Virtualizing Oracle software: Don’t pay for what you don’t need

This is a blogpost in a serie about software licensing published on my site. The other postings in the serie are shown below.

This post will focus on Oracle software licensing in virtualized infrastructures. In the past I did quite a few postings about this subject. There is a lot of misunderstanding about correct licensing of Oracle products when running in a virtual machine. Oracle will not help to make things clear as a large part of their revenue comes from software audits.

Mind as a customer you:

  • your last option is to pay Oracle more money
  • your first option is to inform you about Oracle licensing from an independant expert. Some work on no cure no pay base.
  • can unit using Oracle user groups etc.
  • have a choice. Do not blindly believe what Oracle tells you
  • have a choice to choose another vendor which has clear licensing conditions for a much better price

In short Oracle tactics on software licensing and audits are:

  • be vague about correct usage of software licensing. Leave room for a number of ways to interpret the license.
  • offer discounts at year quarter end (or before fiscal year ends in May) which turn out to be not such a good deal later on (because of commitments on support, multiple products customers do not need)
  • disguide a license audit (benefit for Oracle) as a License Review (“you have been selected for a free license consult/license health check/license review”). Read this BTW other license authorities do the same thing like BSA. It is like the trap of carnivorous plants.
    emember: Oracle will give nothing away for free. There is no such thing as a free Oracle lunch. Remember the house of Larry, his boat etc.
  • perform audits by organizations who get incentives by finding any incorrect licensing (according to Oracle interpretation of license agreement)
  • if customers stop buying Oracle products, give them a visit and audit those customers for software compliancy.
  • demand customer to buy more licenses because according audit customer did not comply
  • if customer does not pay, threaten with going to court. See for some more detail this great blog If IRS Audits Were Run Like Oracle Audits
  • if customer refuses to pay and agrees to go to court: settle the case and let customer sign a NDA about this .
  • acquire many competing companies so customers leaving Oracle will eventually be dealing with Oracle again (Oracle bought 92 companies since 2005) 
  • if media asks for comments: do not comment
  • result:

Pasalide, a license consulting firm, has some interesting experiences described in blogs. An example here titled Doing Business with Oracle, “Everything is Backwards!”

One of my blogs is titled It was on tape, removed but recovered: Oracle supports VMware DRS Host Affinity . It describes about a video taped at VMworld 2012 in which an Oracle employee confirms DRS Host Affinity can be used to subcluster a VMware vSphere cluster. This video however was removed within 24 hours after publication on YouTube. However licensing firm License Consulting captured the video and placed it online.

VMware states in a whitepaper DRS can be used for subclustering according to VMware. I blogged about this here.

Computerworld published a long article about Oracle licensing in a May 2014 blogpost. It is a must read if you are an Oracle customer. It has lots of information like tips on negotiating with Oracle. Some  interesting  quotes taken from the Computerworld article:

(Editor’s note: During the months of reporting this story, we contacted Oracle 13 times, and the vendor’s spokespeople declined to comment on this story on three separate occasions.)

One client called Palisade after installing Oracle database software on two servers in an eight-server vSphere cluster. Oracle discovered the configuration during a software audit and demanded that the customer buy a license for every processor and server in the cluster.Before the audit, the company had been paying Oracle $50,000 per year. The list price for licensing the new configuration: Just over $1 million. The customer ended up reconfiguring the vSphere infrastructure to limit the number of servers in the cluster, and bought more Oracle licenses. Guarente wouldn’t say exactly how much the customer saved, but did say the customer paid a fraction of that original $1 million bill.

Running Oracle on a dedicated group of servers within a vSphere cluster, sometimes referred to as a subcluster, is a different matter, however. “Oracle likes to tell prospects and customers that if they are running Oracle on any physical server within a large vSphere cluster they have to license the entire cluster for Oracle. Nothing could be further from the truth,” Welch says.

But Welch doesn’t think customers should worry about pushing back, at least when it comes to vSphere clusters. “There’s no case law anywhere where Oracle has gone after a customer for subcluster licensing,” he says.

“The contract states that you must license any physical server on which you have installed or are running Oracle binaries. But you don’t have to license other servers in that cluster,” he insists. “Amazingly, many organizations don’t know that.”

The costs of over-licensing can be substantial, and Welch thinks many customers make unnecessary “donations” to Oracle when it comes to virtualization. “When buying licenses for a new project on a vSphere cluster, we see 150% to 300% overspend on Oracle licenses alone,” he says. “This overspend dynamic with respect to VMware is unique to Oracle, in our observation,” Welch says.

Make sure to consult an independant license consulting firm. A simple phone call can save your company lots of money, time and frustration. Some names are:

David Welch of House of Bricks  in the USA
Craig Guarente of Palisade Compliance in the USA
Danniel Hesselink of License Consulting in the Netherlands

You can also contact your VMware representative.

If you cannot negotiate better conditions with Oracle, consider moving to another database. It might not be that complex as you believe it is. PostgreSQL is a serious alternative. It will cost a faction of Oracle while delivering most if not all of the features you use on Oracle. Mind Microsoft is also constantly changing license costs & benefits, to the advantage of Microsoft.

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