Oracle Contract Negotiation – Case Study: How a Tech Firm Exited Its ULA and Saved $8M
Oracle Contract Negotiation – Case Study: How a Tech Firm Exited Its ULA and Saved $8M
A global technology services company in Asia-Pacific successfully exited an expiring Oracle Unlimited License Agreement (ULA) instead of renewing, saving millions in costs. Facing Oracle’s pressure to renew the 5-year ULA at a high price, the company chose to certify out all its usage.
By meticulously auditing deployments and maximizing usage before ULA expiry, the firm achieved a smooth certification.
The result: it secured all needed Oracle licenses in perpetuity, avoided an $8 million renewal expense, and emerged fully compliant without audit issues.
Client Background
- Industry & Region: Technology services provider, Asia-Pacific (operating globally).
- Oracle ULA Details: A 5-year Oracle ULA covering Oracle Database Enterprise Edition and WebLogic Server, nearing its end. The company had grown via acquisitions during the ULA, adding Oracle deployments outside the ULA’s original scope.
Challenge
- M&A and Scope Creep: New Oracle systems from acquired companies were not initially covered by the ULA, raising compliance questions. The IT landscape was distributed across multiple teams and lacked a centralized Oracle inventory management system. Any undiscovered databases or middleware instances could derail the certification if left uncounted.
- Oracle’s Renewal Push: Oracle’s reps strongly advocated a ULA renewal, warning that exiting would be “dangerous.” The renewal quote was steep, and the CFO was keen to cut costs. The company wanted to avoid renewing unless absolutely necessary.
- Complex Environment: Some Oracle workloads ran on VMware virtualization and in public cloud instances. Oracle’s rules in these environments are tricky; without careful management, these could become compliance traps post-ULA. The challenge was to ensure that every Oracle instance was properly licensed upon exit.
Approach
- Internal License Audit: The company conducted a comprehensive internal audit of all Oracle deployments across the enterprise. This effort catalogued every Oracle Database and WebLogic server in use (including those from acquisitions), providing a clear baseline of what needed to be licensed at ULA’s end.
- Remediation of Non-ULA Usage: The audit identified a few Oracle products deployed outside the ULA’s terms (e.g., an Oracle Analytics server from an acquired subsidiary). The team either retired or migrated those instances off Oracle or purchased small licenses to cover them in advance. They reconfigured Oracle on VMware (pinning it to specific hosts to avoid licensing entire clusters) and even temporarily moved some Oracle workloads from the cloud back on-premises, ensuring all usage aligned with Oracle’s licensing rules at the point of certification.
- Maximizing ULA Benefits: In the final ULA months, the company strategically scaled up certain Oracle deployments to secure higher entitlements before the exit. They added Oracle Database instances where possible – since, under the ULA, these incurred no extra cost – so that when certifying, they could count a larger number of licenses to keep them at no charge post-ULA.
- Certification & Oracle Coordination: Armed with a complete usage count, the company formally notified Oracle of its intent to certify out. They prepared detailed documentation of all deployments for the certification letter. Oracle ultimately accepted the certification counts. The ULA ended on schedule, with Oracle confirming the final perpetual licenses in writing. This documentation ensured the exit was clear and final.
Outcome & Results
- Successful ULA Exit: The firm exited the ULA on time and on good terms. It obtained perpetual licenses for all its current usage with no penalty. Approximately 15,000 Oracle Database licenses and 5,000 WebLogic licenses were locked in via certification, representing a huge value the company now owns outright.
- No Compliance Exposure: Every Oracle deployment was accounted for and properly licensed going forward. No post-ULA audit occurred – the certification was complete and accurate, leaving Oracle no grounds to challenge. By addressing out-of-scope usage beforehand, the company eliminated potential audit liability (estimated at over $5 million).
- Major Cost Savings: By avoiding renewal, the company saved an estimated $8 million over three years in ULA fees and support costs. It also immediately trimmed ongoing costs by terminating support for unused licenses. The firm is now free to explore third-party support for some systems to save even more.
- Improved License Governance: The ULA exit process improved the company’s internal software asset management. New tracking tools and procedures now maintain a single Oracle license inventory, ensuring the company only pays for what it truly uses.
Key Takeaways
- Prepare Meticulously to Exit a ULA: Certifying out of a ULA requires a full inventory of usage. Invest time in discovering all deployments (including acquisitions) so nothing is left unlicensed.
- Remediate & Optimize Beforehand: Address any out-of-scope products (retire or license them) and maximize use of the ULA’s unlimited rights before it ends. This company’s strategy of expanding deployments before exit increased the licenses it retained.
- Push Back Against Renewal Pressure: Don’t Renew Out of Fear. With data and discipline, you can certify out and avoid hefty renewal costs. Oracle will warn of risks – counter with a solid exit plan.
- Documentation is Key: Provide Oracle with clear, defensible documentation of usage at the time of certification. A well-documented exit can prevent audit disputes later. Get Oracle’s written confirmation of final entitlements.
- Post-ULA, Optimize Costs: Once you exit, review your license and support needs. This tech firm dropped unnecessary support and explored third-party options, leveraging the freedom of owning its licenses outright.
Read about our Oracle Contract Negotiation Service.
