Understanding Unlimited Software Licence Agreements

Although focus has shifted to the cloud in recent years, some vendors continue to push unlimited software licence agreements for large enterprises. In many ways the benefits of a customer committing to the cloud or to unlimited licence agreements are aligned. The most important of those benefits is long term commitment.

There are, of course, benefits to migrating to the cloud or to an unlimited licence agreement for enterprises, and they can also be similar. One of the biggest factors motivating enterprises to take up one of these options is flexibility, even though that may come in different forms. Another factor is value when growth is expected. An unlimited software agreement can offer quite substantial discounts.

On the surface, entering an unlimited agreement feels like an easy task. Take the Oracle ULA, for example. This would represent a set of software products that an enterprise could deploy freely, without needing to worry about where and how many licences are consumed, over a set period of time.

Given the apparent simplicity and array of benefits, what do enterprises need to consider before entering such an agreement. Furthermore, should there be any concerns?

Can organizations deploy anything they want with an unlimited software agreement?

Unlimited software licence agreements allow you to deploy whatever you want, wherever you want. That’s often the impression that end-users have of their agreements. In reality, unlimited licence agreements define what can and can’t be deployed. They will almost always contain a set of agreed products that can be used in an unlimited capacity. If we take the Oracle example again, this agreement may include Database and several features. It is therefore possible that a DBA, under the impression that they don’t need to worry about how they’re using DBs from a licensing perspective, may use features not part of the agreement. This is why the important terms of an unlimited agreement need to be fully understood by all parties.

Issues with deployment in an unlimited software agreement term occur during certification

Unlimited software licence agreements typically stipulate that the enterprise declares usage at the end of an agreement. First and foremost, this process is not something that just anyone can do. It requires knowledge of how to audit the software – whether that’s understanding and correctly configuring ILMT for IBM licensing, or understanding how to query Oracle Database usage. Secondly, the nature of an unlimited software agreement may mean that an enterprise has either massively over-deployed or under-deployed software.

Under-deployed software means that the value that an enterprise hoped to achieve wasn’t met. Perhaps growth wasn’t as great as was expected. In this scenario an enterprise may have been better off buying through a standard agreement. Usage can also decline after an agreement has ended, and this could lead to an enterprise paying the same amount of maintenance or more in the future.

Over-deployed software tends to come from the ‘deploy wherever you like’ attitude. That’s not to say that software is unnecessary, but that licensing hasn’t been a consideration when deploying software. For example, Oracle Databases may have been deployed in a vSphere v6 environment, potentially creating a requirement to license all ESX hosts within the enterprise.

While many enterprises don’t see an issue with over-deploying during an unlimited software agreement term, the issue arises at the time of certification. Although the enterprise now potentially owns more licences than they’ll ever need, they are typically left with a hefty maintenance bill that can’t be easily reduced. Oracle, for example, employ methods to ensure support costs are kept at a similar level even if requirement is reduced.

Unlimited agreements and the cloud

Another issue that’s crept up over the last few years is with Cloud usage. While it will be known at the time of signing the contract whether products within the agreement can be deployed to the public cloud, what’s not so clear is if this usage can be declared at the time of certification. Certainly, Oracle don’t allow this as standard, which could mean that your cloud usage is technically unlicensed at the end of the agreement. Of course, this is easily rectified by paying Oracle again…

Better than that, of course, is to address this when finalising the agreement. An enterprise should ask that non-standard terms are entered into the agreement that allows declaration of cloud-based usage.

Understanding the terms of your unlimited software agreement

When deciding to enter an unlimited software agreement it is imperative that everything is understood. It is important that an enterprise knows its current licence position so they can understand expected growth. The enterprise must also have a good idea of that growth, understanding where the software will be deployed. With the agreement it’s important that all parties understand the terms, particularly around certification and right to audit. Although it seems obvious, it’s also important that end-users understand what products they have the rights to use.

If in doubt about part of the unlimited software agreement, from deciding what goes in there to certification, seek out the help of software asset management professionals such as License Dashboard.

Paul Mitchell

Paul Mitchell

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