What is Oracle Entitlement? (Part 2)
This is a very wide and open question to answer, especially to an Oracle license consultant with years of experience.
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 CSI (Customer Support Identifier) 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 this question down into parts, otherwise, I could be trying to cobble together all this information into one post 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 or skip if you already know the subject matter. Here is a link to Part 1 in case you missed it.
Here we go, here is the second part of answering the question of the title.
Part 2 — What is an Oracle Agreement?
An Oracle agreement is an agreed contract between (You) the customer and Oracle Corporation. An Oracle agreement is used for sale of Oracle’s products and services. In general, there are two types of agreement — an Oracle Cloud Services Agreement (CSA) and an Oracle Master Agreement (OMA). Each of these agreements are available as a transactional agreement or a fixed term agreement (typically five years).
Transactional Agreement (TOMA — Transactional Oracle Master Agreement)
A transactional agreement is the fastest way to agree a purchase of products or services with Oracle with standard terms and conditions. Many customers choose this route for ease of ordering but fail to realise that certain limitations in a standard agreement can be negotiated differently to better suit a company’s deployment or usage rights. Customers who may only buy once or very seldom would be better to use a TOMA for speed to order.
Oracle Master Agreement (OMA)
An Oracle Master Agreement can be used over a term to allow for repeatable orders or multiple purchases of Oracle products and services, and also referred to in subsequent orders. It means that once you have an agreement with Oracle, you can order products referencing that agreement (which may have better terms and conditions than the standard TOMA).
Amendments to an existing agreement can be negotiated as well and added as an addendum, rather than having to negotiate on every transactional agreement. Customers ordering a lot of products many times on many projects, would be better suited to sign an OMA, as terms and conditions will be set and agreed upon during the term with no need to renegotiate them.
An Oracle Agreement is not effective and accepted by Oracle, until both (you) the customer and Oracle Corporation sign the documentation. After acceptance, Oracle should furnish you with a copy for your records — I would advise all clients to ensure safe keeping of all Oracle documentation especially ordering documents and agreements.
Some agreements might be better or worse than others! I am referencing a United Kingdom agreement here, so any agreement would be subject to English Law. If an agreement is for a business in another country, then that would be territory specific.
Here are a few clauses in Oracle agreements, to be aware of:
Ownership and Restrictions
Oracle retains all ownership and intellectual property rights to the software programs — an agreement is made between user and Oracle to ‘allow’ or grant the user to download and use the software, not actually own the software. This becomes very important if Oracle asks you to stop using the software if in a non-compliant situation, legal issue, or a support payment issue. At the end of the day, the software is Oracle’s, not yours. The perpetual basis is only on the licenses, not the software — some users do not differentiate this, which can lead to challenges.
Audit
In generic Oracle agreements, there is usually a clause about Audits. It normally states that Oracle has a right upon 45 written days’ notice to audit your use of the software programs. The user also agrees to provide reasonable assistance in the audit and access to pertinent information to enable the audit process. This is a very wide-open clause and can be interpreted differently depending on the situation. If Oracle find a non-compliance and the user does not remedy within 30 days, Oracle can end technical support availability — hence the ownership restriction could come into effect. It is best to assist Oracle on an audit, but not to give away too much information that you are not obligated to share. We have a considerable amount of content on audits — how to prepare for, respond to and defend against.
Trial Programs
Oracle does give rights in agreements to trial programs. In this event, you may download and use for trial purposes for a period of 30 days to evaluate. After 30 days, if you want to continue use, you must procure the appropriate licenses. A lot of times customers do not fully understand this clause — all test and development environments must be appropriately licensed, if required after the 30 days window.
License Definitions and Rules
Oracle also includes some generic license definitions and rules for customers to be aware of. These include the definitions for metric such as Named User Plus, Processor, Employee, Expense Reports, Hosted Named User, Person, Subscriber and $M in Revenue among others.
Each of these metric definitions need to be looked at to determine if the usage will be within tolerance of the software programs ordered.
There are also some generic licensing rules in Oracle agreements such as user minimums per processor, enterprise options matching associated databases and restrictions on number of processors allowed to run Database Standard for example.
In Summary
An Oracle Agreement is a really important document for the customer 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.
It is important that customers retain every Oracle Agreement (and ordering document) for every order of Oracle software products, so a license entitlement summary report can be created and can be referred to on an ELP (Effective License Position).
I cannot stress enough the importance of keeping these agreements and documentation safe and being aware of the limitations and restrictions that are agreed — a lot of times, Oracle will refer to a clause in an agreement whilst under an audit and show the customer where they have ‘crossed the line’ — giving Oracle all the power in the negotiations. It is better to be fully aware of all agreements and limitations before any audit is initiated.
In part 3 of my series, I will be covering License Definitions. In the meantime, if you have any questions on this or any other Oracle license topic, please do not hesitate to contact us or visit our website.
About the Author:
Johhny Cree is an Oracle SAM Licensing Consultant at Version 1.
