ULAs: impact of acquisitions & divestitures on legal and financial risk

During the certification process of Oracle Unlimited Licenses, the deployment and usage of the software programs involved need to be assessed for all legal entities included in the Customer Definition, in order to obtain a complete and accurate overview. This will determine the number of licenses for which your ULA will be certified.

Acquisitions

If you acquire legal entities during the term of your ULA, these do not automatically obtain the right to deploy the software programs included in the ULA. In case the acquisition results in an increase of employees or revenue which is less then 10%, you can request Oracle to add the entities to your agreement. Oracle normally will grant this but the deal must of course be approved. Oracle then requires you to “roll-in” the existing licenses of the acquired entity, so the corresponding support fees are added to the Total Support Stream. However, if Oracle does not approve the extension, the acquired entity must license the deployment of the software programs separately.

Divestitures

If you decide to divest a legal entity during the term of your ULA, the entity is normally entitled to continue using the unlimited deployment rights for another 6 months, provided this does not exceed the term of the agreement. After that time period, the divested entity would need to license the deployment of the software programs by itself. As an end user you need to make sure that this “grace period” is explicitly stated in your agreement. If this is not the case, the entity needs to own licenses as of the date it was divested, since it is no longer under your “control.”

Avoid Any Legal and Financial Risk

Time pressure or misunderstanding of the agreement often leads to only the most important corporate entities being included in the ULA certification. Immediately after certification, the legal entities that were not included in the process don’t have any usage rights and are deploying software without a license. Operating software programs without proper licenses leads to huge legal and financial noncompliance risks.