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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The subcluster debate

Running Oracle on a dedicated group of servers within a vSphere cluster, sometimes referred to as a subcluster, is a different matter, however. "Oracle likes to tell prospects and customers that if they are running Oracle on any physical server within a large vSphere cluster they have to license the entire cluster for Oracle. Nothing could be further from the truth," Welch says.

"The contract states that you must license any physical server on which you have installed or are running Oracle binaries. But you don't have to license other servers in that cluster," he insists. "Amazingly, many organizations don't know that."

Welch says he has negotiated on this point many times for enterprise clients. "When we have asked Oracle auditors if they could show us where it says in writing that every server in a vSphere cluster must be licensed for Oracle they said it was an unwritten policy."

Blake concurs. "Overall, the policy does not specifically call out the cluster scenario, so we advise clients to challenge Oracle" when a request is made to license every server in a vSphere cluster, he says.

In some cases, Welch adds, Oracle has asked some customers to license failover nodes in the cluster as well, but you're entitled to leave one node unlicensed, even when every physical server in a vSphere cluster is dedicated to Oracle, he says. Oracle's Software Investment Guide includes what's commonly known as the 10-day rule. "It says that you can run Oracle on an unlicensed physical server for up to 10 cumulative days per year as long as it's a named, designated node, and you fail back."

So why is this happening? Oracle is such a large organization that "people just make the assumption that there's no way that an Oracle account representative could be representing something to an organization that would not be contractual or binding," Welch says.

But he cautions, "Corporations need to examine their licensing agreements rather than just listening to Oracle. And that can include case law searches should a licensee care to check if the largest relational database vendor in the world has ever made any legal filings on this topic."

As to the issue of licensing failover nodes, Welch elaborates: "VMware High Availability accomplishes the same thing as its active/passive HA predecessors such as IBM HACMP, HP Service Guard or Veritas Cluster Server. We never saw Oracle assert [that] the passive node had to be licensed in those legacy clustering technologies. But suddenly it is making a fuss about vSphere clusters," Welch says.

One potential reason for the discrepancy, Welch asserts, could be that those legacy HA failover technologies don't present a threat to Oracle's processor-based license revenue in the way VMware does by enabling massive server consolidations.

Overspending on Oracle

The costs of over-licensing can be substantial, and Welch thinks many customers make unnecessary "donations" to Oracle when it comes to virtualization. "When buying licenses for a new project on a vSphere cluster, we see 150% to 300% overspend on Oracle licenses alone," he says. "This overspend dynamic with respect to VMware is unique to Oracle, in our observation," Welch says.

That's not to say that other enterprise software doesn't present challenges. For example, Microsoft's licensing policies for SQL Server on VMware took a significant turn for the worse with SQL Server 2012. But in that case the heavier licensing requirement was "unambiguously contractual," he says.

One House of Brick client had hundreds of vSphere hosts, only wanted to run Oracle on a few of them and didn't want to divide up the cluster to dedicate one to Oracle. "For that corporation, a national leader in their industry, the ramifications would have scaled into the tens of millions of dollars of unnecessary additional spend with Oracle," Welch says. Executives there are still trying to decide what course to pursue.

Another company, this one in the transportation industry, came to Palisade after finding itself in a disagreement with Oracle over how to count processor licenses in its virtual environment. "In this case we were talking about 60 processors. It was almost a $3 million judgment call," Guarente says. Ultimately the client prevailed. But, he adds, their legal counsel did so in a manner that did not destroy the business' relationship with Oracle.

Blake says Oracle is very transparent in terms of making all of its licensing practices, agreements and pricing available for public viewing online. But, like most hardware and software vendors, Oracle also exerts pressure on its sales force to increase licensing revenue growth for each account, which leads to "opportunistic behavior where they tend to interpret Oracle policies to their advantage," Blake adds.

Unfortunately, even though all of the documents are online, many customers remain unaware of their existence. "They fail to take the time to review them and take a stand," he says.

According to a VMware spokesperson, the overwhelming majority of vSphere customers choose to build separate clusters dedicated to Oracle-only workloads. But Welch says while some Oracle customers may decide to follow that path for business reasons, others may be doing so for what they see as contractual reasons. However, "if the customer decides that they want hundreds of vSphere servers in the fewest number of clusters possible, then it is their privilege to do so," he argues.

If you're not dedicating the cluster, and Oracle challenges you on pricing issues, Blake says, "My recommendation would be to . . . ask them to show you where in the contract you executed with them it asks them to pay a license fee for every server in the cluster."

The confusion over licensing isn't entirely of Oracle's making, says Guarente. In a virtual environment it's fast and easy to spin up a new Oracle server, and it's difficult for Oracle to confirm how many instances are running at any given time. The current environment needs to be compared to the bad old days of customers being forced to use activation codes and hardware-based dongles.

"Customers wanted flexible licensing and Oracle provided it. With that comes complexity," Guarente adds.

But that complexity is easily handled, says Welch. VMware's DRS Host Affinity Rules can restrict a virtual machine hosting Oracle to an Oracle-license vSphere sub-cluster, and there are other auditable ways to restrict a virtual machine to an Oracle-licensed sub-cluster.

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