What is Oracle Entitlement? (Part 1)
This is a very wide and open question, especially for an Oracle license consultant with years of experience to answer.
As part of our weekly internal chats on Oracle licensing, I decided as a task to write what is meant by Oracle entitlement, and actually, it was a difficult task to start with: where do you begin? An Oracle ordering document, an Oracle agreement, an Oracle definition of a licensing metric, a Customer Support Identifier (CSI) number, agreed restrictions and usage rights, a signed document between vendor and customer? Well, it could be some or all of those.
So, to be able to properly answer that question I will need to break it down into parts, otherwise, I could try to cobble together all the parts into one blog and end up creating a very long post that would be tedious to read and may get lost in translation.
Also, for the reader (you lucky people), you can pick and choose which parts you want to learn more on or skip if you already know the subject matter.
Here we go, the first part of answering the question of the title…
Part 1 — What is an Oracle Ordering Document?
An Oracle Ordering Document in general is a signed document between Oracle Corporation (the legal name will differ dependant on country ordered from) and (You) the customer. There are different sections on the ordering document; in general programs / licenses to install a particular set of software products with or without technical support, and the agreed upon limitations of such line items.
Each part of the document has things to be aware of, so I will break them down for you in bullet points. An Oracle ordering document is only active when both parties (You) the customer and Oracle Corporation sign and date the document.
· Program and Program Related Service Offering Fees
This shows the programs and services, and if bought on a perpetual basis, the support will be for 12 months from the order date, with the assumption that after 12 months, license support fees will be renewed on an annual basis to allow for technical support and upgrades . There will also be a reference to the currency, which may or may not be beneficial to you based on the exchange rate (as defined by Oracle’s own internal FX rates) at the time of ordering. The document will itemise all license programs ordered by metric, quantity, the license level (in general it is Full Use but may be limited (i.e. Application Specific Full Use)) and the net fee for each line item. Each license will also have a secondary line item for the appropriate support and update fees (generally based at 22% of the net license fee). There may be shipping fees for media packs etc if ordered (rare these days!). All of the line items will be totalled, and a net discount applied (discount will be applied based on the size of order). For any additional discounts, they would be based on an approval from Oracle and may be a one-time discount or be based on an existing price hold for the customer on a predefined term and possibly value based: any such price hold will be detailed in an earlier ordering document.
· Agreement
The agreement and modifications to the agreements are highlighted in the ‘Agreement’ section. This shows which agreement (Oracle Master Agreement) by name, typically in the format of country-OMA-CPQ - number (example GB-OMA-CPQ-123456), the CPQ number is the number attributed to the quote (Configure, Price, Quote).
The agreement means that between the two parties, there is an order of the license items, and they are granted with the overarching agreement on terms of the agreement version referenced — there may be differences between countries, orders, and versions! So, it is best to read the agreement version and included clauses before signing the ordering document. It is very important to review any such overarching agreement as it will contain terms and conditions that are in addition to the ones included in the ordering document. In part 2 of this series, I will be explaining Oracle agreements in more detail.
· Territory
This is an overlooked section as it is generally one sentence. This section should be closely reviewed as this shows in which territory you are allowed to use the licenses. Now, if you ordered with a territory of Ireland, and you have some offices in the UK, technically Oracle could deem that the licenses ordered can only be used in Ireland and not the UK. There are different ways to interpret the Territory clause with Oracle providing different answers internally depending on who answers: it’s either ‘where the software can be used’ (meant to imply physical country where the servers running the Oracle software are) or ‘the territory in which the Customer gets business benefit’ (i.e., it doesn’t matter where the servers are but the Customer entity must only use the licensed software to benefit entities in that country). There are ways to remediate this issue, but in the first instance, you should ask Oracle to ensure that all licenses have a ‘worldwide’ usage mentioned rather than being country bound. It may be possible for Oracle to amend this paperwork on an amendment thereafter, but better to have this ironed out on the original ordering documentation.
· Fees
The next section is Fees, Invoicing and Obligations; in this section, it highlights that all fees are non-cancellable, and the sums paid are non-refundable, except under an agreement clause. So, if you order some licenses in error, Oracle will not cancel and refund fees for the licenses. You may be able to get a credit back for unused support, but again this will be a credit upon approval by Oracle. Bear this in mind when ordering and ensure your orders are accurate and will be used before submitting.
· Effective Date
This shows the commencement date, which is generally the ‘order date,’ but could be agreed with Oracle’s approval to be a date in the future. Commencement date is also known as the ‘effective date.’
· Customer Reference
An often-overlooked part of the ordering document is the Customer Reference — this is where Oracle can (and we have seen do), refer to your company by name and/or logo, on sales presentations, marketing activities, developing a customer profile and for promotional activities. You may or may not want Oracle promoting that you, the customer, are using their software, so it may need a closer look to see what is on the ordering document in this section.
· Oracle’s License Definitions and Rules
This section is a really important part of the document, as this refers to the License and Definition Rules, which are published on www.oracle.com, but may or may not be agreed to in your agreement. If the rules are not explicitly mentioned on the ordering document or agreement, then it comes down to negotiating with Oracle on your adherence to the policies that Oracle publish such as hard partitioning, virtualisation, and DR policies. This is important when looking at deployment in virtualised environments for example.
· Delivery and Installation
This section lists the website where you can download the installation media — this is fairly standard across all Ordering documents.
· Segmentation
This term refers to consulting services. All license items in the ordering document are offered separately from consulting services. Consulting services must be ordered on separate documentation.
· Order of preference
Read this carefully, as if there are any inconsistencies or mistakes between the agreement and ordering document, the ordering document takes preference. This may or may not be a good thing, so please check that the agreement and ordering document are synchronised.
In Summary
The Oracle ordering document is a really important document for you to analyse before any signature is applied. You may be agreeing to limitations that do not match the usage you were expecting, and it may be that some terms can either be changed or removed completely on approval. The Oracle ordering document takes precedence over an agreement if there are any inconsistencies, so this document is the one to get 100% accurate and in the correct format that both parties agree to.
It is essential that customers retain every Oracle ordering document for every order of Oracle software products, so a license entitlement summary report can be created and referred to on an Effective License Position (ELP).
In part 2 of my series, I will be covering Oracle Agreements. Meantime, if you have any questions on this or any other Oracle license topic, please do not hesitate to contact us.
About the Author
Johnny Cree is an Oracle SAM Licencing Consultant at Version 1.
