Most people like the sound of the word “unlimited.” Unlimited soup, salad and breadsticks at a certain well-known Italian chain restaurant; unlimited free refills; the all-you-can-eat buffet.
The appeal offered by Unlimited Licensing Agreements – or ULAs – is understandable. For a rapidly scaling but generally stable company that needs to offer many seats to an ever-growing cast of employees, a ULA might even be a good bet. But let’s look at some of the many instances where going the a la carte route might save money, not to mention headaches.
The Company is Likely to be Acquired
If you’re at the helm of a company and you’d rather sell your company to Google than be the next Google (we don’t judge), a ULA makes no sense. Ditto for tech leaders who think their company may be on the market – it’ll uncomplicate your job if you avoid the ULA route. Once the company gets acquired by a different organization, the software will no longer be covered by the ULA, which will also be non-refundable. In the wake of an acquisition, untangling your Oracle licensing agreement will be a massive headache for you and other surviving employees to tackle. Save yourself the pain by not signing a ULA.
….Or Make Some Acquisitions
Same rules go for companies that plan to acquire other organizations – employees from the new company usually don’t have the right to use software provided under a ULA. Make sure prior to issuing seats to your newly acquired employees that they have the right to use your Oracle account – there’s nothing worse than finding out after the fact that these workers weren’t covered under the ULA and you now owe Oracle the cost-of-the-feature-plus-30% for annual maintenance for your error retroactively.
Also, geographical restrictions will apply to any ULA, so if your organization moves, keep that in mind, too.
There’s Downsizing in Your Future
Sometimes, if you want a company to survive, you have to shave off a few employees – or a few hundred. If you can be relatively certain your company is stable or growing and will be for the next three years (or however long your ULA specifies), a ULA is likely a reasonable gamble – the pricing is based on the number of seats you’ll need now, and if you grow, you won’t get charged more. However, if the number of seats drops, your price doesn’t – and you lose.
You Can’t Successfully Log Internal Use
Going back to the above buffet analogies, ULAs are often considered an “all you can eat” option for Oracle product use, but a closer analogy would be a buffet where, after hours of dining and multiple drinks, you have to account for every crumb you ate right before leaving the restaurant – or face hefty fees. Your organization must be able to provide records for every seat provided or privilege issued. If there’s a high likelihood that won’t be doable – high turnover, internal disorganization, or poor communication between departments, avoid ULAs. This is a very common problem clients report having experienced prior to working with LicenseFortress. Other sources have also reported this as a major pitfall many companies fall into, too. Ironically, Oracle offers these agreements as a remedy for license compliance issues, but anecdotally, some say ULAs cause more compliance issues than they solve. Either way, not being able to account for what was used is a surefire way to kill any price efficiencies you might have had in the first place.
It’s worth noting that when an organization leaves a ULA, they are required to certify out as part of their exit. During this process, Oracle licenses will be counted differently than how they will after the company is no longer under a ULA. Unfortunately, it isn’t unheard of for a former Oracle ULA customer to be audited by Oracle License Management Services suspiciously soon after the ULA ends and for the company to be found non-compliant.
You’re Not in Position to Negotiate
Salespeople have a way of making anyone feel like everything in their bundle is 100% mandatory, whether it suits their particular IT shop or not, and like a decision needs to be made on-the-spot. Should you choose to go the ULA route, you should be unrushed in your decision, with plenty of time to let an Oracle licensing expert review your potential agreement, read the fine print with you, and prevent any potential issues. Unfortunately, a common mistake organizations make is to accept the boilerplate agreement or package Oracle hands them without question. At very least, have the agreement reviewed by a licensing expert such as LicenseFortress before signing anything – and remember, Oracle can customize any agreement, so there’s no need to settle for what they’re offering you unless you’re 100% comfortable with it.
For some Oracle clients, ULAs can be an efficiency creating, cost-saving option that should be considered – but make sure what Oracle is offering your company is the right fit first. You can always walk away from the negotiating table, but you can’t walk away from a signed contract.