Oracle licensing rules for AWS & Azure

At time of 2017. 

Oracle customers that deploy software in AWS or Azure now have a real challenge with license management following Oracle’s recent change to how it charges users to run their software in these Cloud platforms.

For a long time, Oracle customers have been able to rely on the Oracle Processor Core Factor Table  to calculate how many Database Enterprise Edition licenses are needed when deploying on-premise and/or in the Cloud with Amazon or Microsoft. For most, the intel 0.5 core factor has meant that they simply pay for half as many cores that the Server in question has available.

However, all that has changed as of the 23rd January 2017. Now, “When counting Oracle Processor license requirements in Authorized Cloud Environments, the Oracle Processor Core Factor Table is not applicable”. Read “Amazon EC2 and RDS” and “Microsoft Azure” as the Authorized Cloud Environments referenced.

Let’s look at an example:
Old way – 8 core (16 vCPU) physical intel server or 8 core (16 vCPU) Cloud VM once meant applying the 0.5 core factor and customers were expected to license 4 processor licenses of Database Enterprise Edition.

New way – 8 core (16 vCPU) physical intel server or 8 core (16 vCPU) Cloud VM now means that we ignore the core factor table and customers must license 8 processor licenses of Database Enterprise Edition.

Oracle has essentially doubled the cost of running Oracle Databases in AWS or Azure without actually changing the unit price of any product! The change does not just apply to Database software and covers all the software listed in this link – http://www.oracle.com/us/corporate/pricing/authorized-cloud-environments-3493562.pdf

The guidance found in the “Licensing Oracle Software in the Cloud Computing Environment” document explains that Amazon EC2 and RDS vCPU’s are defined as “…count two vCPUs as equivalent to one Oracle Processor license if hyper-threading is enabled, and one vCPU as equivalent to one Oracle Processor license if hyper-threading is not enabled.” And for Azure: “…count one Azure CPU Core as equivalent to one Oracle Processor license”.

For SE1, SE or SE2 Databases the pricing is based on the size of the Cloud instance. “…instances with four or fewer Amazon vCPUs, or two or fewer Azure CPU Cores, are counted as 1 socket, which is considered equivalent to an Oracle processor license.” Translation: every 4 vCPU’s (rounded up) in Amazon is equal to 1 Processor license and every 2 cores (rounded up) in Microsoft Azure is equal to 1 Processor license.

To contrast this stance with how Oracle allow you to license software in their own Cloud, use the following guidance that can be found in the same Oracle Processor Core Factor Table document here. “When installing and deploying perpetual or term licenses in the Oracle Cloud… you must have a sufficient number of licenses to cover your use in the Oracle Cloud. For this purpose, the following ratios of Processor licenses to Oracle Cloud usage applies: every one (1) Processor license covers use of the program on two (2) OCPUs…(cont.)” “When licensing Oracle programs with Standard Edition One, Standard Edition 2 or Standard Edition in the product name…where a processor license is counted equivalent to an occupied socket, every one (1) Processor license covers the use of the program on four (4) OCPUs.”

Translation: You get twice as much “bang for your buck” in Oracle Cloud than on AWS or Azure.

Note: “An OCPU provides CPU capacity equivalent of one physical core of an Intel Xeon processor with hyper threading enabled. Each OCPU corresponds to two hardware execution threads, known as vCPUs”. Source: https://cloud.oracle.com/en_US/compute/pricing

Q&A

 23rd January 2017

Oracle are yet to provide clarity on this but we do expect that any software provisioned before this date would not be affected by the change. Any new Software that is installed/provisioned in AWS or Azure from 23rd January onwards would be subject to this rule change.

Expect LMS audits to start very soon if you are known to be running Oracle Database workloads in AWS or Azure. LMS will run scripts to identify the Database Creation date and time stamps to ascertain what rules you’re bound by.

No, the same licensing rules will be in force. Note, Enterprise Edition is not available on Amazon RDS.

Oracle’s rules are generally based on exception. Therefore, if Google or any other Cloud provider that you might be using are not listed as “Authorized Cloud Environments” in this document we are to assume that “normal rules” applies.

Unsurprisingly, no. When deploying Oracle software using Oracle Cloud the same rules apply as running on-premise in relation to core factor table, socket, Processor and Named User definitions. Also, for SE1, SE and SE Database Editions customers actually get twice as many cores for the same cost compared to running on AWS or Azure.

No. The documents referenced are for “educational purposes only and provides guidelines regarding Oracle’s policies”. The footnotes at the bottom of each document will provide the appropriate information on how it can and should be used. We are expecting an update to the Oracle Master Agreements and contracts customers sign to account for this change and will confirm as soon as is available.

“Standard Named User Plus licensing applies, including counting the minimums where applicable.” Source: http://www.oracle.com/us/corporate/pricing/cloud-licensing-070579.pdf

Discuss the situation with your trusted Oracle Partner and they can provide advice and guidance on how best to size and shape your Cloud environment to minimise greater cost impact. Oracle have an alternative Cloud solution, which if it wasn’t before, is now certainly much more cost-effective for running Oracle workloads. Finally, Oracle also has a Cloud offering where you don’t need to bring your own licenses (PaaS) therefore this might be even more cost-effective for customers when using Oracle support budgets for new investments.

Author: Jon Lingard

Job Title: Practice Director

Bio: Jon is a member of the Oracle sales team and works with customers from start-ups, SMEs to large corporations to gain maximum value from their investment in Oracle technology. Jon works with the technical and development teams to shape solutions based on customer demands and develops long lasting customer relationships based on his open and trustworthy approach.