Oracle Stops Selling Term Licenses Longer Than 1 Year

Oracle has stopped selling term licenses other than single year term licenses for most of its Technology products.

While current holders of multiple-year terms will not be affected, at least until their current terms expire, only one (1) year term licenses will be available for Database, including many Options, like Diagnostics Pack & Tuning Pack, some Oracle Middleware  (including WebLogic), and Exadata Storage Server Software.

Oracle has stated that the sale of term licenses has decreased over the years. This move is likely related to Oracle’s intent to move many of its customers to Oracle Cloud Infrastructure (OCI).

There was previously a prorated license cost associated with term licenses.

• 1 year term: 20% of list license cost
• 2 year term: 35% of list license cost
• 3 year term: 50% of list license cost
• 4 year term: 60% of list license cost
• 5 year term: 70% of list license cost

The cost of support fees were also based on the list cost of the license. This is because there is no difference in the support requirements of the term license versus a perpetual license. The support cost is 22% of the license cost. In the case of a single year term, the organization will actually have to pay more for support than for the license itself.

This has an impact in two ways:

1. Should organizations need to run a parallel environment during hardware upgrades or consolidation projects, term licensing may become necessary. However, this effort cannot exceed one (1) year! Otherwise, the license owner would have to purchase a subsequent single year term license or a perpetual license. At 20% per year, that is 5% more for the licensing cost than a traditional two (2) year term license.
2. Previously, Oracle clients could often settle an audit finding where they had used a product which they didn’t have a license for, by purchasing a term license for temporary use while they decided to either stop using it or purchase a perpetual license. Provided that there is no intention to continue using this product and the historical use period is less than a year, a single year term license would be sufficient. If this period were to exceed one (1) year, more expensive perpetual licensing would become necessary.

Miro urges Oracle customers to be aware of this change, and to plan and execute hardware upgrades and consolidations very deliberately. Miro can perform an assessment of deployments before an Oracle audit to help ensure your organization is properly licensed.