Oracle License Management

BEGINNER COURSE
Oracle Contracts
How do you buy Oracle Software?

1 From Oracle Directly

(most of their business is done this way 70%+)

From resellers
2 (Technical partners often, not large resellers) –
partners have 30% discount always. Other discounts
is purely up to negotiation skills/expertise.

3 From Oracle Webshop

(very rare, only low cost software, such
as Java)
Oracle - > End customer Contracts

Oracle Ordering Oracle Support Policies

Document | Dynamic/URL”
Oracle Master
Agreement (OMA)
ISV/OEM Oracle Contracts

ASFU - contract Proprietary Application

Hosting
ESL-contract
What do you buy?

You don’t buy a product,

You usually negotiate
you buy the right/license to
new license terms with
use Oracle software. “rights
every purchase.
granted”.

You buy Oracle license

Perpetual / 1-5 years and
support for 1 year forward.
How much does Oracle Software Cost?

The price list is Oracle

available On sometimes hide
Oracle website discounts on
(USD) - there is an licensing agreements
localized price list in you can verify
most countries that discount by viewing
are often adjusted to the public price list.
current USD rate. Partners always 30%
Discounts from
Oracle usually 20-
70%
Which agreements do you sign when you buy
from Oracle?

Almost everybody buys on a license agreement

“Oracle Ordering Document” this agreement
exists for every new order

You also sign an Oracle OMA (in the past they were
called OLSA) - They are usually valid for a few
years and they contain a few master terms. But if
you negotiate terms per purchase the terms on the
ordering document over-rules the OMA.
 https://www.oracle.com/assets/technology-price-list-070617.pdf
Here is the Oracle Price list
 https://www.oracle.com/assets/technology-price-list-070617.pdf
Here is the Oracle Price list
 https://www.oracle.com/assets/technology-price-list-070617.pdf
Here is the Oracle Price list
Which agreements will you need to sign when
purchasing Oracle software?

b) OMA c) Both
a) Ordering Doc
What does Oracle contract “OMA” stand for?

a) Oracle b) Oracle Master

Licensing Agreement
Agreement
In which contract can you find metrics and
quantities?

a) OMA b) Oracle Ordering

Document
Oracle Contracts are important

• Companies can up to hundreds of different licensing

agreements.

• Companies can have different terms for the same

products. Each contract needs to be reviewed for
limitations.

4 important facts • Depending on when you bought the Oracle software it

about Oracle has different licensing rules.
contracts
• Many Oracle contracts are open for interpretation
(vague)
What is in the OMA?

General Schedule L
TERMS – VM
Schedule C
Schedule P – Cloud
Schedule H
– Program Services
– Hardware
(our focus
today)
 1

OMA contains general terms

for purchase of both OMA contains contract terms
software/programs, “rights granted” your license
hardware, cloud and rights
services
Use Oracle Software . “strictly internal
business purposes”.

Use: You may allow your agents and

contractors to use Oracle Software.
(including contractors and outsourcers)

Use: You may Oracle Software to

interact with suppliers and customers.

2
What is NOT allowed

It is not
allowed to
share licenses
with another
company It is not
allowed to use
for external
business
(Building SaaS
for external
companies)
What else is in the OMA?
3 5

It describes technical support costs (the

It provides “trial” Dynamic link to Oracle annual increase)
usage Oracle SW. support polices that Oracle support increases every year, how
can change at any much depends on what is in the
time! agreement. In some countries its as high
as 10% - but standard is 4%

Tech Support policies 7 The audit clause.

that contains “vendor How? When? By
lock ins” whom?

6
Oracle OMA: Summary

• Oracle are often not willing to negotiate the • Oracle usually wants to treat this as a
OMA, but far more likely to negotiate license “standard, auto-accept, auto-sign” - please
terms per order. review document and ask for a copy at least
30 days before you make any purchase.
• A large Oracle customer may have hundreds
of Oracle Ordering Documents and 10-20 • If you do not have an active OMA: Do not
different OMA and OLSAs. All contain sign one for smaller purchase: as it may
different terms. impact future license rights. (Control
Sourcing/IT) avoid signing OMAs without
• You can allow contractors and oursourcers to review.
use your Oracle Software, as long as they
are “agents” and have signed a contract with • If you identify contract term in your OMA that
you. you want to change, next time you make a
purchase try to renegotiate the old OMA or
specific/new license term on the specific
ordering document.
How do most companies buy Oracle Software?

b) Direct c) Oracle
a) Reseller
from Oracle webshop
If the discounts on the Oracle proposal are
hidden, how can you find out the real discount?

b) Look at
public price c) Its
a) Ask Oracle
list and count impossible
backwards
What does the standard audit clause say about 45
days?
b) That you must c) That the
a) That you must
acknowledge the audit must be
start the audit
audit letter within completed
within 45 days
45 days within 45 days
How is the Oracle OMA locking-in companies in
future support costs?

b) It increases the
a) It increases the
support costs every
support costs
year by a
every year by a
contractually agreed
contractually
% and stops partial
agreed %
termination
What is the Oracle Support fees based on?

a) List price for b) Net license fees

products paid
Check-list before entering an Oracle OMA

Do we already have an active The new OMA has more

You can negotiate the You can negotiate the
OMA to reference? Make sure language about running
audit clause and increase audit clause so Oracle
Oracle don’t make a mistake to Oracle Audit
the days from 45 to 90 does not audit you within
give you a new OMA when you measurement tools, try to
(easy) 1-3 years (easy-difficult)
make a small purchase. remove it by negotiation.

You can negotiate the 30

You can negotiate a lower
day remedy/pay fees if You extend your trial
cap to your support
there is a license gap in rights for Oracle SW.
increase “pay less”
an audit.
Oracle Licensing Agreements
Page 1: Oracle Ordering Document

1. Your name: Legal entity / State of Kansas

2. Agreement name: OLSA/OMA – under which

master agreement are these licenses purchased?

3. Description and Fees for Ordered Programs and

Services – This is licenses and 1 year of support
fees.
Page 3: Product Description / License Type

 Licenses
 Perpetual/TERM?
 Quantities:
 Price per product & Discount levels.
Page 3: Product Description / License Type
 Page 4: General Terms

Commence date – you have the right to use Oracle

software immediately as you sign. – normally don’t
negotiated (standard term)

Fees, invoicing, payment obligation – you are obliged to

pay the funds – normally don’t negotiated.
(standard term)

Delivery and installation – Oracle software is delivered

electronically (downloaded) (normally don’t negotiated)
 Page 4: General Terms

Source code – Normally not negotiated

Segmentation – Oracle never mix licensing and consulting

Order of precedence – Oracle here says Ordering

document has precedence over OMA.
 Page 5: General Terms, Others

Customer reference – negotiable, should be used to obtain

better negotiation results

Territory – must be negotiated, should be worldwide, this

determines where you can physically deploy oracle software

Server express – some limited use text for licensing

(limitation) – NOT STANDARD.
 Page 5: General Terms, Others

Limited Use – Can only be used with specific applications

Technical Support Cap – Cap on support increases for this

order only

Other – unclear meaning….

Summary – Contract Review

1. No customer definition 2. Only US territory 3. Limited use clause

negotiated. deployment rights. “can only be used for2
applications”

4. Other is open for 5. They negotiated a cap rate 6. No license flexibility terms
interpretation. on the support costs saving negotiated.
4% every year – total savings
first 3 years is 13 000 $
When is a good contract better than a bad one?

Same products Same products

All majority owned subsidiaries All majority owned subsidiaries
Worldwide usage Worldwide usage
Right to license test and dev with 10 users Right to license test and dev with 10 users
instead of 25. instead of 25.
No new Oracle audit for 5 years 82% discount
40% discount Limited use specific application

Question: What is most important? T&Cs or discount levels?

Which contract term tells me which entities can
use & access the Oracle software

a) Customer b) Other
definition
Where are usually the “limitation” clauses in the
Oracle contracts?

a) OMA, Other b) Oracle Ordering

Documents - Other
Can i share Oracle licenses with other
companies?

a) No b) Yes, if they are at

an outsourcer
Can I build a SaaS with Oracle licenses offer it to
external companies?

a) No b) Yes
Before I move my Oracle licenses to the cloud.
Which contract clause do I need to review?

a) Customer b) Territory, other

definition, other
3 steps to perform Oracle Contract Compliance Review

Review #1 Review #2 Review #3

Customer definition: This is Territory: Review your territory Limitations: Review all
which legal entities may use and clause, are you following the rights agreements for “limited use” or
access the Oracle Software. and only deploying Oracle in that “others”.
Why focus on it: It must be as wide as specific country? If you are
possible (all majority owned deploying oracle elsewhere this is a Action: Make sure you don’t have
subsidiaries) - big contract big compliance risk. any limitations, if you do please take
compliance issue for Oracle software. necessary further investigations
Action: Review deployment of your
Action: Review your licensing Oracle software and match it to your
agreements understand is it only the contracts.
purchasing entity that can use Oracle
software? If you don’t have all
majority owned subsidiaries then you
have a big compliance risk:
Oracle Contract
Training,
5min break
Central vs Localized
Contracts
Buy on corporate level=
YOU CAN USE IT ON ALL SUBSIDIARIES

Buy on subsidiary level = RISK only be using it on one

entity
Global company and we buy Oracle in each
country is that a good/bad thing?

• Greater risk for error in licensing agreements

(limitations)

• Commercial terms will not be as good as purchasing at

parent level.

• Do you want to have vendor relationship with Oracle in

Four reasons why many countries?
you should not buy
Oracle on • Oracle will gain audit right in the local country. Buy
subsidiary level centrally and you will not be audited in several countries.
Check list for Oracle Contracts

1. Include all
majority owned 2. Always
subs have
worldwid
e usage DONT WORRY!
territory

If your customer definition or

territory is wrong, you can ask
4. Check for oracle to change it "free of
3. Always limited use - if they charge“ if you buy new
negotiate exist try to remove
technical it next time you buy
software or cloud services.
support rates anything
Buying Locally: Oracle "Frame Agreement"

It usually includes a negotiated OMA

YOU CAN
Fixed pricing (discount that subs can purchase off)
NEGOTIATE A
FRAME Then subsidiaries can purchase on those terms
AGREEMENT
Bad: oracle can audit locally.
Oracle Support Renewals
Facts about Oracle Support
• It is a back office function at Oracle. (more and more is being moved to
Romania and India)

• Your account manager / sales reps doesn’t care about it, they are only
compensated on new license and cloud sales.

• Oracle has 95% margins on support.

• Support is based on net licenses paid. The more discount on licenses the more
discount on support.

• You will see same products on different support contract it means that some
contracts got better discount than others.

• Support Renewals team don’t have much mandate to negotiate and if you look
for a 20-50% reduction its impossible.

Page 50
#1 Making you pay support for unused licenses.
“All or nothing”

Need to terminate
“unused” licenses if you
don’t want to pay support
for them

End results: many

customers don’t terminate
support and are paying for
“unused software”
#2 Making you pay support for unused licenses.

You often need to

terminate huge
amounts of licenses to
make any saving at all.

Almost every large

company have this
Support: issue (often as high as
30% of all Oracle
Support is discounted the same as licenses, so
Software.
Example: Purchase 50x CPUs with 50% discount on licenses AND Support.
Net support would be 50x 9900 $ (listprice) x 0,5 (discount) = 247 500 $

4 YEARS LATER
You wish to terminate 25 of those processors of WLS Suite.
Oracle will NOT quote you 247 500 / 2 = 123 750 $
Oracle will quote you: 25x 9900 $ (listprice) = 247 500 $ (minus any e-business discounts
usually 5-10%)
Simplifying support renewals
• You may have 50-100 different CSIs each with
different support renewal quotes.
• Advise: Consolidate the support renewals to 1
date and one invoice.
• It will not become 1 contract you can still do CSI
termination
• Benefit: far less e-mails from
Oracle and less admin.
When is a good contract better than a bad one?

You may have 100x CPUs of Oracle Then you have 200x CPUs of Oracle
Software (DB EE) and that support is Software (DB EE) and that support is
300 000 € 250 000 €

Question: Why is the pricing different?

Which contract term stops me from leaving some
contract unsupported (same product set)

b) OMA, Technical
a) Oracle
support policies >
Ordering
matching support
Document,
policies
Technical Support
Usually if I make a 25% termination of my licenses
will my support go down?

a) NO, because? b) Yes, because?

License assignment & license
migration
License Assignment

License Assignment Document - What is it?

Used to assign licenses from one entity to another.

Both entities need to sign to make the assignment.

How do you do
it ? When do you do
Contact oracle - it?
need their approval Sell off a
unless you have company,
contract right. internal re-org
When do you do a license assignment?

• Internally moving licenses within your company

structure.

• When you are divesting or acquiring companies.

• When you want to consolidate all licenses to one

specific company (parent, or IT contracts entity)
Four reasons for
• Can be used to remove unused software from support
doing a license
assignment agreements.
License Migrations
Migration document - What is it?

Its when you upgrade Its when you change

licenses. license metrics.

Amendment.
How do you do When do oracle
it ? use it?
Contact oracle New terms on
You need to sign it and usually always
usually accept new contract.
approved.
OMA.
License Migrations

When do you do it:

• When you want to switch from NUP to CPU or
vice versa.

• Upgrade from standard edition to enterprise

• Other license migrations (upwards - not

downwards)
When do perform a license migration?

• When you want to use standard edition towards

enterprise (technology)

• When you want to change from NUP to CPU licensing or

vice versa

• When you have old license metrics that makes no sense

Four reasons for to keep. (many old ones are good!)
asking for a license
migration. • When you want to move around Oracle support rules on
partial termination. (don’t tell Oracle this)
Can you always do a license assignment?

a) Yes b) No
Can you migrate Enterprise licensing to Standard
Edition?

a) Yes b) N
If you perform a license migration, what will be the
benefits?

a) My support b) I will sign a new

costs will go down license agreement
Toolkit for contract managers
 Toolkit for signing new contracts
There are around several hundreds of
contract items that provide benefits on
licensing such as test and dev,
archieving, backup. They are not part
1 of the current licensing agreement,
Territory you must have expertise from
Make sure you someone who knows Oracle
Customer have worldwide contracts well in order to build your
definition: usage licensing agreement.
deployment Extended Support
Negotiate all If you don’t upgrade Oracle
majority rights. Save a copy of
Software in the pace Oracle
owned the licensing
3 wants, the products will move
agreements on
subsidiaries to 2 from premier to extended
your company
be put on the support and then the 6
contract Technical increases will be 10-20%. 7 servers, archive
them. Don’t loose
Support caps Make sure you negotiate a
them if you got
Make sure you waiver from that.
hold of all the
negotiate as
agreements from
small increase
as possible on 4 5 Remove limited use Oracle.
future support clauses, unless you are
costs. absolutely certain you are ok
with it and can manage it in
the future.
Toolkit for improving your contract management

1. Contact Oracle to 2. Next step ask Oracle for full 3. Review your contracts
request a full license copies of all the licensing towards your actual
inventory agreements (ODs + OMA) deployments.

4. Understand if there is 5. Are you going to purchase 6. If no new purchase, if you

any risk with contracts. anything new from Oracle? take the contract risk
Good time to renegotiate seriously you can/should
older agreements with Oracle. consider entering a
negotiation to fix the
agreement for a payment.
(license upgrade)
Thank you

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