Oracle License Optimization

Oracle Licensing Services
Optimize your Oracle license investments

LicenseQ helps you maximize your Oracle license utilization and ensure compliance, even as your organization grows and your IT environment changes (e.g., through virtualization). Oracle agreements require proactive management to stay in control of your licensing.

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Top 3 challenges when optimizing Oracle licenses

The fine print is confusing by design

Big software vendors, including Oracle, use complex jargon in their contracts to give themselves an advantage. This is especially challenging for customers who own multiple Oracle products or have purchased the same product over time, as licensing rules can vary widely.

Support fees for Oracle licenses are expensive

Oracle's support fees are typically around 22% of the cost of your licenses. It's risky to be under-licensed, but it's also risky to be over-licensed. If you own more licenses than you need, you're wasting money on support costs. This is a good revenue stream for Oracle, as they make more money on support/maintenance fees than on new software licenses.

Choosing the most beneficial metric

Do you license by processor (CPU * # of cores * "Core Factor") or by named user plus? Processor licensing allows for an unlimited number of users, which is useful for large or uncountable user populations. Named user plus licensing allows you to license by the number of users. The complexity lies in other factors, such as clusters, virtualization, and variations in core types and counts.

The complexity of Licensing and Contracting

Oracle Licensing and Contracting requires focus

If you install and/or use Oracle products and services, then you also have an Oracle License & Services Agreement (OLSA) you have to really understand and manage. Every Oracle client should strive to stay in compliance and optimize their license position with Oracle, not just to mitigate financial exposure and avoid incompliance, but also to maximize IT agility and spend budget on innovation that ensures growth of your business. We combine comprehensive understanding of Oracle’s policies, licensing models and contract terms & conditions, including analyzing compliance across the entire range of Oracle products. Our clients receive unbiased, professional and timely advice that re-enforces their business strategy while taking back control.

Highlights and what you can expect from LicenseQ
  • Discount is the final step during negotiations: the BoM and contractual terms define the future
  • Oracle LMS audit announced or completed? We are your independent and unbiased advisor
  • Know your quantities, environments, licensing terms and cost position, independently from each other to get back in control and be compliant
  • Yes you can run Oracle workloads on VMware while only paying for the Processor quantities utilized
  • Negotiating or Certifying a ULA? We support you to shift the balance of power and make sure the commercial pressure is on Oracle – not on you

If you are interested in what we can do for your case specifically, or if have a generic question; please reach out to us via the button below. We will come back to you as soon as we can.

Oracle licensing: Everything you need to know

Oracle logo

Topics in this guide

  • Key Takeaways on Oracle Licensing
  • What is Oracle?
  • What products does Oracle offer?
  • Oracle Licensing Basics
  • Oracle Database Licensing
    • Oracle Named User Plus Licensing
    • Oracle Processor Licensing
    • What is the difference between Named User Plus & Processor Licensing? 
  • Virtualization Software & Partitioning
  • Other Oracle Applications Licensing
  • Oracle Licensing on Azure

Key Takeaways on Oracle Licensing

  1. It is important to understand the different licensing models for all the various Oracle products and choose the one that is right for your organization. This will help you to avoid overpaying for licenses and ensure that you are in compliance with Oracle’s licensing terms.
    • Enterprise Edition is licensed per core, Standard Edition is licensed per processor, resulting in differing licensing costs
  2. Oracle regularly updates its licensing policies and procedures. It is important to stay up to date on these changes to ensure that you are in compliance.
  3. Oracle has a strict audit process to ensure that customers are properly licensed. If you are found to be in violation of Oracle’s licensing terms, you may be subject to fines and penalties.
  4. The two main Oracle licensing metrics are:
    • Processor licensing: used when it’s challenging to count or verify users, such as in web-based applications
    • Named User Plus licensing: allows you to pay per user, meaning any end node interacting with an Oracle database.
  5. Oracle license mobility lets you move your existing Oracle licenses to Azure, saving you money on licensing costs.
  6. Oracle licensing can be complex, so it is important to seek professional help if you are unsure about anything.

Oracle’s software licensing is notoriously complex. The company’s acquisition of many companies over the years has resulted in a wide range of price lists, licensing options and definitions. Keeping track of changes that may affect your organization can be daunting.

What is Oracle?

Oracle is known for its database management systems to create and manage databases. It specializes in enterprise software, cloud computing and database management systems. Oracle is one of the biggest players in the world of software computing, together with Microsoft, Google and IBM

What products does Oracle offer?

Oracle has a large range of thousands of products and services, incl. hardware, software and cloud computing. Their offer can be categorized in the following:

Overview Oracle product & services categories by LicenseQ

Popular products offered by Oracle:

  • Oracle Database: A relational database management system that provides enterprise-grade scalability, security, and availability.
  • Oracle Cloud Infrastructure: A cloud computing service that provides on-demand computing resources and services over the internet.
  • Oracle Fusion Middleware: A product family of middleware software that enables enterprises to create and run apps.
  • Oracle Applications: A suite of business apps that incl. enterprise resource planning (ERP), customer relationship management (CRM), human capital management (HCM) and supply chain management (SCM) software.
  • Oracle Java: A programming language and computing platform that is used to develop apps for a wide range of devices, including computers, smartphones, and embedded devices.
  • Oracle MySQL: An open-source relational database management system that is widely used for web apps.

The licensing for each product depends on its category and how it is deployed. This results in over 80 license metrics in use today, with many specific to certain products or groups of products.

Oracle Licensing Basics

Oracle’s Software License gives a customer non-exclusive and limited rights to use software. Let’s look at some basic concepts to better understand this:

  • License Types: restrict how a customer can use Oracle software
  • License Metrics: determine how software usage is measured
    • Includes primarily Named User Plus or Processor metric
  • License Term: provides the timeline for customer’s usage
  • List price for a term license is based on a specific percentage of the perpetual license price
  • Add-on products must match the number of licenses of the associated product
  • Functional dependencies may exists among products. Such dependencies must be licensed separately as prerequisite products
  • License actual usage or minimum, whichever is greater

For more detailed information, please refer to the Oracle Global Pricing Site.

What do you need to license?

For Oracle, every server with a processor installed or running needs to be licensed. Production, test, development and disaster recovery environments need to have a license.

What are the Oracle licensing models?

Oracle offers different licensing models for its software products. Some database software is free, for now, but Oracle might change the licensing rules in the future.

Oracle Database Licensing

For Oracle Database, the licensing model is based on two metrics, namely Named User Plus and Processor.

Named User Plus is based on the number of users accessing the software, and it applies to both Oracle technology and application programs.

The Processor metric, on the other hand, is based on the number of processor cores in the servers where the software is installed. It applies to Oracle technology programs.

Oracle Named User Plus Licensing

What is Named User Plus licensing?

Oracle Named User Plus allows you to pay for Oracle software based on the number of users who access it, regardless of whether they are actively using it. In this context a user is any end node interacting with an Oracle database. This metric is typically used for environments where the number of users can be easily counted, such as small businesses or organizations with a limited number of users. Oracle’s licensing policies do not restrict the number of database instances you can install on a server, nor do they differentiate between single server and networked environments. However, all users of all environments must be properly licensed.

Minimum order requirements

The minimum number of Named User Plus licenses you need to purchase depends on the edition of Oracle software you are using. For Oracle Database Standard Edition 2, the minimum is 10 NUP licenses per server. For Oracle Database Enterprise Edition, the minimum is 25 Named User Plus per Processor licenses or the total number of actual users, whichever is greater.

How does Named User Plus licensing work?

Here is an example of how Oracle Named User Plus licensing works:
  • You have a small business with 10 employees who use Oracle Database Standard Edition 2. You need to purchase at least 10 Named User Plus licenses.
  • You have a large enterprise with 10,000 employees who use Oracle Database Enterprise Edition on a server with 4 processors. You need to purchase at least 100 Named User Plus licenses (25 per processor x 4 processors).

Key points to consider for Named User Plus?

  • All devices that connect to the Oracle Database must be licensed, even if humans do not operate them.
  • All humans who use devices to connect to the Oracle Database need to be licensed.
  • If both non-human-operated devices and human-operated devices are connected to the Oracle Database, all non-human devices, as well as all human-operating devices, must be licensed.

When is Named User Plus a good option?

NUP Licensing can be a good option for organizations with a small, easily countable number of users, such as test and development environments. It can also be cost-effective for small environments with limited users.

What are some disadvantages of NUP Licensing?

  • You need to keep track of your users to ensure compliance with the licensing agreement. This can be challenging if your user base fluctuates frequently.
  • Multiplexing software, like an application server, can be a typical “unknown” gateway to uncountable licensing populations, such as web users. This can lead to compliance problems.

Oracle Processor Licensing

What is Processor licensing?

Oracle Processor licensing allows a customer to pay for Oracle software based on the number of processor cores in the servers where it is installed. You calculate the number of licenses required by multiplying the total number of processor cores by a core factor. The core factor varies depending on the type of processor and the server on which it is installed. You can find the core factor table in Oracle’s official documentation. It’s important to note that Oracle has its own processor definition, which may not align with your hardware vendor’s definition. For example, a Standard Edition 2 (SE2) license defines a processor as a socket.

How does Processor licensing work?

All processors in a machine must be licensed if Oracle software is installed or running on that machine. This includes processors in cluster members, remote mirroring machines, and standby machines.

An example of how Oracle Processor Metric licensing works:

  • You have a server with 4 x86 processor cores. You need to purchase 4 Oracle Processor Metric licenses.
  • You have a server with 2 Ampere AltraMax processor cores. You need to purchase 4 Oracle Processor Metric licenses, because the core factor for Ampere AltraMax processors is 2.

When is Processor licensing a good option?

Oracle Processor Licensing is a flexible and cost-effective way to license Oracle software in certain scenarios. This model is typically used for environments where it is difficult or impractical to count or track users, such as web-based applications. Oracle Databases for web-based applications are a common scenario for Processor Licensing. This model allows you to run your web applications on Oracle Database without counting individual users or devices.

  1. Large user base: If many users access your system, it may be more cost-effective to license based on processors than users.
  2. Fluctuating user base: Processor licensing can provide more flexibility if the number of users accessing your system changes frequently.

How to calculate Processor licenses

The number of licenses required is calculated by multiplying the total number of processor cores by the core processor licensing factors specified in the Oracle Processor Table. All fractions of numbers are rounded up.

What are the advantages of Processor licensing?

One of the main advantages of Processor Licensing is that it eliminates the need to count or track users. This can save significant time and effort, especially in large organizations with many users.

What is the difference between Named User Plus and Processor Licensing?

The main difference between Named User Plus and Processor is how each counts usage. The Named User Plus metric focuses on the individuals accessing the software, while the Processor metric focuses on the hardware running the software.

In terms of cost, both metrics have their own advantages and disadvantages. The Named User Plus metric is generally more cost-effective for environments with a small number of users, while the Processor metric is more cost-effective for environments with a large number of users.

Virtualization Software & Partitioning

Oracle’s licensing policies for virtualization and partitioning can be complicated and they depend on different factors, including type of virtualization tech used, number of processors or cores in the server, and number of users accessing the software. Processor Licensing can also simplify licensing in virtualized environments. Instead of tracking the number of users accessing each virtual machine, you can license based on the number of processors allocated to run the Oracle Database.

Oracle differentiates between hard and soft partitioning. Only hard partitions created with Oracle software must be licensed. Soft partitioned servers must be fully licensed. Oracle VM and Oracle Solaris Zones are virtualization technologies for hard partitioning, that can reduce the number of cores that need to be licensed.

Other Oracle Applications Licensing

Three licensing models are available for Oracle applications:

  1. Component Pricing – is based on the number of components used in an application. The price is calculated based on the number of components used, regardless of the number of users or processors. This model is suitable for organizations that use a limited number of components in their applications.
  2. Custom Application Suite Pricing – is based on a pre-defined set of applications that are bundled together. The price is calculated based on the number of users or processors accessing the applications in the suite. This model is suitable for organizations that use a specific set of applications in their operations.
  3. Enterprise Pricing – allows customers to license an unlimited number of users or processors for a specific product or product family. The price is calculated based on the product or product family being licensed, and it provides flexibility to customers who require a large number of licenses.

Oracle Licensing on Azure

Can I bring my Oracle license to Azure?

Yes, Oracle license mobility allows you to move your existing Oracle licenses to Azure, provided you have active Software Assurance. Azure is an authorized public cloud platform for Oracle software. This can save you money on licensing costs, as you can use your existing licenses in the cloud without having to purchase additional licenses. Azure supports Oracle’s traditional on-premises licensing models, including Processor-based and Named User Plus (NUP) licensing. You can bring your own license (BYOL) and take advantage of Azure Hybrid Benefit to save on licensing costs.

How does Oracle License Mobility work?

To take advantage of license mobility, you must first register your Oracle licenses with Oracle. Once your licenses are registered, you can then request to move them to Azure. Oracle will review your request and, if approved, will issue you with new licenses that are specific to Azure. To determine the number of Oracle licenses required on Azure, calculate the number of vCPUs the software is deployed on. Oracle Standard Edition One and Standard Edition 2 may only be licensed on instances up to eight Amazon vCPUs or eight Azure vCPUs. If licensing Database Standard Edition 2 by Named User Plus (NUP) metric, the minimums are 10 NUP licenses per 8 Amazon vCPUs or 8 Azure vCPUs.

What are the benefits of using Oracle license mobility?

  • Save money on licensing costs
  • Increase flexibility and agility
  • Simplify license management
  • Reduce compliance risk