Let’s say you have a ULA for

-Oracle Database Enterprise Edition
-Partitioning
-Change Management pack

To get the ULA in the first place, you paid a license fee for the ULA of €3.000.000 NET. The annual support of 22% means an annual fee of €660.000. The support fee you already had prior to the ULA (€340.000) was migrated into the ULA. This means that your annual support is €1.000.000.

You anticipate for 1000 Processor licenses for the Database at the end of the ULA, and 100 Processor licenses of Partitioning. You never started using Change Managment Pack. Your estimation for the number of licenses is based on the Oracle Software Investment Guide, which states that Processor licenses are required for systems where the database is installed and/or running.

At current prices, this means the following:

Support Prices
Database Enterprise Edition: 1000 x €8.248,49 = € 8.248.490
Oracle Partitioning: 100 x €1.996,93 = €199.693
Change Management Pack: € 0

Total support amount: € 8.448.183.  Bottomline: If you will really get this amount of licenses from Oracle, you had an overall discount of approximately 84%.

As a thought: Let’s say prior to the ULA, your €340.000 on existing support were for 300 existing Database Processor licenses. This would mean that the additional deal got you only 700 additional licenses, which puts the 84% into perspective.

In the end Oracle will do the counting and not you.
In section C.1.b (or somewhere around there) your ULA agreements will tell you that at least 30 days prior to the end of your ULA period you and Oracle have to engage in a Certification Process. In general, this means that you’ll receive an audit letter from Oracle months before the end of the ULA, as 30 days is not enough time to complete this exercise to Oracle’s satisfaction. In either case, Oracle will make a full scan of your Oracle software installations. The same section in your agreement also states that you will be certified for the number of Processor licenses on which the Unlimited Deployment Programs are installed and running. Now that’s a different story, because you were anticipating for installed and/or running. Think about Failover . Think about Remote Mirroring scenario’s. Think about Oracle VM’s that are switched off. Think about pre-installed servers that you have in storage in case of hardware failure. Think about developers’ laptops that are shut down. Are they all running? What is installed and what is running in the first place? Could it really be that you end up with 500 Processor licenses and not 1000 as you hoped you would?

Reality check: Also for 500 Processor licenses you’ll end up paying €1.000.000 annual support after the ULA, the same way you would for 1.000 or just 100 or 10.000. That’s the essence of a ULA!

Think what happens the day after your ULA expries: Is that the day when you may only have 500 licenses in place, but are still 500 Processor licenses short (as now you need licenses where the database is installed and/or running?).  Oh, you don’t have a discount schedule in place for additional licenses? Ooops!

When Oracle completed the certification it turned out that you were using some other stuff as well. Let’s take a cheap product, like Tuning Pack and Diagnostics Pack at some €4000.- each. You didn’t know your DBA’s were using it until Oracle found out. So you’re incompliant for € 8000 x 500 = €4.000.000, excluding €880.000 annual support, and a claim for back-support charge for the past two years is lying on your desk. Today is a bad day.

No need to worry, the salesrep calls to help you out. To quietly settle amongst each other you can renew the entire ULA, and add some unlimited use for Oracle Database and Packs and another Oracle product you again end up not using at all. Oh, and Database Standard Edition of course since the wrong installer was used a few times. A bargain for €3.500.000, and a new annual support fee of €1.770.000. Good deal, because otherwise you would have had to pay for Processor licenses without having any discount, right? And with this deal you van even tell your manager that you won’t have to pay for back-support (that is, if you buy an Exadata or two).

You can’t manage what you don’t know! 

A large Oracle Platinum Partner from the Netherlands recently had enough from Oracle auditing their clients. They sent a mailing, warning clients against the audit practices (quotes are freely translated from Dutch):

“Our experience is that in many review reports, big mistakes and incorrect assumptions are being made. As a result, the reviews in general have a negative or very negative outcome.” ….

….”(clients) are told after an audit to buy a (sometimes unjustifiable large)   quantity of licenses from the so-called ‘independent’ LMS partner that has conducted the review, or through an affiliated organization.”

We’ve had many scenario’s where we checked such audit reports, containing no other advice than to ‘commercially settle with the Oracle salesrep within 30 days or else’. Trends shows us that Oracle aims for money (which is fair enough), but even if this means a license overkill for the unprepared client. To the extend where Oracle aims to license testing servers with Processor licenses.

To illustrate: One client had been confronted with a claim of over half a million euro, and after our advice less than 10% remained. This advice took no longer than one day, and we never even visited the client in person. Another client got a claim for over 3 million euro, and only 10% remained in place after one week of our consulting time. We have many examples of larger and smaller audits with results like this. We don’t bring any magic to the table, we just read the client’s agreement and ask the right questions. Is it not surprising that nobody took Oracle to court for attempted theft just yet?

The Partner who sent out this warning is not only a very technical savvy partner, but also staffs experienced Oracle licensing staff. They know what they’re talking about. Without a doubt they risk their Oracle Platinum Partner status by sending this notification out, but probably figured that sometimes you just gotta bite the bullet and do the right thing. Kudos to them.

We primarily operate in Europe, with a focus on the Netherlands and surrounding countries. In this region it’s very evident what is going on. Multiple sources have told us that the several CIO platforms in the region even have initiated workgroups for this specific subject, as Oracle became the most disliked vendor for many CIO’s. If you are one of them we’ll be happy to advice and educate your workgroup and share our experiences an best practices, free of charge.

What is your personal experience about this in your region of the world? Let us know. And if are in trouble after such an audit, consult us for  a little advice. It is free for the asking, we’ll be glad to help you out. And if you are somebody from Oracle who actually cares about customer satisfaction and can do something to stop this: Even though your practice is good for our business, we find it unnecessary. Oracle deserves better than this. Many of our clients want to talk to you so about their concerns.

You can’t manage what you don’t know!

With evolving technologies, licensing becomes more and more complex. And companies design their IT around technology and not around licensing. There’s nothing wrong with that: However, more often than not the designs result in an unexpectedly high license requirement. Virtualizing Oracle databases is a very known aspect in this regard.

Some systems offer a wide range of implementation methodologies, far beyond virtualization alone. One of them is certainly the IBM P-Series.. Without a doubt, this platform can be both a minefield of compliance risks, as well as maybe the best platform for your money to run Oracle on.

On February 16th the IBM “P-Partners” have been invited by IBM to join a session, during which License Consulting will explain how Oracle should be implemented on PSeries, with the slightest effort, maximum availability while consuming the lowest licensing costs possible.

If you would like to receive a copy of the presentation, know that it’s free for the asking.

So, here are  the answers:

Question 1: What is the Named User Plus minimum requirement for Oracle Database Standard Edition?

Answer D is the correct answer. The minimum requirement is 5 Named User Plus licenses. Not per Processor, or per anything at all. Just 5! You can verify this in the minimum requirements table on the Oracle Store, or in the minimum requirements table within your license agreement.

81% of all answers were incorrect.

Question 2: What contractual relevance does the Oracle Software Investment Guide (SIG) have?

Answer B is the correct answer: It has no relevance at all. You can see it in the footnote of the Software Investment Guide.

72% of all answers were incorrect.

Question 3: A DBA has Oracle Database Enterprise Edition installed on his Dual Core Intel laptop. What is the cheapest way of licensing the software ligitimately?

Answer D is correct. The cheapest way to license Oracle Database Enterprise Edition for use on a system with a single user, is by means of the Oracle Personal Edition license. Verify it in the Oracle Store.

77% of all answers were incorrect.

Question 4: What is the default discount you will get at Oracle when purchasing 11 Processor licenses of Oracle Database Enterprise Edition?

Answer D: 20% (go shopping in the Online Store and you will see!).

72% of all answers were incorrect.

Question 5: For what environments will you need to be licensed (multiple options allowed).

Answer A, C, D, E, F (being, Standby, Production, DR, SAN Replication, Development). You will not find this in your contract or anywhere else, only in the Software Investment Guide and in Oracle’s audit reports….

100% of all answers were incorrect.

Question 6: Where is your audit clause defined?

Answer A: In your License and Services agreement (OLSA), and nowhere else.

55% of all answers were incorrect.

Question 7: What are the differences between Named User and Named User Plus licenses?

Answer B, C: The wording in the user definition (as the Plus definition allows computer-to-computer batching) and the Minimum requirement (the Plus definition increased the requirement).

98% of all answers were incorrect.

Question 8: You have an Oracle Database Enterprise Edition server on a single CPU Intel machine. It is running the OEM repository, RMAN, and a database for the Metadata of Oracle Application Server. The data is managed by 3 DBA’s. How many Named User licenses do you need?

Answer A: None. All these databases are required for other database/iAS functions to work normally. If you did not modify the database scheme – which is highly unlikely – you can run these databases free of charge, provided you have licensed the environments that they are being used for in a correct way.

91% of all answers were incorrect.

Note: License Consulting is open for discussion on any question. And, should an authorized spokesman of Oracle have proof that any answers given here is incorrect, an update will be issued immediately. This will be reflected in the changelog. The best result was a shared result (5 out of 8 questions answered correctly). The winner of the iPod Touch is the Director of Accounting Operations at Dendreon (whom we tried to contact for shipping details, but until now without any luck).

In this post you see the Questions that we came up with. In a next post, you will find the answers and the winner. Feel free to use the test yourself below, and see in the next article how well (or bad?) you did.

Questions

1. What Named User Plus minimum requirement does Oracle have for Oracle Database Standard Edition?
a) 5 Named User Plus per Processor
b) 10 Named User Plus per Processor
c) 25 Named User Plus per Processor
d) None of the above

2. What contractual relevance does the Oracle Software Investment Guide (SIG) have?
a) The SIG contains licensing guidelines that every Oracle client must comply with
b) The SIG contains examples and is solely for educational purposes: Customers are not obliged to comply with it’s guidelines.
c) None of the above

3. A DBA has Oracle Database Enterprise Edition installed on his Dual Core Intel laptop. What is the cheapest way of licensing the software legitimately?
a) If it is for testing, no licenses are required.
b) Oracle Internet Developer Suite
c) 25 Named User Plus licenses for Oracle Database Enterprise Edition
d) Oracle Personal Edition
e) None of the above

4. What is the default discount you will get at Oracle when purchasing 11 Processor licenses of Oracle Database Enteprise Edition (USD 47.500 each)?
a) 10%
b) 15%
c) 20%
d) 25%

5. For what environments will you need to be licensed (multiple options allowed)?
a) Standby
b) Backup tapes
c) Production Servers
d) Disaster Recovery
e) SAN Replication
f) Development

6. Where is your audit clause defined?
a) Oracle License and Services Agreement
b) Oracle Technical Support Policies
c) Oracle Software Investment Guide
d) All of the above

7. What are the differences between Named User and Named User Plus licenses?
a) The price
b) Wording in the user definition
c) Minimum requirement per Processor

8. You have an Oracle Database Enterprise Edition server on a single CPU Intel machine, It is running the OEM repository, RMAN, and a database for the Metadata of Oracle Application Server. The data is managed by 3 DBA’s. How many Named User licenses do you need?
a) None
b) 3 Named User Plus licenses
c) 25 Named User Plus licenses
d) 1 Processor license

But time has passed, and Oracle no longer has a commercial interest in legally pursuing this case. As such, Oracle tried to settle. The settlement agreement drafted by Oracle said that License Consulting:

a) May not talk about the details of the settlement,
b) May not countersue Oracle’s for it’s acting,
c) Must pay for the inconveniences itself, including the legal costs.

Although those terms are pretty much one-sided I was thinking about closing this case. The only condition I had was that I would have a sit-down with Oracle’s regional Managing Director, Oracle’s LMS Manager Europe South, and the regional Legal Counsel to discuss what had happened. The MD could not attend. Because I know him as an honorable man and I owe him my respects I was a little disappointed about that news.

To start off the meeting I wanted to bring forth some suggestions about Oracle’s internal operation. For example, some LMS and Sales staff tend to increasingly tell clients and partners ‘better not work with License Consulting’. Which is actually good for me: It’s like Oracle saying to a client ‘PLEASE DON”T TALK TO SAP’, so the first thing they would do is call SAP. But I have enough to do, and the existing clientele recommending License Consulting is the only salesforce I long for. I continued by telling that if an Oracle  legal counsel says to a client “You must sign, or I (the legal counsel) will lose my job” in a dispute, it’s embarrassing and a vendor like Oracle should know better. Lastly I mentioned a scenario where my lawyer attended a meeting, where an Oracle salesrep  -let’s call him Mr. B – was insinuating to the meeting attendees that I had not left Oracle voluntarily. Mr. B only met me on one occasion, and probably did not know that right after my voluntary departure I was immediately hired by Oracle Benelux. To be precise, I was asked to train the Oracle salesforce and the partners on licensing issues. To sum up the meeting: in good faith I gave Oracle valuable information about themselves that are by no means to my benefit at all. Much to my surprise however, both the LMS manager and the legal counsel showed little interest in my suggestions. On the contrary, they continued the meeting by saying about the raid that, in any similar future event, Oracle would do the same thing all over again in exactly the same way. So, raid my house and use my personal name instead of my business, and pursue me in court. In their words: “It was entirely factual and had nothing to do with me as a person. It was strictly business.”

With the meeting going this way, my thoughts were and still are somewhat like this:

1) If I go and settle this on their one-sided terms, will Oracle go and just do this over and over again if they run into a fight with a customer I happen to work with? In that case I could just as well give them the key to my house.
2) How impersonal was that raid really? If I would have provided a service to a client on behalf of one of the Big 4 Audit Firms – which is entirely possible – : Would Oracle have raided their offices as well? I think not.
3) If I look at it as strictly business, the way Oracle supposedly did: Am I not better off to continue the court case than signing the aforementioned conditions? In many ways, I have nothing to lose and only to win.
4) If I don’t sign, I retain my rights to pursue Oracle in regard to this issue, so next time they might think twice before they do this all over again in exactly the same way.

I appreciate that Oracle could not guarantee this from happening again, certainly not in writing. This is why I had decided prior to the meeting that if anyone at Oracle would at least show the slightest bit of human understanding for me being slightly upset about the fact that they pursued me in person and not my company, had make bailiff’s sniffle through my private home, and sued me privately and directly (and not my company) and not as part of their actions against my client but towards me as a private person: I would handover the (already signed) settlement agreement right there. But with the meeting evolving in the way it did, I simply would not be able to face myself in the mirror if I would settle under those conditions. So I shook hands and left.

To be continued…

A customer hired License Consulting to take a look at their Oracle environment. The investigation concluded that the company was incompliant with Named User licenses, and even after a migration, a substantial amount of processor licenses should be bought. To be precise: Oracle licenses valued at € 1,000,925.44.

In close cooperation with the IT management organization we went out to look for alternatives to buying that many licenses. Out came several options, including a downgrades to Standard Edition, Standard Editioin One and even Microsoft SQL or MySQL. But obviously such a down / crossgrade also some at a price and risk. It was decided to stay on the Enterprise Edition database. However, the hardware and architecture was changed, resulting in a license purchase (after migration of Named User licenses) of only € 10.230,00. During that change, the databases were also upgraded to a supported version, being 10g. How do you think Oracle would have dealt with the client in the original situation?

Again, yet another customer case where the customer was able to eliminate a compliance risk by pro-actively seeking for their own imperfections.

Reference calls with customers are always possible upon your request. And remember, you can’t manage what you don’t know!

So if you’re in the mood, drop by on June 1st, 2nd and 3rd in Eindhoven, Limbricht or Utrecht. It’ll be relaxed roud-table setting with your industry peers, and lots of room for discussions.  It’s just after work (on the way home), and you’ll be home for the evening news. There’s a limited availability, so be quick!

The sessions will be held in Dutch. For additional information and reservations, contact  Valid or view the Press Release.

Sometime last year, my house was raided by Oracle. 2 policemen and 3 bailiffs showed up, with a court order that allowed them to secure data that I obtained during a licensing project at one of my clients. Oracle was then tempting me to handover that confidential information voluntarily, not realizing I’d rather go bankrupt than do such a hideous thing. It appeared as intimidation indeed: Oracle’s  legal case was specifically built up against me as an individual, not even against the company that governs the License Consulting label. I’m still in the blanks (yet curious) about who the brilliant Oracle employee was that set all this into motion.

Interestingly, for the purpose of being really independent none of my companies or myself have any contract or partnership with Oracle (or any other vendor for that matter). As such, Oracle could not and did not specify any reason why they would be allowed to secure any information from me or my computers in the first place. Strangely – and I presume by mistake – Oracle’s request to raid my house was approved by the court.

The bailiffs checked what information I might have in my computer systems, bedroom, kitchen and car that could possibly support Oracle’s so-called legal case. To their regret our hosted servers were out of reach (in Germany), so they had to be excluded from the raid. Still, thousands of electronic files relating to my client were retrieved and sealed, awaiting the court’s ruling.

This is months ago now. The client recently asked me what my professional opinion is about where we are. That’s a good question indeed. So, after some thought this is what I have to say about it:

Dear Larry Ellison,

Oracle is a great company and has some superior products. Many nice individuals are working there, including good friends. But when it comes to current customer engagement from sales, you should seriously take a look at Microsoft’s EPG sales team: Their prime focus is trying to help clients instead of  increasingly trying to suck every cent out of them and tell fairytales about licensing. So, hire an old school EPG guy, and make him sales director of your clients. Your clients may even stop trying to get rid of Oracle software already in use, as the perception of Oracle will really change. Right now your client’s satisfaction diagrams about Oracle as a partner  look very bad, and you deserve better.

Also I suggest you to address compliance differently. As over 50% of your technology revenue in the Benelux region is influenced by your compliance teams, indicators are that there’s something wrong with your license methodologies. This percentage is unheard of in the industry. And even though your view about the future is quite fun: In terms of licensing Clouds, you haven’t solved that licensing-scenario with your opinion just yet. So go and simplify Oracle licensing for now and the future, and make my line of work obsolete. But cleanup Oracle’s current license- and support database before you start, or you’ll just increase the problems. There are enough examples in the market when it comes to finding alternative licensing solutions that can also deal with the licensing history you have. With the proper mix’n match, I see beauty ahead of us all.

Last but not least, thanks for raiding my house and thus involving me into this. I find it somewhat hilarious and still hard to believe, but professionally –  as you can probably imagine – utmost interesting.

All the best,
Daniel

To nobody’s surprise, the court recently ruled that Oracle was on a fishing-expedition and should pay me for the inconveniences caused. Meanwhile I’m waiting for the sound of an Oracle employee being thrown into the water. I have decided to donate Oracle’s cash to the Electronic Frontier Foundation who is actively supporting a quite similar case, so that they can continue their mission.

Finally, my family and I want to thank the lawyers from The Lawfactor for their excellent legal advice, as well as the client’s indisputable commitment and support for my position. And to the journalist crew: I have nothing else to say except what’s written here, and lots of fun work to do and write about. So there’s no need to ask for more!

First let’s look at the limitations. Unlike the name, it’s limited to at least the following points:

a) The entity/entities that are listed on the agreement
b) A specific (named) list of Oracle products
c) A specific region?
d) A limited timeframe (in general, 2 to 5 years)
e) Capped to a maximum amount of Processors. That’s a ‘Capped ULA’. Very boring indeed. The Capped ULA smells like a regular license for an X amount of processors.

Uncapped ULA

The ‘real deal’ is an Uncapped ULA. Most of the time, companies buy them based on a serious growth expectation for a specific product. Mostly, that’s the Oracle Database Enterprise Edition and/or some related add-ons. Or, clients are pushed into ULA negotiations commencing a hostile license audit by Oracle LMS. Let’s think of the positive scenario for now, based on growth expectation, and see what happens with this ULA deal.

Negotiation Process
Oracle will want to understand the baseline for a ULA offering. So, more often than not, the client issues an Oracle Server Worksheet (OSW) so that a baseline for the current situation can be made. This sheet contains an overview of the server infrastructure that is used to run Oracle databases. And, Oracle will try to understand the historic growth pattern that lead to the current situation, as it can shine a light on the future growth.

Step 1: You send the OSW to Oracle, based upon which Oracle can already tell you if you should already buy licenses in the first place (so know what you are doing!). Eventually, Oracle will try to understand the amount of Processors you currently have deployed for the purpose of running Oracle (including test/staging/failover/development/disaster-recovery and so on). Let’s say you have 100 Processors in place, have 5 existing support agreements (5 License Set’s), with a total of  US$ 150.000 support value.
Step 2: Oracle will want to understand how many Non-Oracle databases you have deployed, and understand what the license/support/operation costs are for these Non-Oracle databases. After all, the initial idea of the ULA offering is to kick all of them out of your data plant.
Step 3: Oracle will estimate a growth pattern – as high as possible – to estimate how many Oracle Processors you will have in place by the end of the ULA agreement (which typically ends after minimum 2 and maximum 5 years). Optionally, Oracle will add the value that they think they missed out in the first place – including uncharged support fees – based upon the OSW that has probably been generated by now. Let’s say that Oracle comes up with the ‘realistic’ future scenario, that you will utilize 300 Processors for Oracle Database Enterprise Edition within 3 years time.
Step 4: Oracle will present you with a quotation for 200 Processor licenses: Oracle will try not to mention this, but that’s how the calculation works in the end. They will count 200 x US$ 47.500 = US$ 950.000 US$ for the license. Let’s say you will get a shabby 60% discount on it, and quote it for US$ 380.000:  The actual quote for the ULA will look something like this:

US$ 380.000 ULA license fee, for Oracle Database Enterprise Edition
US$ 150.000 Existing Support for Database Enterprise Edition (all license sets and support contracts will be migrated into the ULA offering)
US$ 83.600 Additional support fee for ULA agreement (22% from the 380.000)

Let’s just pretend like you are actually going to do this. You will pay 380.000 upfront, and during the next 3 support years, you will have to pay each year 150.000 + 83.600 = US$ 233.600 for the support.

Unlimited Use Period
Until the end of the ULA period, you are allowed to use an unlimited amount of Processors for Oracle Database Enterprise Edition. Hurray, Hurray!

End of Unlimited Use Period
By the time your ULA ends, you will have to provide Oracle with a signed confirmation that states the exact number of Processor licenses you have utilized for the purpose of running Oracle. You will get the exact number of Processor licenses that you have confirmed towards Oracle. If your deployment turns out to be 499 Processors or just 101 Processors: What will happen is this.

1. You will not have to pay any extra if you have more processors utilized than you had anticipated for (499 in total)
2. You will not get any money back if you just deployed one extra processor (101 in total)
3. Your support fee (US$ 233.600) will remain the same, no matter if you end up with 499 of 101 licenses.

Based on these facts, you will understand that a ULA can be a good deal, and a bad deal. But you will have to wait 2 to 5 years to find it out. That is a long time, and your IT priorities can change significantly within that timeframe. Feedback from our extensive client base shows that far too many clients are disappointed and frustrated, as their growth did not meet their expectations. Partially due to internal agenda’s and priorities (such as – amongst others – outsourcing), but also due to the ever-increasing hardware and storage performances. In fact, only one client was a hands-down-happy-ULA-client. Their  Oracle software deployment increased almost 1000% over a 3 year period. Good for them!

The ULA aftermath
Now if you are happy with the ULA, and don’t want to hear about nasty stories, stop reading.

But let’s think further ahead.  Say you counted 400 Processor by the end of your agreement, and felt really good about it. But 2 years after the ULA, you realize that you don’t need those 400 Processor licenses anymore. You just need 200 licenses now, due to layoff’s, faster servers, Divestures, Outsourcing, IT consolidations or who knows what. You still pay US$ 233.600 per year on support, and would like to see that number go down with 50%. But unfortunately, you have one license now. One ‘License Set’. With all 400 Processor licenses on it. Now, go and read this article about support recalculations.

5 years after you’ve signed for that great deal, you’re going to find out you will never ever be able to get rid of any of those licenses anymore, at least not for a fair price. Unless you kill’em all.