Why we advised a F500 enterprise to certify their Oracle licenses

 SAVING $30 M 

Company: publicly traded Fortune 500 enterprise heavily dependent on Oracle solutions

Case: next steps after an expired Oracle Unlimited License Agreement 

Cost savings: more than $30 million by certifying instead of renewing the Oracle ULA 

A global Fortune 500 company entered the third year of its three-year $10 million Oracle Unlimited License Agreement (ULA), that covered multiple legal entities, businesses and countries. Because of this, its asset management team needed to determine the appropriate next steps for when the ULA would expire. The original ULA was expected to cover around $30 million worth of Oracle licenses, but the company did not have a clear picture of how many licenses it was using, or what the future potential deployment was going to be. In order to ensure that the company was making the right investment for its current and future IT and business needs, and comply with the vendors terms, conditions and timing of the ULA certification process, it engaged the advisory services of B-lay. 

ULAs 

The benefit of Oracle’s ULA is that the enterprise pays a single up-front fee to receive as many licenses as it wants for a specified set of Oracle products over a fixed time frame – also known informally as the “all you can eat” model. At the end of that time frame, Oracle will grant perpetual licenses for all of its software that has been deployed, assuming its use has been properly documented – a process known as certification. But many companies simply opt to negotiate a new ULA, since certifying requires engaging in a full software asset inventory to the satisfaction of a complex, global deployment can be complicated, time consuming and costly. However, without doing that inventory, it is very likely that a company would be overpaying. 

Our solution

To help the F500 company make the right decision, we established a baseline of the current global software deployment, along with a comprehensive overview of the potential future software roll-out within the different IT departments. The baseline included all legal entities, majority owned subsidiaries, joint ventures and business units of this organization (globally). In parallel, a thorough analysis of the ULA agreement was performed, which provided an overview of the terms and conditions, restrictions, limitations, usage rights, definitions and the product features/ functionalities of the software programs as included in the ULA agreement. This analysis enabled the customer to understand what the company had actually purchased. 

The two reports were combined with a comprehensive financial breakdown prepared by the advisory team. Based upon the insights gained from this process, it was determined that the client could further maximize the value of its ULA prior to its expiration. By advancing the roll out of additional Oracle software programs, the client brought its actual utilization of Oracle software to a ‘normal’ value of $40 million, for which they had paid a one-time unlimited license fee of $10 million. 

Business impact and results 

B-lay’s thorough asset inventory made it clear that it was in the interest of the company to certify their software licenses so that it could benefit from a perpetual license. For such a vast, global deployment, it is unusual for Oracle to simply accept the client’s word at face value, and often requires a full audit to finalize the certification process. However in this case, we were able to provide insight in the real “raw” software deployment data gathered through a solid, documented methodology. After several rounds, Oracle eventually accepted and approved the certification without requiring any software audits, and granted the company perpetual licenses for the full value of the $40 million of software that they were using worldwide. If the company had chosen to negotiate with Oracle for a new ULA, they would have had to pay an additional $30M. This means that they were able this total amount thanks to our services.

“We weren’t sure what our next move should be when our Oracle ULA was about to expire – should we renew or certify? B-lay’s thorough review of our complex, global Oracle implementation clarified that certification was preferable, and their extensive experience in working with Oracle enabled us to accomplish it with millions of dollars of cost savings.”