Oracle ULA audits are a license to bill

Customers can be pushed into renewing agreements for fear of the unknown, but there are cheaper options

Oracle is threatening software audits as customers seek to exit Unlimited License Agreements (ULAs).

ULAs offer unlimited licenses for specific Oracle products under a contractual arrangement with Big Red. The dominant database and application vendor considers these agreements "an easy way for a large global organization to support business agility and value creation."

But critics have argued that they are not the most cost-effective way to license Oracle software, and buying a perpetual license agreement can save money.

If your goal is to renew your ULA, Oracle will help you spend money with them. If your goal is to get out, you're not going to get a helping hand....

The ULA certification process comes into play when a user organization prepares to leave the agreement. The user reviews and documents their use of Oracle products and reports the numbers to Oracle in preparation for buying perpetual licenses.

The alternative is renewing the ULA, which is the option Oracle, a $52 billion-revenue company, would prefer as it earns the vendor more money, said Craig Guarente, founder and CEO of software licensing advisor Palisade Compliance.

"Oracle has no interest in you certifying your ULA. Their goal is to get you to renew: when you certify a ULA you're not getting Oracle more money. Everybody at Oracle makes money when Oracle makes more money. It's not a bad thing, but no one gets more money to help you certify at Oracle," he told a recent webinar.

There was significant pressure within Oracle to get customers to renew their ULAs, he said. Oracle has talked about auditing customers who exit the agreements upon certification as newer ULAs contain clauses with some obligations to Oracle in terms of sharing information.

"We have one client who certified their ULA and they got the craziest letter from Oracle. Right off the bat, they said, 'Not only are we auditing you now, but if we disagree with your certification in any way, you're gonna give us more money.'

"I'm paraphrasing but they said if the user has too many licenses, then it should give Oracle more money. If it certified too few licenses, it also would have to give Oracle more money. It is total nonsense. They have no right to audit the certification.

"There's some crazy things Oracle is doing right now, so careful if you're trying to do this on your own. If your goal is to renew your ULA, Oracle will help you spend money with them. If your goal is to get out, you're not going to get a helping hand. It's not a negative thing about Oracle, it's just: why would they help you?"

He said ULAs were often renewed out of nervousness in dealing with the vendor, or not having the right information to handle the problem before the deadline, which often arrives at the end of May with Oracle's financial year end.

Also on the webinar was Victoria Molloy, chief commercial officer of Support Revolution, which provides third-party support for Oracle products.

She said one Oracle user had signed a ULA as it was considering moving its infrastructure to AWS. "Instead of worrying about any compliance issues, they signed up for a three-year ULA agreement with Oracle but they never actually moved to AWS. Then when it came to the renewal, they had a change in senior management and no one really knew what was happening. So then they renewed again for a further three years. They spent a lot of money – in the millions – over a six-year period in a ULA agreement that they never used."

Guarente said ULAs could be a good option when a user organization was growing dramatically. Alternatively, they could be the least bad option if there was a serious compliance issue, he said. ®

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