Introduction
The Pivotal Role of Rapid Response
Companies inevitably face challenges that test their resilience and adaptability in a world driven by rapid market dynamics. However, how they respond during difficult times determines their eventual resurgence. In such circumstances, the speed of response is often the game-changer. In this case study, we look at the role LicenseFortress played in helping a massive technology company quickly deal with an expensive Oracle Unlimited License Agreement.
The client is a US-based technology organization that provides cloud and workflow services. The company has revenue in the billions of dollars, employs more than 8,000 people, and does business in over 175 countries around the globe
Customer Challenges
Facing Economic Turbulence and a Ticking Clock
In this case, the client was no stranger to tough economic times. In the past, the client company was able to lift itself out of bankruptcy. But, due to unforeseen market forces, there was a downturn in the company’s fortunes once again. Moving into this economic hard time, the company did a significant layoff, which wasn’t enough to stem the monetary bleeding.
One of the significant expenses that needed to be managed in this economic crunch was the massive cost of their Oracle Unlimited License Agreement (ULA).
A ULA is a customized contract between Oracle and a client company that allows that company to use all the Oracle products defined within their agreement. ULAs typically last two to three years. At the end of a ULA, the client company must choose whether to enter another ULA or “certify out” of the agreement. To “certify out”, a company must be able to declare what Oracle software is installed and running within the organization and the quantity of each product being certified (number of licenses and seats).
Related: ULA 101
How are licenses counted inside an active Oracle ULA is very different from what triggers the need for an additional license outside an active Oracle ULA. Many customers are surprised to learn that immediately after “certifying out” of an Oracle ULA, they immediately fall out of software compliance. It’s not uncommon for Oracle to audit customers within twelve to twenty-four months after a ULA exit.
The Oracle products installed and running, the quantity of each, along with a certification letter, are submitted to Oracle to “certify out” of a ULA and obtain perpetual licenses.
As part of their deliberations, the client engaged the services of one of the world’s largest providers of third-party Oracle support. To save money and help preserve the company, they made the brave (and wise) decision for them not to renew their Oracle ULA and certify out of that agreement.
In comparison to remaining within an Oracle ULA, the cost savings are substantial for customers who are willing to turn to third-party support option. Oracle customers who switch can save up to 50% on their ongoing support bill. Customers experience expenditure reductions up to 70% or higher when you factor in that the customer no longer doing major upgrades.
When an organization has infrastructure encircling the globe, as did the technology company in this case study, certifying out of a ULA is usually best planned and executed over twelve to eighteen months. But the client didn’t have the luxury of time. Their ULA was up for renewal in just six months.
The process for such a large organization to certify out of an Oracle ULA is a complex one. In this case, the challenge was further complicated by staff reductions within the client organization due to the necessary massive layoff. The lack of staffing resulted in a scenario where no one was sure where all the databases and middleware were deployed.
The clock was running out for the company, and they needed to move quickly. They required the services of a firm that could help them determine and document their Oracle deployments around the world, navigate through a very complex Oracle ULA, and do it all within six months.
Another looming concern? The strong likelihood of an Oracle audit, given their decision to depart from the ULA.
Solution
Swift Action with the ArxPlatform
The client company needed to move fast. Using the LicenseFortress proprietary Software Asset Management (SAM) tool, the ArxPlatform, the team was able to validate the client’s worldwide Oracle software deployments in record time. As the technical team began the process of documenting all the client’s Oracle software use for the certification, the legal team stepped in to review both the current ULA and proposed Oracle perpetual license.
LicenseFortress started the work in January and by mid-May had certified the client out of their Oracle ULA. Throughout this process, we helped the client understand their Effective License Position (ELP) post ULA exit, which, in turn, helped them save nearly $10M over three years. During a period where fiscal challenges seemed to plague the client, LicenseFortress continued to work with them to help them avoid the looming ULA renewal fees.
Why the Client Chose to Work with LicenseFortress
- Trust – The client gained confidence after witnessing the deep knowledge and insights shared by LicenseFortress’ founder at an Oracle event.
- Reputation – LicenseFortress’ NPS score tops industry standards at 86.5%
- Speed – The client needed to move quickly, and LicenseFortress was able to deliver.
- Baked-in Legal – They liked that a legal review of their very complex ULA was included in the process.
- Guarantee – LicenseFortress stands out by offering a financial assurance that rivals can’t match.
- Audit Protection – Because an Oracle audit was foreseeable, they engaged LicenseFortress for ongoing services that include audit support.
Lesson Learned
Proactive ULA Review
This case study emphasizes the importance of having a ULA reviewed proactively at least a year in advance of the renewal date. Sometimes a ULA can be a good thing for a company. In other scenarios, a ULA can be costly and detrimental. LicenseFortress works with companies large and small to help them determine their precise Oracle usage, providing them with the pros and cons of renewing or certifying out of their current ULA.
Results
Avoiding $10M in Oracle Fees and Scaling Efficiently
Today, the client is on a stable financial footing and growing again. They managed to avoid nearly $10M in unnecessary Oracle fees by certifying out of their ULA and are now equipped to scale their Oracle software use predictably without the burden of a ULA.
