Spend Matters welcomes another guest post from Gregg Spivack of NPI, a spend management consultancy focused on eliminating overspending on IT, telecom, and shipping.
For some companies, an Oracle Unlimited License Agreement (ULA) is ideal. It allows them to pay a single fee up-front to get as many licenses as they need for certain Oracle products over a set period of time. Under the right circumstances, signing a multi-year ULA with Oracle may grant the business the flexibility they need to support growth.
However, there are risks to consider. Not every client needs or will benefit from a ULA. In many cases, a ULA is a fast path to overspending. As companies consider whether to pursue a ULA with Oracle, or ponder renewing their existing ULA agreement, they should take the following questions into account:
To what extent are the various licenses covered under the ULA “unproven” within your environment? Many customers purchase unlimited access to licenses for products they have never used before in their environment. The risk is that enterprises are often overly optimistic in their license usage needs for new offerings and overspend accordingly.
Has your company been proactive in building out a forecast to estimate license needs by project and timing? As a best practice, various internal stakeholders (e.g., IT, sourcing, finance, business) should be reviewing, discussing, and challenging the forecast. Overestimation leads to paying for licenses before they will actually be used.
Have you thought through the implications of having all of your company's pre-ULA support contracts combined into your ULA? If you think Oracle is inflexible in providing options to manage your support costs in a pre-ULA environment, you ain't seen nothing yet!
Have you recently dropped support on any unused licenses and are now considering including that license type in the ULA? Under certain circumstances, Oracle will force you to reinstate this support before executing the ULA.
Do the license metrics (e.g., processor-based) match how your company has previously and/or prefers to license its Oracle technology? Oftentimes ULAs fail to consider the company’s particular non-production license needs, which leads to companies buying licenses under Oracle’s Processor metric rather than its more cost effective Named User metric.
There are aspects of the considerations noted above that likely apply to many ULA or Enterprise Agreement-style software purchases and renewals (not just Oracle’s). Because of the size and cost of these purchases (often 8-figures) and the duration of these contracts, companies need to take a cautious approach in their evaluation. Investigating the risks of a ULA from many directions will help prevent overspending, overbuying, and underutilization of IT assets.