Oracle ULA – How do I certify my Oracle programs on Public Cloud?

oracle agreement

Many end users entered into an Unlimited License Agreement (ULA) with Oracle Corporation for a certain period of time. At the end of their ULA, the users have two options: renewing their ULA or certifying it. However, many end users that entered into an ULA a couple of years ago are currently in a transition phase to move their on premises deployments to the (public) cloud. The public cloud solutions such as Amazon EC2 and RDS or Microsoft Azure are the most commonly used at this moment in time. But how does it work if you have a ULA agreement with Oracle and you deploy Oracle programs in the cloud from such providers? This article provides an overview of all the things you need to know if you are in this situation.

Oracle on Public Cloud

Today there are many different cloud providers. The word “cloud” however is quite often being used for different types of IT infrastructure(s) and/or cloud services. It sometimes refers to cloud providers like Amazon EC2, Amazon RDS, Microsoft Azure, Google Cloud, Oracle’s IaaS or PaaS cloud services, but it can also refer to your outsourcer’s “private cloud” solutions. The latter in essence is nothing different than a virtualized VMware infrastructure on which your Oracle programs are deployed.
Because of the word “cloud” being used for different types of IT infrastructures, it is important to keep in mind that until now Oracle only “approved” or “authorized” three different public cloud providers in its so called “Licensing Oracle Software in the Cloud Computing Environment” policy. As per this policy document, Oracle allows you as an end user to deploy the Oracle programs on Amazon EC2, Amazon RDS and Microsoft Azure, but Oracle states that you may not include the licenses deployed with these cloud providers in the certification at the end of your ULA term. Let’s have a look at an example of what this means in practice.

An end user with an Unlimited License Agreement for the Oracle Database Enterprise Edition is entitled to deploy the software both on premise and public cloud (Amazon EC2).
At the end of the Unlimited License Agreement, the end user is allowed to certify only the licenses which are deployed on premise.

This results in a situation where the end user would, as per Oracle’s policy document, be allowed to certify only 6+8+4 = 18 Processor licenses, while there are an additional 4 + 2 + 8 = 14 Processor licenses deployed on Amazon cloud. This means the end user is non-compliant for 14 Processor licenses upon certification of the ULA. Since the Oracle programs are deployed on the public cloud environment, this creates a commercial momentum for Oracle to have the end user buy additional licenses.

What solutions do you have?

Many end users do not realize that this policy document exists and what it states. Usually, realization comes at the end of the ULA, when Oracle makes them aware of it if they want to certify their ULA. It is understandable that end users don’t realize this, since they believe they have an UNLIMITED license agreement. Now how can you resolve this?

In case you entered into an ULA already and did not negotiate non-standard terms and conditions in your agreement to upfront resolve such situation, the only option you have is to start a commercial discussion with Oracle. In such discussion, you should realize that this “Licensing Oracle Software in the Cloud Computing Environment” policy document states (in the footer): “This document is for educational purposes only and provides guidelines regarding Oracle’s policies. It may not be incorporated into any contract and does not constitute a contract or a commitment to any specific terms”.

As a first step you would therefore need to validate in your own ULA if such language has or has not been contractually agreed. If you contractually agreed to this situation, you most likely will only have the option to commercially negotiate a new ULA with Oracle. If you contractually did not agree on this situation, you could take the position that you will need to certify all the physical cores of all the physical machines that are part of the Amazon datacenter(s) on which the virtual machines are hosted, resulting in 100.000’s of Processor licenses to be certified. This since the only basis for counting the required number of licenses is the contractually agreed Processor license metric definition. In this situation, Oracle will typically state that a settlement between both parties needs to be agreed upon to normalize the business relationship for the future. Such settlement results in an amendment to your license agreement which specifies the number of licenses that need to be counted as being deployed in Amazon and/or Azure for certification. As per Oracle’s current policy this means counting two vCPUs as equivalent to one Oracle Processor license if hyper-threading is enabled and counting one vCPU as equivalent to one Oracle Processor license if hyper-threading is not enabled.

In case you did not enter into an Unlimited License Agreement already and you are planning to deploy the Oracle programs on a public cloud, it is recommended to negotiate non-standard language in your agreement.

This non-standard language should make sure that you are allowed to:

a) deploy the Oracle programs on public cloud environments
b) count and certify the number of virtual cores or vCPUs into Processor licenses on which the Oracle programs are deployed against an agreed counting methodology at the end of the ULA (e.g. counting two vCPUs as equivalent to one Oracle Processor license if hyper-threading is enabled, and counting one vCPU as equivalent to one Oracle Processor license if hyper-threading is not enabled)
c) deploy your certified Oracle programs on both public cloud environment(s) and on your on premises environment post ULA certification. As a standard the licenses deployed and certified in the public cloud are restricted to public cloud environments only.

Oracle is usually willing to grant such language if you ask for it, but will require you to include only the daily average of the number of Processors on which the Oracle programs are installed and running on your cloud environment for a predefined number of days prior to the end of your ULA.

Although many end users are under the impression that they won’t have any compliance issues because they have a ULA in place, they may be wrong when they are moving from their on premises environments to (public) cloud environments. Having a complete and accurate understanding of what such a transformation means for your organization is important to define the appropriate strategy during and at the end of the ULA. Our recommendation is to perform regular internal reviews to be prepared for your ULA certification/renewal, to identify any issues upfront and to engage with an expert licensing firm to determine the options. In case you would like to know more about our ULA Services, have a look on our website and don’t hesitate to reach out to us.

Read also:

The most common clauses included in Oracle’s ULA (II)

The most common clauses included in Oracle’s ULA (I)

Oracle’s ULA – An introduction

This article was published on 25-03-2019