Oracle License Agreements – Before vs. Now

oracle license agreement

The moment you buy a software license, you buy the right to make use of a specific piece of software under the terms and conditions of the license agreement. If a specific use of the software is not mentioned in your license agreement, you should not assume that you are allowed to use the software in that manner. You should at all times validate with the software publisher if you are allowed to deploy and/or use the software in the way you intend to (when not specified in the license agreement). The use rights and conditions under which you are allowed to make use of the software (including its restrictions and limitations) are defined in your agreement and associated documents. It is your obligation to read, understand and comply with these terms and conditions at all times, even when they change over time.

In this article, we will focus on one software publisher, Oracle, and discuss the different types of license agreements Oracle had in the past and explain the current license agreement that Oracle uses today: the Oracle Master Agreement (OMA).

Oracle License Agreements: SLSA, OLSA and OMA

All the Oracle ordering documents (OD) are governed by a license agreement which was previously signed and accepted. The license agreement specifies the “general terms” as applicable to all licenses, support, hardware or cloud, ordered against this license agreement. Any deviation on these general terms, so called “non-standard terms”, are listed in the original ordering document.

In order to understand what you are actually entitled to make use of, a number of documents and sources need to be reviewed, analysed, understood and maintained on a regular basis. It always starts with the license agreement itself, which changed a few times over the years:

Software Licenses and Services Agreement (SLSA)

Oracle started doing business under the terms and conditions of its Software License and Services Agreement. In case you obtained licenses more than 20 years ago, it is very likely that these licenses are bought against a SLSA. This was mainly in the time when the internet was not existing yet; the SLSAs were provided on paper.

Oracle Licenses and Services Agreement (OLSA)

After the introduction of the internet, in which licenses could be ordered through an online store, Oracle changed the SLSA into the Oracle Licenses and Services Agreement. Similar with the SLSA, the OLSA specified the general terms and conditions under which Oracle sold its software and/or solutions. An OLSA was a transaction based agreement and included with every license order.

Upon the acquisition of Sun Microsystems, Oracle started to sell hardware solutions as well. The delivery, warranties and liabilities for hardware are obviously different than for software programs (as Oracle sold until that moment in time). As a result of this, Oracle changed from its OLSA to a new license agreement structure: the Oracle Master Agreement (OMA) in late 2013.

Oracle Master Agreement (OMA)

The Oracle Master Agreement is the current agreement that Oracle still uses today. The OMA has been created to have one single agreement for Oracle’s customers to support the different lines of business within Oracle (e.g. License Sales, Hardware Sales, Support Sales, Cloud Sales, Consulting Sales and University Sales, etc.). After the introduction of the OMA, the duplication of terms and conditions were minimized and the readability of the agreement increased.

The OMA itself contains the generic terms and conditions under which Oracle sells its software and/or solutions. Different and specific Schedules – which are integral part of the agreement – specify those concepts, terms and conditions, which are particular to the specified product and/or service.

The following schedules can be included in OMA:

  • Schedule P (Program Schedule)
  • Schedule S (Services Schedule)
  • Schedule H (Hardware Schedule)
  • Schedule C (Cloud Schedule)
  • Schedule O (On-Demand Schedule)
  • Schedule L (Linux/OVM Schedule)

More details about the above Schedules can be found in one of our articles: What Proof of License means for Oracle Software.

Why a new OMA?

Especially due to the large amount of acquisitions made by Oracle, the number of different terms and conditions for the different (legacy) agreements that Oracle and its customers had to manage between their companies increased tremendously.

As a result of this, certain terms and conditions for each product and/or service or geographies in which customers are operating had to be re-negotiated over and over again. Therefore, there was a need to simplify this process through a new agreement: the OMA.

With the new OMA agreement and its corresponding Schedules, the following Order of Precedence is normally applicable:

  • The general terms of the OMA are the base level of the agreement.
  • The terms and conditions of the Schedules take precedence over the general terms as included in the “base” OMA agreement itself.
  • The terms and conditions of the ordering document (specifying the products/services ordered) take precedence over the terms and conditions of the OMA and its Schedules.

As a result of the above it should be understood that:

  • A change in the general terms section of the OMA (e.g. an audit clause, limitation of liability, non-disclosures, etc.) is a change that applies to all Schedules and all ordering documents and can therefore have an impact on the overall relationship between Oracle and an end user.
  • A change in a specific Schedule is a change that is only applicable for a specific product and/or service.
  • A change in a specific ordering document is a change that is only applicable for a specific order of a product and/or service.

What type of OMA you can have?

There are different types of OMA agreements.

  • All products and/or services that are ordered directly through an Oracle entity will be accompanied by an OMA which is typically valid for the period of 5 years.
  • All products and/or services that are ordered through the online Oracle Store or through Oracle OPN (for Oracle Partners), will be accompanied by a Transactional – OMA (TOMA).

For all Cloud Services, Oracle maintains the Cloud Services Agreement (CSA) in addition to the OMA.

License agreements: Standard and non-standard clauses?

A license agreement can include standard but also, non-standard negotiated clauses.

A “standard” clause is the text that describes the legal or business language that is used to author a contract. Clauses are drafted based on both business and statutory requirements.

A “non-standard” clause is a clause in a non-standard format, which has typically been negotiated for the specific customer and can include:

  • a modification to an existing clause
  • the absence of a required clause
  • a newly added clause

Conclusion

It is important to understand the terms of your existing license agreement (SLSA, OLSA, OMA) to ensure that you are aware of the rights and obligations you have and how any deviations may impact the licensing. Any reference made to an online source (as included in your license agreements) should be closely monitored to keep track of your rights and obligations. Not managing the terms and conditions of a license agreement under which certain licenses may have been purchased can lead to huge financial implications. There are examples which we have seen at our end users in which only one word from an agreement was misunderstood and which led to a huge financial exposure for non-compliance.

You might want to consider getting the assistance of experts who can manage your license agreements and help your business to better understand your software assets. We can support you in taking control of your software assets. We offer a range of practical solutions through a combination of services and software. Reach out to us for a conversation with one of our experts to find out the best solution for your situation.

This article was published on 07-05-2020