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How Oracle Licensing Is Affected By Current Business / Industry / Technology Changes

Now more than ever decision makers are faced with difficult choices. A number of factors may be affecting your business, including loss of revenue due to pandemic, shift to remote collaboration, pressure to move to the Cloud, and striving to stay on top of industry and technology changes.

Most of these decisions would likely have software licensing implications.

Here are a few examples:

Move to the Cloud:

When choosing between on-premise, hardware hosting provider or Cloud platform, a proper comparison of total cost of the Cloud solution (full Cloud subscription model or a combination of Cloud and software cost) vs. on-premise/hosting cost of hardware and software is a prudent thing to do. Although some companies go for complete move to the Cloud or choose to stay entirely on-premise, many opt for a hybrid solution.

  • Will your move to the Cloud result in licensing shelf ware or is there a way to utilize your on- premise licenses?
  • Some solutions allow for use of on-premise licensing to partially offset Cloud cost (e.g. a number of Oracle BYOL PaaS solutions, though not all);
  • Oracle SaaS solution typically allow for “shelving” of unused licenses, but you should consider if this is the best option for you;
  • When contemplating “lift and shift” your applications to IaaS Cloud (OCI, AWS, Azure… are among the main players in the market for Oracle products deployment) – you must consider differences in the Oracle license counting methodology;
  • Oracle SaaS solutions: thorough POC is recommended since Oracle Fusion Cloud solutions are very different from on prem offerings – they may include additional features, but some may lack flexibility and ability to customize certain usage aspects you may have made to your on-premise E-Business solution;

Shift to hardware hosting company or a new data center:

Additional licensing requirement may be triggered by migration from old to new hardware, which is often overlooked by many decision makers and IT personnel. A few things to consider when making the switch:

  • Does the hosting company have the ability to hard partition and isolate your environment for license counting and security purposes?
  • Will an intended hard partitioning method be accepted by software vendor?
  • Are you shifting to a different hardware/OS platform than currently used on-premise? This may change your licensing requirements.
  • When moving your Oracle environment from the old data center to the new one, are any server or license upgrades done during the move?

Pandemic related changes:

Many businesses are faced with the harsh reality of the need for downsizing: reducing the number of employees, moving to a smaller office space or to an entirely remote operation, or forced to adjust production based on changing demand or even switch to a different industry.

These changes may affect Oracle licensing in various ways, for example:

  • Downsizing may create licensing shelfware and the need to do something about it; many companies are not aware of the various ways to utilize shelfware.
  • When looking for efficiencies, a move to the Cloud may seem like a good idea, but will it truly bring cost savings or only ease of software management? Ongoing subscription cost may in fact turn out to be higher in the long run than on-premise deployments.
  • Reorganizations or switches to a different company profile/industry may bring the need for M&A activity. When acquiring or divesting an entity the impact on software licensing should be an important consideration. Mergers, acquisitions and divestitures may trigger additional licensing requirements. The extent of the impact on software licensing depends on specific contractual language in Oracle’s agreements.

Moving to a virtualized platform:

This move may either reduce or increase licensing requirements depending on how license counting is affected, if the old and/or new environment is hard partitioned utilizing an approved Oracle method or not.

Most common virtualization platforms and a potential for hard partitioning:

  • OVM: popular Oracle virtualization available on Linux and Solaris requires a very specific way of hard partitioning to be recognized under an audit by Oracle;
  • VMware: another widely used virtual platform where Oracle does not recognize software abilities to hard partition, however, there are other Oracle accepted methods to reduce the number of licenses required and avoid licensing a large number of servers/clusters that are not actually used for Oracle products.
  • Exadata: together with ODA, most popular of Oracle’s engineered systems. Exadata can be virtualized and hard partitioned under Oracle’s Trusted Partitions model, it is also scalable with Capacity on Demand.
  • IBM LPARs: assuming proper configuration and license counting methodology, they are recognized as an approved method of hard partitioning.

It is always best to get Miro involved when you are in the planning stages for an upcoming change as we are then best positioned to give you several alternatives based on your needs and situation. However, we can still guide organizations even if you have already made the changes and are now looking to understand your overall software compliance status.

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