An Oracle Unlimited License Agreement (ULA) is an arrangement in which an enterprise pays a single up-front fee to get as many licenses as they want for a specified set of Oracle products over a fixed time frame.
The most common ULA term is three years. At the end of that period, the enterprise must provide Oracle with documentation detailing the deployment of all Oracle products used. Oracle processes this information to determine the number of regular licenses to grant. For enterprises that grow during the prescribed time frame, the ULA can offer considerable cost savings compared with purchasing individual licenses up front. However, if the organization downsizes during the ULA term, it may end up overpaying for the licenses that it actually purchases in the end.
The issue of whether or not an Oracle ULA actually provides any overall benefit has given rise to controversy. The advantages of the ULA are cost savings, convenience, and simplicity. The agreements work best for companies that expect growth through normal business operations rather than through mergers and acquisitions. Oracle shops can get an array of Oracle products bundled together under one agreement and one bill, rather than a mishmash of complex licensing agreements for each product.
The drawbacks are "putting all eggs in one basket" and the need to negotiate intelligently and aggressively for favorable terms. Depending on the language in the contract, the ULA might not apply in certain situations that a careless enterprise fails to foresee, in which case the ULA does not in fact turn out to be truly unlimited in the long term.