20150610 oracle unlimited license agreements - not that unlimited - final

Presentation Richard Spithoven

Oracle

Unlimited License Agreements

Not that Unlimited!?


Introduction

Richard SpithovenDirector / Partner b.lay

2013 – present

Regional DirectorOracle EMEA – LMS Europe South

2009 – 2013

Principal Licensing consultantOracle Europe, Middle-East & Africa

2005 - 2009


Unlimited License Agreements• What is it?• General Conditions?• Product Conditions?• Usage Conditions?• What is the price?

1

2 Situations during the term of the ULA• What happens when I acquire an entity?• What happens when I divest an entity?• What happens at the end of the ULA?• Certification? What to do?• But what is a certification floor?

Agenda


ULA Certification? Do it right!

• Timing?• What to include?• How to count?

3

4 Conclusions

• Some recommendations…• Some final take aways• Questions?

Agenda


ULA: What is it?

An Unlimited License Agreement (ULA) is a

time-based license agreement from Oracle Corporation providing an

unlimited use for a

subset of Oracle’s products.


ULA: What is it?

TERM

• Varies from

• 1 to 5 years

ORACLE PRODUCTS

Almost all

Oracle Programs

CAPPED & UNCAPPED

Usage capped up to a certain maximum

quantity

OR

Usage un-capped, providing an unlimited deployment capacity

EXISTING LICENSES:

Licenses are “converted and replaced’ and do no longer

continue to exist;

Support fees are added to the new support fees of the ULA programs,

resulting in a new combined “Total Support Stream”


ULA: General Conditions

The ULA is limited to a number of legal entities, listed in the so called “Customer Definition”

• Agreement refers to “You” and “Your” which is the legal entity that signs the contract.

• Agreement refers to a list of entities which is typically listed in an Exhibit of the Ordering Document• These are the legal entities that are allowed to make use of the software programs.

• Legal entity which signs the contract is responsible that all the other legal entities (in the Exibit) are complying with the terms and conditions of the order doc, license agreement, program documentation etc.


ULA: General Conditions

Exibit includes:

• Typically: • majority owned subsidiaries

• Occasionally: • minority owned subsidiaries• joint ventures • legal entities with voting rights.

Any legal entity NOT listed in the Exibit or referred to in the Customer Definition is therefore NOT allowed to make use of the Oracle programs as included in a ULA.


ULA: Product Conditions

The ULA is limited only to these Oracle Programs as listed in the ULA Ordering Document;

Any Oracle Program not listed the Ordering Document requires separate licensing, even if:

• An Oracle Program is (technically) related with the Oracle Programs as listed in the ULA

OR

• An Oracle Program is shipped or downloaded with the Oracle Programs as listed in the ULA.


ULA: Product Conditions – Example

Oracle Programs related to Oracle Database Enterprise Edition which require separate licensing:

• Oracle Database Personal Edition

• Oracle Database Standard Edition One

• Oracle Database Standard Edition

End-user has an ULA for :

• Oracle Database Enterprise Edition

• Diagnostics Pack

• Tuning Pack

• Partitioning

Oracle Programs shipped/downloaded with Oracle Database Enterprise Edition which require separate licensing:

Multitenant, Real Application Clusters (One Node), Active Dataguard, Partitioning, Real Application Testing, Advanced Compression, Advanced Security, Label Security, Database Vault, OLAP, Advanced Analytics, Spatial & Graph, TimesTen Application-Tier Database Cache, Database In-Memory, Database Lifecycle Management Pack, Data Masking and Subsetting Pack, Cloud Management Pack for Oracle Database


ULA: Usage Conditions

The ULA can be “Capped” or “Uncapped”

• “Capped” ULA’s grant the right to make use of the Oracle ULA Programs up to a certain maximum amount of licenses (e.g. 100 Processor licenses Oracle Database Enterprise Edition)

• “Uncapped” ULA’s grant the right to make use of the Oracle ULA Programs in an unlimited capacity.

A combination of “Capped” and “Uncapped” Oracle programs can be part of one and the same Ordering Document.


ULA: What is the price?

• There is no pricelist for ULA’s; pricing is customized depending on the situation.

• Pricing is determined by:

• Oracle Programs in the ULA (More programs = More value = Higher price)

• Term of the ULA (1-5 years) (Longer term = More value = Higher price)

• Current investments made in Oracle Programs (“Installed Base”)

• Current demand of Oracle Programs (“Current Demand”)

• Expected future needs of Oracle Programs during the term (“Future Growth”)


ULA: What happens when I acquire an entity?

✔

Legal entities acquired during the term of the ULA, are by definition NOT allowed to make use of Oracle ULA Programs.

End user can request approval from Oracle to add an acquired entity to the ULA.

✗Approved by Oracle: Not approved by OracleExisting licenses of acquired entity are “converted and replaced and do no longer exist;

Existing support fees of the acquires entity are added to the existing support stream.

Acquired entity is required to license it’s deployment and usage of the Oracle programs separately


ULA: What happens when I divest an entity?

Legal entities divested during the term of the ULA, are normally allowed to make use of the Oracle ULA Programs for a limited period of time after the divesture took place (“grace period”)

Grace periods can vary between 6 months (standard) to 1 year. Always check your specific agreement to validate what grace period has been agreed.

Upon expiration of the “grace period”, the divested entity is required to license the deployment and usage of the Oracle programs themselves.

In case no grace period has been agreed/allowed, the divested entity will need to licensethe deployment and usage of the Oracle programs themselves upon the divestiture date /

legal entity change.

✗


ULA: What happens at the end?

At the end of the term of the agreement, You may choose to either:

RENEW THE ULA

New license and support fees are negotiated;

Old ULA support stream is rolled in new ULA DECLARE AND CERTIFY YOUR USAGE TOWARDS ORACLE

You need to determine the current usage of the Oracle Programs;

Oracle assigns perpetual licenses based on the current usage of the Oracle programs

You do not need to pay a “true up license fee”;

You continue to pay the Total Support Stream going forward, annually


ULA: Certification? What to do?

The standard clause states:

• On the XXth anniversary of the agreement, unlimited rights terminate.

• Within 30 days of this date, you need to follow a “certification process”, which includes:

• You provide Oracle a certification of the then current quantities of Processors on which the Oracle ULA programs are installed AND running. (“Final License Count”)

• Certification is signed by a C-level representative of your organization.


ULA: But what is a certification floor?

• A “Certification Floor’ is a non-standard term of a ULA agreement.

• Certification Floors can be added to a ULA agreement, in which Oracle and End-user agree that the certified deployment shall not be less than:

• XX Processors Oracle Database Enterprise Edition• XX Processors Partitioning

• A minimum amount of licenses is listed for all Oracle ULA programs in an Exhibit.

• Certification Floors are there to protect an end-users investment

• In case an expected deployment of Oracle ULA programs does not happen during the term of the ULA, the end-user is ensured that it will receive a minimum amount of perpetual licenses at the end of the ULA, at all times.


ULA: Certification? Do it Right!

ULA certifications are time consuming and need to happen on time!

- Executing a complete and accurate measurement of Oracle software can easily take 3-6 months.

- Executing a ULA certification under time pressure, almost always results in either:

a) Declaration and certification of lower usage compared to the real usage:> Resulting in unlicensed use of software after the certification itself.

b) Declaration and certification of higher usage compared to the real usage:> Which is considered to be fraud under local and international IP laws.

Missing your obligation to certify on time could result in a claim that you are in breach of you contract and that your license agreement may therefore ultimately be terminated or “certified” against 0 licenses.



ULA certifications should include the whole organization!

ALL LEGAL ENTITIES should be included

(as per the Customer Definition)

ALL DATACENTERS of your organization

should be included

ALL DEVICES of your organization

should be included

(including test, development, acceptance, production, disaster recovery etc)



ULA certifications should only include the Oracle ULA programs!

• ULA’s are limited to a SUBSET of the Oracle program portfolio, but

• Many Oracle Programs are (technically related) to the ULA programs

• Many Oracle Programs are shipped/downloaded with the ULA programs itself.



ULA certifications on Oracle programs “Installed AND Running”?!

- “Installed AND Running vs “Installed and/or Running”

- Avoid certifications of only installed software

- Running is NOT defined in your agreement and differs per Oracle Program

- “System Usage” ≠ Usage (Running)> System Usage should not be included in the ULA certification



ULA certifications on Processors!? (1/6)

ULA’s for Database, Middleware and Business Intelligence Programs require you to certifythe quantity of Processors on which the Oracle Programs are installed and running.

• Not applying the right methodology, rules and calculations can lead to incorrect certifications!

• Processors (with a capital “P”) refer to the Processor definition as included in your license agreement.

But how do you need to count the number of Processors ?

• And what about # of Processors in a VMWare environment ?• And what about # of Processors in a IBM LPAR environment ?• And what about # of Processors in a Sun Solaris Zone environment ?• And what about # of Processors in an Oracle Authorized Cloud environment?




Oracle’s Current Processor definition states:

Processor: shall be defined as all processors where the Oracle programs are installed and/or running. Programs licensed on a processor basis may be accessed by your internal users (including agents and contractors) and by your third party users. The number of required licenses shall be determined by multiplying the total number of cores of the processor by a core processor licensing factor specified on the Oracle Processor Core Factor Table which can be accessed at http://oracle.com/contracts. All cores on all multicore chips for each licensed program are to be aggregated before multiplying by the appropriate core processor licensing factor and all fractions of a number are to be rounded up to the next whole number.

….

For the specific Processor definition applicable to your ULA, please check your contractual documents at all times.




Oracle’s Processor Core Factor Table:

Please check the following URL at all times to validate the current and latest Oracle Processor Core Factor tablehttp://www.oracle.com/us/corporate/contracts/




Soft Partitioning technologies used (e.g. VMware) require an end user to count:

All the physical cores of all the physical machines on which the virtual server can be hosted (“installed and running”) to determine the number of Processors, which need to be included in the ULA certification.

Please check the following URL at all times to validate the current Oracle Server Partitioning policy http://www.oracle.com/us/corporate/pricing.

http://www.oracle.com/us/corporate/pricing




Hard Partitioning technologies (e.g. Solaris Zones, IBM LPARs) require an end user to count only the “sub capacity” of the server on which the Oracle software programs are installed and running to determine the number of Processors which are required to be included in the ULA certification.

NOTE:

Please check the following URL at all times to validate the current Oracle Server Partitioning policy http://www.oracle.com/us/corporate/pricing.

Detailed expert sessions on how to license and count the number of licenses in case Oracle software is deployed in a VMware environment, IBM LPAR environment, Sun Solaris Zone environment will follow soon.

LPAR1 AIX - Oracle DB(Type = Dedicated-SMT)

1 2 73 85 64

LPAR2 Linux(Type =

Dedicated-SMT)







Oracle approved the following cloud computing environments:- Amazon Web Services – Amazon Elastic Compute Cloud (EC2)- Amazon Simple Storage Services (S3)- Microsoft Windows Azure Platform

For the purpose of licensing Oracle programs in any of these cloud computing environments, End users are required to count each virtual core as equivalent to a physical core.

Licenses acquired under a ULA may be used in such a cloud environment, BUT End users may NOT include those licenses in the certification at the end of the ULA term.

Please check the following URL for the full policy around “ Licensing Oracle Software in the Cloud Computing Environment”http://www.oracle.com/us/corporate/pricing/cloud-licensing-070579.pdf




Considering a ULA?Get clarity on your current licenses entitlement and deployment, your current demand

and expected growth to determine your best option and commercial/negotiation strategy/options.

Having a ULA?Conduct a mid-term assessment (at the mid of the ULA term) including:

• A detailed assessment of the deployment of the ULA programs to show consumption and overall usage levels.

• An evaluation of the efficiency of the financial investment in the ULA, and an assessment of the cost savings.

• Determine which actions can be taken to optimize and maximize the value of the ULA, before the end term.

Some recommendations…


Up for ULA certification?

• Start preparing the ULA certification at least 6 months before the ULA ends.

• Involve your legal department to obtain a complete picture ofall the legal entities allowed to make use of the ULA, mergers and/or acquisitions.

• Involve your IT department to obtain a complete picture ofall datacenters/servers on which ULA programs can be installed and running.

• Involve your database administrators, infrastructure managers and business application owners, to measure the Oracle software programs which are “installed and running”.

• Involve a specialized license management firm to support you during the ULA certification

For example to:

Analyze your Oracle usage data correctly before submitting your certification to Oracle,

Identify if you do not have any license compliance issues

for related software programs NOT included in your Oracle ULA.

Some recommendations


Unlimited License Agreements can be an exceptional arrangement for your organization that provide you a lot of benefits as long as you are aware of the details before, during and at the end of the ULAs involved, and as long as you can manage the risks related to it.

A software license management company like b.lay can support you in:

- Pre ULA Assessment Services (If you consider to enter into a ULA)

- Mid Term ULA Assessment Services (If you have already entered into a ULA)

- End Term ULA Assessment Services (If you are approaching to the end of a ULA)

Some final take aways

We guarantee that we have only your objectives in mind.

It’s our objective to enable you doing more and worrying less.


Questions?


① Oracle License Review or License Audit: Answers to your Top 20 Questions

② Oracle Licensing Guide:Your quick Oracle Licensing Guide

③ Oracle Unlimited License Agreements (ULAs):An overview of the major risks you should be aware of

④ Oracle Pool of Funds Agreements:An overview of the ins & outs of this type of agreement

⑤ Oracle E-Business Suite:An overview of the most common license compliance issues

Further reading on www.b-lay.com


Audit SupportGet support during your (internal) audit

ULA ManagementManage and optimize your ULA agreement

License OptimizationOptimise the value of your licenses

License ConsultingGet expert license consultancy services

SAM Tooling MaintenanceConfigure and maintain your SAM Tool properly

20150610 oracle unlimited license agreements - not that unlimited - final

Software

oracle corporation

ula ordering document

legal entity

usage conditions

to5 years oracle products

general conditions exibit

unlimited use

number of legal entities