Oracle’s ULA – An introduction
Approximately 15 years ago, Oracle Corporation introduced its Unlimited License Agreement (ULA). This type of license agreement was designed for larger enterprises that don’t want to have to count the required number of licenses on an ongoing basis and for enterprises that want to have clarity upfront on their net license and support fees for the coming years. Since its introduction, many end user organizations entered into such an agreement. Reasons why end users entered into a ULA vary. Maybe Oracle proposed a ULA as a commercial resolution for an identified large non-compliance resulting from an audit. Or an enterprise expected to require a large amount of additional licenses for the deployment of Oracle and wanted to have upfront clarity on the associated license and support costs. There can be many other reasons for enterprises to enter into a ULA.
Since you’re now past the introduction, we’ll assume you already have entered or consider entering into a ULA for your organization. The first thing you should be aware of is that the contractual document through which you obtain the Unlimited Deployment Rights is actually an ordering document. This ordering document is at all times referring to a specific license agreement called Oracle Master Agreement (OMA). The license agreement itself specifies the general terms and conditions that are applicable for any order of licenses, support, hardware and/or cloud that you may execute against this agreement. Think for example about the audit rights applicable to the programs included in your ULA ordering document. It is therefore important to maintain and administer the ULA ordering document and the associated license agreement to obtain a complete and accurate picture of the rights and obligations you contractually agreed upon. But what exactly is a ULA?
Although the name suggests differently, a ULA is not completely unlimited. The limitations of the ULA are governed by the clauses included. Whilst the starting point will usually be the Oracle standard ULA with standard clauses, it is possible to agree to include deviations from the standard and/or non-standard language. This results in specific terms and conditions between your own organization and Oracle. These may include clauses to cap the support maintenance increase during the term of the ULA (also known as Technical Support Cap) which as a standard would otherwise increase with 3-4% year over year, clauses to allow usage of the ULA programs up and until a certain threshold after a merger or acquisition (e.g. maximum of 10% growth in terms of employees and/or revenue), clauses that allow a divested entity to make use of the ULA programs for a grace period of 6-12 months, a ULA Certification floor to guarantee a minimum amount of licenses upon certification, and many more.
An Unlimited License Agreement may be a very valuable solution for your enterprise at a certain moment in time. The downside of a ULA is the “lock-in” from a technical support perspective, since you lose the possibility to terminate the support maintenance for a license if and when such license is no longer required. Before entering into an Unlimited License Agreement, it is important to have a clear view of all the contractual clauses that are part of the agreement. Each individual organization should evaluate if the pros of an Unlimited License Agreement outweigh the cons for its specific situation. In the following articles we will cover the most common clauses that you will find in almost any Unlimited License Agreement.
This article was published on 04-03-2019
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.