Virtualization and private clouds have delivered hardware savings in a big way for most enterprises. Software savings, however, are proving more elusive, and that's been particularly true when it comes to virtualizing Oracle databases, according to several sources.
While virtualization has enabled server consolidation ratios of 3:1 or more, businesses may see little or no reduction in associated software costs. In some cases enterprise software licensing can be so expensive that it overshadows the cost of the rest of the system stack combined, says David Welch, chief technology officer at House of Brick Technologies, an integrator with expertise in Oracle software licensing issues.
(Editor's note: During the months of reporting this story, we contacted Oracle 13 times, and the vendor's spokespeople declined to comment on this story on three separate occasions.)
Some consultants and a handful of IT executives say they face licensing obstacles with many enterprise software vendors, but Oracle agreements can present some of the most confusing compliance issues, especially for customers that fall under Oracle's processor-based licensing models. "Using Oracle on VMware provides no licensing savings, just operational cost savings," says R Wang, principal analyst and CEO at Constellation Research.
"Virtualization is an area where customers get creamed all the time," says Craig Guarente, CEO of software auditing and compliance consultancy Palisade Compliance. Both Guarente and Welch say that, all too often, organizations end up overpaying for new Oracle licenses as well as software maintenance after consolidating servers or adding new licenses in a virtual environment.
Several IT executives contacted for this story declined to speak on the record. One executive, "Tom," has dealt with Oracle as the CIO for several Fortune 500 corporations, and agreed to speak only on condition that his name and company affiliation not be used. "Part of the challenge is knowing what others are paying," he says, and that information is considered confidential. But professional negotiators can be helpful because they know what the average company is paying for any given product, he adds.
Some Oracle customers are "p.o.'d" about virtualization, Guarente says.
Negotiating with Oracle: Experts' tips
- When executing an Oracle software license agreement, visit the Oracle contracts page and print out or store copies of all online policy documents to which the contract refers as a class.
- Be sure to include the Oracle Partitioning Policy document (PDF), Oracle Processor Core Factor Table (PDF), Software Investment Guide, Licensing Data Recovery Environments (PDF) and Oracle Software Technical Support Policies (PDF). These have information not otherwise specified in the customer's Oracle Software Licensing Agreement (OSLA).
- The documents can change over time, so it is important to have copies of the policies that are in force at the time the OLSA is executed.
- For more information on Oracle licensing in a VMware environment read the VMware white paper, "Understanding Oracle Certification, Support and Licensing for VMware Environments" (PDF).
- Avoid overspending on new Oracle licenses when moving servers to a virtual environment, especially when it comes to vSphere clusters. Oracle may ask users to pay a licensing fee for every server in a cluster — not just the servers where the Oracle products are installed and/or running — "but that condition is not spelled out in the software license or associated policy documents," says Guarente.
- Inventory your Oracle licensing paperwork before starting a server consolidation project to see if you can allow maintenance contracts to lapse selectively for Oracle licenses associated with retired physical servers. Note that Oracle's contracts group individual licenses within so-called license sets. Oracle's matching support levels policy states that you can't cancel maintenance and support on a subset of licenses within a license set without also cancelling those licenses. That may trigger a re-pricing for the rest of the agreement. So renegotiating the contract may not save you any money.
- Carefully consider the implications of any invitation to migrate all of your Oracle licenses into a single agreement. Such initiatives rarely work in the customer's favor, professional negotiators say. Keep Oracle software licensing contracts separate whenever possible for maximum flexibility. Also keep in mind that Oracle's License Sets policy works against allowing maintenance and support to lapse on all product licenses within a given Customer Service Identifier (CSI).
- According to what's commonly known as Oracle's 10-day rule, you're entitled to leave one node unlicensed in a vSphere cluster — even if you dedicate every other physical server in the cluster to Oracle — for up to 10 cumulative days, so long as that node is named as a designated failover node. The failover node must also share a storage array with the source node. See Oracle's Software Investment Guide and Licensing Data Recovery Environments documents for details.
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