How we helped a Northern European bank maximize the benefits of their Oracle ULA
Professional advice is crucial for saving money in the long run
Company: Northern European Bank
Case: Renewal of the Oracle ULA for Technology products
Cost avoidance: 2.1 mil USD (extended support)
Cost Savings: 43,8% of the initial price
Many (large) organizations enter into an Oracle Unlimited License Agreement (ULA). The reason for this is represented by the benefits it offers: paying a single up-front fee to receive an unlimited amount of licenses (for a limited amount of programs) for a limited period of time (usually 3 or 5 years).
Once the ULA expires, end users have two options:
- a) certify and continue to use perpetual licenses for the deployed software going forward or
- b) renew the ULA
This last scenario was applicable to one of our customers, a large Northern European bank that asked for our support when they wanted to renew their unlimited license agreement. They needed a ULA since they were planning to setup a new datacenter which required a large (but unknown) amount of licenses and wanted to have clarity on the fixed costs without any surprises. They asked for our support because they did not have the in-depth knowledge to determine their actual license compliance position and what could be negotiated from a pricing and contractual perspective.
In this case, we supported the customer with our negotiation and advisory services for their ULA agreement. The bill of materials included Oracle Database, Database Options, WebLogic Suite and its options, Business Intelligence and Golden Gate. We supported their procurement team with the commercial contract negotiation in order to renew their ULA.
At the start of our engagement, we worked with them by conducting a review of their existing license agreement and identified 21 distinct contractual clauses that should be improved in the new agreement. This included language around mergers/acquisitions/divestitures, non-standard audit clauses, audit-holiday for 5 years, non-standard customer definition, language to be able to count deployments on VMware on a cluster level, language to be able to count and certify deployments on public cloud and, most important, language which enabled the customer to continue to pay a flat support maintenance fee (without any indexation) for the next 50 years.
The benefit of a new ULA was that they had upfront clarity on what the total cost would be towards Oracle, instead of having uncertainty on how many Processor licenses they would need to have. By buying it all upfront there was a security on how much they would need to spend and at the same time, they would not have been bothered by an Oracle audit during the setup of such datacenter.
Despite the fact that the customer now has a ULA which will last for another 4.5 years, the customer engaged with us in our Oracle Managed Service program. Through this program a license compliance review is performed on an annual basis to a) determine the actual consumption (value) the customer obtains from its agreement, b) determine any non-compliance issues as a result of deployed but unlicensed Oracle programs and c) to internally cross charge to the individual departments the fees associated to the total support stream.
Business impact and results
The new ULA resulted in a situation where the customer avoided a large uncertainty in their total spend for the next years by paying it all upfront and by having security in their contract to make sure that they could get the best value out of their ULA when they would want to certify it.
The initial price as asked by Oracle was brought down considerably. Apart from negotiating down the price, we negotiated a waiver of the extended support fees during the term of the ULA. This means that, on annual basis, we saved them 2.1 mil USD in extended support. Besides this extended support waiver, we made sure that the customer will not need to pay any support indexation for the next 50 years (!), so also not when the current ULA is certified at the end of its term.
Are you the next customer that will be able to maximize the value of his new ULA, by not spending money on any support indexation for the next 50 years? Contact us for more information.
“B-lay helped us with more than what we asked for or expected in such a complex situation. Their expertise in software licensing and negotiation saved us a lot of time and money.”