Ok, we’ll admit it. We like to encourage a healthy skepticism of Oracle Unlimited Licensing Agreements (ULAs) here at LicenseFortress, but we’re completely willing to admit that there are scenarios where adopting a ULA makes great sense.
But, try as we might, we haven’t been able to identify a scenario for which adopting an Oracle Perpetual Unlimited Licensing Agreement (PULA) would be a good call.
In short, it’s a very expensive financing trick that might make anyone who cares only about the bottom line happy, but likely few others. We also don’t think it’s a stretch to say that a PULA is a bad investment.
A little background: The Oracle PULA came on the market over the last decade, and this arrangement has been becoming more prevalent over the last few years. The argument Oracle uses to sell PULAs is that they’re a good way for larger businesses that know they’re going to continue using Oracle licensing agreements to formalize their long-term relationship with Oracle.
But there are a few reasons why a smart IT director should balk at this recommendation.
Perpetual Anticipation
An ideal case for a company that would benefit from adopting an Oracle ULA is a growing company that has a specific project they could incorporate the ULA into. The project would last about the same amount of time as the ULA and enables use of the Oracle products included to grow that project. Ideally, this agreement would also encourage your organization to use the resources available to them under the ULA to gain expert knowledge of the Oracle products covered under the organization’s ULA.
But it’s hard to find a specific use or project to attach a PULA to, as projects are not perpetual. And, as disappointing as it is to hear, corporate growth is also rarely perpetual.
So, what’s the real appeal here? Many companies with a PULA are using it as a financing trick. If the organization was going to pay $3 million for a ULA over the coming three years, Oracle simply charges you annually for the amount you would have paid rather than a larger sum upfront, like in a standard ULA – in this example case, the organization would be charged $1 million annually instead of $3 million in the first year of the agreement.
While this looks better on the corporate bottom line, it doesn’t really save your company money – it just spreads the fees out.
No Exit
But we haven’t even got started on the greatest downside of a PULA – these agreements can get a bit Kafkaesque.
Let’s say everything is cruising along just fine, but for whatever reason, your organization decides to leave the PULA. This could happen for a number of reasons – maybe your need for Oracle products isn’t as great as you thought it was, or you learn that a different vendor’s products fit the organization’s needs better. In any case, you decide this isn’t right for you.
When an organization chooses to leave its PULA, it immediately loses Oracle support and the right to run the Oracle products it had been using. This means that the entire investment that went into the PULA and maintaining it, likely worth millions of dollars, is all for naught, pretty much overnight.
Ouch.
When deciding to enter into any licensing agreement with Oracle, it’s important to decide whether the investment will benefit your IT shop. A PULA creates few advantages that cannot be replicated in a well-managed IT shop with a strong pay-as-you-go arrangement or, barring that, a regular ULA.
So, when considering a PULA, ask yourself: Does this really benefit me, or does this just look good on the bottom line? And is a PULA really necessary, or can I accomplish a similar outcome using a different Oracle agreement? Your answer may save your organization millions of dollars – or the equivalent in frustration.
Want to know more about Oracle PULAs? Contact us to discuss your options.
