Oracle License Terms & Conditions
- OMA: Master agreement covering audit rights, payment terms, and confidentiality.
- Ordering Document: Details specific purchases, territories, and limited use.
- Audit: Oracle may audit software usage with 45 days’ notice.
- Support Terms: 8% annual increase for support fees.
- Termination: 30-day period for paying accrued fees.
Oracle’s License Terms & Conditions
Oracle’s licensing terms and conditions are primarily structured around two key agreements: the Oracle Master Agreement (OMA) and the Oracle Ordering Document. These agreements form the foundation for Oracle’s business relationships, setting out the terms for software usage, support, payments, and compliance.
Oracle Master Agreement (OMA)
The Oracle Master Agreement (OMA) is the foundational contract that establishes the overarching terms and conditions for all Oracle transactions. It applies to all customer purchases and interactions with Oracle and sets the baseline for compliance, fees, and operational rules.
Key Clauses of the OMA
- Audit Rights: Oracle reserves the right to audit customer usage of its software with 45 days’ notice. Customers are required to cooperate fully and provide the necessary data for verification.
- Example: Oracle might request detailed deployment records to ensure software use aligns with licensing terms.
- Termination: The OMA specifies the conditions under which the agreement can be terminated. It also mandates that accrued fees be paid within 30 days of termination.
- Confidentiality: Information shared between Oracle and the customer is confidential for three years from the date of disclosure. This clause helps ensure that sensitive business information is protected.
- Payment Terms: All fees related to Oracle software usage are due within 30 days of the invoice date, including any applicable taxes.
Oracle Ordering Document
The Oracle Ordering Document provides specific terms for each purchase. It supplements the OMA and takes precedence in case of discrepancies between the two agreements. This document is crucial for understanding what is being licensed, including usage restrictions, support terms, and payment details.
Critical Terms in the Ordering Document
- Customer Definition: This clause specifies which entities can use the Oracle software. Typically, this includes the parent company and majority-owned subsidiaries.
- Example: If a company purchases Oracle software, any subsidiary in which it owns over 50% can also use the software under the same agreement.
- Territory Clause: This clause defines the geographic boundaries for software deployment. Oracle generally recommends specifying worldwide usage to avoid compliance issues related to territorial restrictions.
- Technical Support: This section outlines the terms for technical support services, including the annual rate increases for support fees, which are typically is 8% per year.
- Limited Use Clause: This clause specifies any restrictions on how the software can be used or deployed. For example, Oracle may restrict the software to a particular business unit or hardware configuration.
Read about Oracle Software Investment guide.
Contract Management: Negotiation Focus
Managing an Oracle contract often requires negotiating certain aspects of the Ordering Document to ensure flexibility and cost efficiency.
Key Areas for Negotiation
- Price Hold Provisions: These provisions ensure that the prices quoted for initial purchases are maintained for future acquisitions, helping to manage long-term budgeting.
- Divestment clauses allow for the continuity of software use if a part of the company is sold or spun off. Thus, divested entities can continue using Oracle software without needing a new agreement.
- License Assignment Flexibility: Negotiating flexibility for license assignment can help in mergers, acquisitions, or changes in business structure, allowing for smoother transitions without new licensing fees.
- Disaster Recovery Terms: It’s important to negotiate disaster recovery terms to ensure that Oracle software can be deployed in backup environments without incurring additional licensing costs.
Relationship Between OMA and Ordering Document
The relationship between OMA and the Ordering Document forms a comprehensive framework for using Oracle software. The OMA establishes the general principles and rights, while the Ordering Document provides specific, purchase-related terms that detail how Oracle’s software and services are to be used in practice.
- Example: The OMA may set general confidentiality obligations, while the Ordering Document details the products purchased, the number of users, and specific usage rights.
Understanding the nuances of both agreements is crucial for effectively managing Oracle software licenses. It helps organizations maintain compliance, minimize costs, and ensure the most value from their Oracle investments.
Oracle’s License Terms & Conditions FAQ
What are the key components of the OMA? The Oracle Master Agreement (OMA) establishes overall terms for all transactions, including audit rights, payment terms, and confidentiality clauses.
What is the Oracle Ordering Document? The Ordering Document provides specific details for each purchase, including pricing, product descriptions, and usage limitations. It takes precedence over the OMA if there are discrepancies.
Can Oracle audit our software usage? Yes, with a 45-day notice, Oracle can audit software usage. During an audit, customers are required to cooperate and provide necessary documentation.
How does Oracle handle payment terms? All fees are due within 30 days of receiving an invoice. Payment terms also include applicable taxes and penalties for missed deadlines.
Is technical support optional for Oracle licenses? Technical support is generally required; support fees increase 8%. All licenses in a set must maintain the same support level.
What happens if we need to terminate our license? Any outstanding fees must be paid within 30 days if the agreement is terminated. Software usage must cease, and any Oracle intellectual property must be removed from all systems.
Under our agreement, who can use the Oracle software? The customer, including its parent company and majority-owned subsidiaries, is allowed to use the software. This is defined in the Customer Definition clause.
Where can Oracle software be deployed? The territory clause defines deployment boundaries. It’s recommended that worldwide usage be included to avoid any compliance issues related to geographical restrictions.
What are limited-use clauses? Limited Use Clauses restrict how and where Oracle software can be deployed, such as limiting to specific business units or configurations.
Can we negotiate pricing for future purchases? Yes, negotiating price hold provisions can help maintain the same pricing for future purchases, protecting against price increases.
What is the Divestment Clause in Oracle contracts? A Divestment Clause allows for continuity of software usage if a portion of the company is divested, ensuring the divested entity can continue using Oracle software.
Can licenses be reassigned within the organization? License assignment flexibility can be negotiated, allowing smoother transitions during mergers or organizational changes without incurring new licensing fees.
How does Oracle address disaster recovery scenarios? Oracle’s disaster recovery terms should be negotiated to allow the software to be deployed in backup environments without additional licensing costs under specific terms.
Are there confidentiality obligations? Yes, information exchanged between Oracle and the customer must remain confidential for three years following disclosure.
What happens if there’s a discrepancy between the OMA and The Ordering Document? The Ordering Document takes precedence over the OMA in case of any discrepancies. It details specific terms for each purchase, making it the controlling document for individual agreements.
