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Are you sure you’re compliant with your Oracle ULA in the Public Cloud?

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Approximately 10 years ago, Oracle Corporation started to sell a type of agreement known as the “Unlimited License Agreement” (ULA). An Unlimited License Agreement provides an organisation the right to unlimited deployments of a certain range of Oracle programs, for a limited period of time. More details on how “unlimited” these license agreements actually are and how they actually work can be found here.

At the time ULAs were introduced, the “public cloud” was not a concept many companies were actually thinking of. In today’s world, this drastically changed and many organizations are considering moving their on-premises programs to public cloud providers such as Amazon AWS, Amazon RDS or Microsoft Azure.

However, many organisations with a ULA are confused about how they can or cannot deploy the Oracle programs license by a ULA in a public cloud. The general perception is “I have an unlimited agreement, so I can deploy it everywhere”. This is true, but only to a certain extent. Let us clarify in more detail what you should be aware of.

Unlimited Deployment Rights

Every customer that has a ULA will have an Unlimited Deployment Right clause in its agreement stating that as long as you continue to pay your license and support fees, you have the right to use the programs (as included in your ULA contract) across an unlimited number of Processors or Users. As such, it is correct that you can deploy the Oracle programs on public cloud providers such as Amazon AWS, Amazon RDS and Microsoft Azure. So far so good.

Certification Process

What happens at the end of the ULA? At the end of the ULA, customers have the choice to either renew the ULA or to “certify” the ULA.

Many end users believe that in case of a certification, they will end up (assuming the deployed programs are counted correctly) in a “compliant” situation. But – according to Oracle – this is not the case if you deploy the Oracle programs on a public cloud provider such as Amazon AWS, Amazon RDS or Microsoft Azure. Why? Oracle will refer to its “Licensing Oracle Software in the Cloud Computing Environment” policy document as published online which states:

“Licenses acquired under unlimited license agreements (ULAs) may be used in Authorized Cloud Environments, but customers may not include those licenses in the certification at the end of the ULA term.”In other words, Oracle allows you to deploy the Oracle programs on a public cloud provider BUT does not allow you to certify such deployment.

Let’s look at an example.

You have an Unlimited License Agreement which expires in May 2018. You deploy 300 Processors of Oracle Database Enterprise Edition on-premises and you are using 200 vCPUs in Amazon AWS on which Oracle Database Enterprise Edition is running. In this scenario you may expect that you could certify 300 Processors for your on-premises deployments and 100 Processors for your public cloud deployments.

Oracle, however, will not agree with you – you will only be allowed to certify 300 Processors for your on-premises deployment, as per Oracle’s policy. Those 200 vCPUs running in Amazon AWS? You are not entitled to certify these licenses so, if you continue with the same scenario, you will become non-compliant as of your certification date.

How can you resolve this? Oracle will be more than willing to sell you another 100 Processor licenses (as one processor license covers 2 Amazon AWS vCPUs) of Oracle Database Enterprise Edition at $47,500 per Processor (list price) plus support at $10,450 per Processor (list price).

Many people may say this “Licensing Oracle Software in the Cloud Computing Environment” policy document is ‘for educational purposes” and so not contractually binding – and that is absolutely true, but don’t be fooled. Oracle includes in its newer Unlimited License agreements (as of October/November 2017), additional language which explicitly states that Oracle programs installed and running in a public cloud CANNOT be included in your certified deployment numbers. So, for all newer ULAs, this language will become part of your agreement and is no longer only part of an online policy document. In addition, Oracle put through another change in these newer ULAs: it includes language that you as an end user will provide Oracle all additional information and assistance as reasonably may be requested to validate the information contained in your ULA certification.

In other words, you agree that Oracle will conduct an audit. But will their scripts only audit the specific Oracle programs you want to certify? Or will they provide its so-called “LMS Collection Tool” that will collect all the deployment and usage information for any and all Oracle programs within your infrastructure? For sure the latter, trying to determine any compliance issue which can be commercially leveraged for another ULA or Cloud transaction.

Conclusion

As with almost any license agreement; the devil is in the details. If you enter into an Oracle Unlimited License Agreement and you want to deploy (and certify) the Oracle programs in Public Cloud providers such as Amazon AWS, RDS or Microsoft Azure; make sure that you negotiate specific non-standard terms and conditions in your agreements, to ensure you can leverage the full potential of your investments. Make sure that you have a clear view of what you sign up for and before doing so, have a clear view of what your current and future deployment of Oracle programs is going to look like, so that you can act and make informed business decisions.