment and use of its Oracle footprint to a rate of 92%. In effect, the bank increased its Oracle usage without increasing its entitlement. This has led to at
least $2.2 million dollars per year in direct savings.
As an ancillary benefit, because we worked with the bank to map its Oracle usage, the bank made a plan to consolidate its data centers, which had grown organically over time. In the process of ensuring the bank was compliant with its Oracle licenses, it was therefore able to rationalize its data centers, reducing maintenance and costs over time.