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

Moving Oracle databases to virtual infrastructure may not result in software savings. Here's why, and what you can do about it.

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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.

That's unusual, says Welch. "We haven't noticed other enterprise software vendors that assert the full-cluster licensing claim," he says. Oracle's per-processor licensing fees start at $47,500, so charges can add up quickly. To make matters worse, the customer had also unknowingly installed the more expensive Enterprise Edition of the Oracle database instead of the Standard Edition.

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.

The company could have achieved the same goal without paying anything additional had it reconfigured the cluster to run Standard Edition before the audit took place. Or it could have gone back to Oracle and bought more licenses, Guarente says. "The first option would have resulted in no additional fees to Oracle. The second would have resulted in some fees, but far less than what they ended up paying."

Bob Clarke, manager of enterprise services for the Office of Technology in the State of Indiana, is considering his options for saving money. Like the customer described above, he also faces the requirement to license every core and server in the cluster.

"It gets very pricey," he says, but he hopes to make the numbers work by consolidating some of the existing licenses for Oracle software used by separate departments. "We will create a vSphere cluster that's dedicated to Oracle. We will comply with their licensing by doing it that way," he says.

But user experiences vary widely. "Bill," a CIO at another Fortune 500 company who also asked not to be named, says he has never been asked to pay to license every core in a server used in a virtual environment when not all are running Oracle, nor has he been asked to buy Oracle licenses for every server in a vSphere or any other virtual server cluster.

The key is in the negotiations and the customer's relationship with Oracle. "It's battle. You have to work hard," he says, but he's always been able to negotiate a satisfactory contract. Then again, he admits, he's never been through an audit.

Being asked to limit vSphere clusters just to Oracle isn't always efficient, especially for large data centers, and it's not necessary, professional negotiators say. "There is nothing in the contracts that say you have to pay for all the servers in a cluster," Guarente says. Although the software vendor has published separate policy documents that attempt to address this issue, Welch says there's nothing in black and white to back up the assertion that every server in a vSphere cluster must be licensed if Oracle software is installed or running on any one of those servers.

"The biggest issue for me is that these documents are not part of the contract the customer signed," says Guarente. "Oracle has very interesting policies around virtualization, and none of those policies are located in the contracts."

The problem with soft partitioning

One of the most relevant policy documents on the matter, the Oracle Partitioning Policy (PDF), distinguishes between hard partitioning and soft partitioning technologies with respect to licensing. With hard partitioning, customers can limit the number of processor licenses needed to those running Oracle. With soft partitioning, they cannot.

Oracle defines Microsoft Hyper-V and VMware as soft partitioning, although many technologists will argue that the features and methods used in VMware are no different than those that appear in Oracle's list of hard partitioning technologies, Guarente says. "Given that this is a competitor's offering, Oracle will always consider this as a form of soft partitioning," he explains.

The one exception, he adds, is under Microsoft's Windows Azure cloud offering, which uses Hyper-V. In that case, Oracle can be deployed within a virtual machine and the customer pays only for the resources used. "The reliance is on the provider to control the size of the virtual machines," he says.

Even if the customer's software license refers to the Partitioning Policy, that document includes a note stating that the policy "is for informational purposes only," and "does not constitute a contract or a commitment to any specific terms."

So does the policy apply or not?

Guarente says when he challenged one contract based on published policy material for an organization Oracle was auditing, he received that very same response from License Management Services, Oracle's auditing group. "They came back to us and said the documents were for educational purposes only and not binding. Fascinating." That business was able to successfully defend its position with Oracle, he adds.

"It's the art of working with Oracle versus the science of compliance. It's all very muddy," Guarente says. Furthermore, the list of approved hard partitioning technologies typically does not appear within the list of documents referenced in the Oracle Software Licensing Agreement (OSLA) that customers sign, says David Blake, CEO at UpperEdge, an IT sourcing consultancy.

Nonetheless, if one follows the Oracle Partitioning Policy, every processor and core within a single physical server must be licensed for Oracle in a VMware environment, even if the Oracle software is installed or running on just one core. House of Brick's Welch tells his clients to pay to license every processor and core in that situation. "We tell everyone that Oracle is right. That policy has been there since 2002," he says.

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