Limitations of Oracle Unlimited License Agreements (ULAs)

After many weeks of focusing on licensing issues we encounter on a daily basis regarding Oracle’s E-business Suite, at B-lay we are happy to kick off the new hot topic of ULAs or Unlimited License Agreements.

Many enterprises enter into a ULA from Oracle Corporation, believing there is no risk involved. But although ULAs are designed to alleviate several worries of software license management, you can still face significant financial, legal, and operational risks.

An Oracle Unlimited License Agreement (ULA) is limited to a number of legal entities. These are typically your majority owned subsidiaries, and sometimes also minority owned subsidiaries, joint ventures or legal entities where you have voting rights. This limitation is described in the “Customer Definition” section of the agreement.

During the ULA certification process, the deployment and usage of the Oracle programs need to be assessed for all legal entities included in the Customer Definition in order to obtain a complete and accurate overview of the quantity of the then-current deployment of Oracle programs. This will be the number of licenses on which the ULA will be certified. Time pressure or misunderstanding of the agreement often lead to only the most important entities being included in the ULA certification. Immediately after certification, 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.

ULAs are also limited to a number of specified software programs. Often, organizations think that under a ULA all Oracle software programs or an entire group (e.g. Oracle Database Programs) can be deployed in an unlimited capacity. This is not true: only the programs specified in the agreement can be used in unlimited capacity.

For instance, if you own a ULA for Oracle Database Enterprise Edition, Partitioning, Diagnostics Pack and Tuning Pack, then make sure that everyone in the organization knows that the 20 other functionalities, which were shipped/downloaded with the Oracle Database Enterprise Edition (e.g. database options and database management packs), may not be used without explicit licensing!

This includes legal, purchasing, sourcing, database administrators, business application managers, anyone you outsource to, and many others. If users don’t know which programs and functionalities your agreement covers, and you don’t perform regular baselines to assess your current deployment, you can quickly end up with contract breach.

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.