As we head towards the last hurrah of the Oracle fiscal, customers are assessing the option of buying, renewing, or exiting an Unlimited License Agreement (ULA). Over the last 10 years I have heard customers, consultants and SAM experts decrying Oracle ULAs. I hold my hands up and count myself among those naysayers at times!
My experience of the last few years has led me to reflect on the value of a ULA. Oracle is still offering ULAs as part of their sales strategy and on occasions Perpetual ULA (PULA). A mysterious beast that appeared 5 years ago is now seems to be surfacing on a regular basis.
So why did we all hate the ULA? Even without much reflection one could suggest much angst was often driven by Procurement Teams.
The continued support fees locked to a single CSI made it impossible to reduce annual costs and hit Procurement KPIs.
But balance this against the value gained. Database sites rarely decrease. CPU cores continue to increase; hence the license requirement increase. The customer usually exited a ULA with an increased license declaration. Thus, the effective product cost and support would be tremendous value. Sometimes customers could be looking at effective discount rates in the high 90%. Has the disconnect between Procurement, IT and the business failed to recognise how much Oracle has given away? And importantly, how much value the business has gained.
Oracle began to recognise this loss of value in early days, as the initial ULA customers exited declaring huge estates. It represented to Oracle a great loss of product sale, and of course, of most value to Oracle, a loss in continued support stream value. Oracle salespeople were made to stand before management and make a strong “justification case” to sell a ULA. I would guess this process may have diminished in recent years. Any money is good money for on-premise software?
In the US and EMEA I have seen customers renew ULAs and gain massive value compared to the initial estimate of usage. Let us consider VMware. All major Oracle users know of the “VMware issue”. Customers with ULAs and VMware 6.x, are laughing all the way to the bank.
For sure there are still downsides to ULAs. Redundant and legacy products where the ULA may not have been constructed properly. But most customers are now astute enough that they can lever the downside with some good negotiating.
I cannot bring myself to say, “I love ULAs”. But in hindsight, maybe they were not all bad. If your organisation is struggling to get to grips with a ULA, I would welcome a conversation.