There are contracts, called Enterprise License Agreement or Unlimited License Agreement, depending on the software vendor’s fantasy. These contracts give you rights to exceed the usual software vendor license rules and use his software more freely, but within the limitations written in the contract. This can be, for instance, unlimited use of specific software during specific period of time, or ability to use the software until reached a “cap” specified in contract.
Some more details…
For big companies unlimited agreements can be a good option because it is difficult to imagine how many millions in USD would company spent if purchasing based on the regular licensing rules. Problems begin when this contract is going to expire. Of course, vendors want them to be renewed. But is it really beneficial for the customers? To answer this question, we need to understand deeply the idea and conditions of the contract.
Typically, the Unlimited License Agreement (for instance from Oracle) gives you right to increase your amount of software use during the period defined in the contract, which can be 1, 2, 3 or even more years. There are other restrictions, related to products or other limitations specified in the contract. After the ULA contract expiration the customer has to pass the “certification” procedure, described in the contract. It seems to be simple, but in practice it means that the customer will provide Oracle with full structure of the programs use, as soon as Oracle wants to “verify the usage”. And, of course, there are risks – if the usage exceeds the limitations written in the contract, the customer will pay for this according the standard price, which can be huge money.
For sure, customers mostly do not want to pass through the certification if there is such a risk. Most vendors, including Oracle, offer another option – to renew the ULA contract for next 1, 2, 3 or more years. Of course, the support is also to be renewed, adding percentage to the annual payments to the budget.
Practical example
In my practice sometimes I met situations when customers were struggling for the ULA certification and more often situations – renewals of the ULAs. In the picture below it is seen when one of my customers experienced all the stadia of this:
1. Started in 2010 the customer concluded ULA
2. In 2013 tried to certify it, but met a resistance from Oracle side because Oracle found many inconsistencies that interpreted as “unlicensed use”
3. Between 2013 and 2015 the customer tried to struggle with Oracle, but couldn’t prove its position since didn’t know how to “play on Oracle’s field”
4. In 2016 concluded a new ULA, doubled the annual payments
5. In 2019 concluded a new ULA, again, increasing the payments
6. In 2021, looking the way to decrease payments, the customer invested in license management, reduced the payments twice and built a strategy for further reduction
Now, for the better understanding, let us summarize the payments in the following table:
Conclusions
First of all, it is evident that license management is important because it allows to reduce payments by taking the control all over the usage. Vendor management is not less important since allows to build strategy of risk mitigation, budget planning and understanding of contract onditions.
Secondly, let us make some practical conclusions:
1. ULA is a good choice what you plan to grow in the term of the contract or when you plan to extend your usage and reach big numbers of use.
2. According to the table above, it is beneficial only the first ULA (see the green numbers), other ULAs is a waste of money, if you don’t plan to grow in numbers dramatically.
Sincerely yours,
Andrey
*the header image for the article is generated by Midjourney
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