Oracle ULAs: capped or flexible use license agreements

In our articles of the last few weeks, we addressed some essentials around ULAs including:  generic limitations; the financial impact you may face if you incorrectly count the number of processors at the end of the ULA; licensing rules and definitions you need to follow when you are using virtualization technologies like VMware vSphere, and IBM LPAR; and the implications of mergers and acquisitions for enterprises having an ULA agreement in place. Some of our readers raised questions about “Capped ULAs” and “Flexible Use License Agreements.” Therefore this article aims to explain the difference between Capped or Flexible Use, which is in essence the same, and ULAs themselves.

An Unlimited License Agreement provides end users the right to deploy and operate a limited number of Oracle software programs (e.g. Oracle Database Enterprise Edition, Diagnostics Pack and Tuning Pack) for a limited period of time (typically 2, 3 or 4 years) in a unlimited capacity (e.g. for an unlimited number of processors). At the end of the term, the end user must certify the amount of processors as per Oracle’s processor definition on which the different Unlimited Deployment Programs are installed AND running.

Unlimited but also Capped, that’s odd!

A special Unlimited License Agreement type is a so-called “Capped ULA.” This may sound strange since how can something “Unlimited” be “Capped” too? In the case of an Oracle ULA “Capped” means that end users have the right to make use of a limited number of Oracle software programs for a limited period of time, and also in a limited or “Capped” capacity: e.g. up to 100 processors for Oracle Database Enterprise Edition, 75 processors for Diagnostics Pack and 75 processors for Tuning Pack.

So, during the term of the agreement the number of processors is restricted to the “Capped” figure. If at any time (let’s say after 2 years) you are exceeding the capped cappacity (let’s say with a total usage of 160 processors for Oracle Database Enterprise Edition), then from that moment on you would need to purchase additional licenses: 60 in this example. At the end of the term, the end user must certify the amount of processors (as per Oracle’s processor definition) on which the different “Capped” ULAs are installed AND running.

Below or above the Cap figure: what to do?

Should the then current deployment be below the contractual agreed “Cap” (e.g. 60 processors for Oracle Database Enterprise Edition, Diagnostics Pack and Tuning Pack), you would have the right to set the total amount to 60 processor licenses “Perpetual.” Should however the deployment have risen above the contractual agreed “Cap” (e.g. 180 Processors Oracle Database Enterprise Edition, Diagnostics Pack and Tuning Pack), you would of course be allowed the contractually agreed “Capped” number of processors (in this case 100 for Processors Oracle Database Enterprise Edition, 75 processors for Diagnostics Pack and 75 processors for Tuning Pack) and would be required to buy additional licenses for the difference of respectively 80, 105, and 105 processors.
A similar kind of terms Oracle used in the past for a so called “Flexible Use Agreement,” which is in essence the same as a “Capped ULA.”

Richard is one of the managing partners at B-lay. He started to work in the license management industry in 2004 and worked for almost 10 years at Oracle as regional director of compliance. He uses his knowledge of enterprise software vendors (such as Oracle, SAP, IBM and Microsoft) to educate, equip and enable software end users in their challenges regarding proper software license management. Richard holds a master’s degree in IT, from University of Amsterdam in the Netherlands.