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

Robert L. Mitchell | May 8, 2014
Squeezing software cost savings from virtualization projects is tricky for lots of reasons, but can be particularly challenging when it comes to Oracle databases. Here's why, and some tips to help.

Oracle organizes licenses into license sets, says Welch. For example, all Oracle Database licensing tiers — Standard One, Standard Edition and Enterprise Edition — form a single license set. According to Oracle's matching service levels policy, you cant cancel maintenance and support on a subset of licenses within a license set without also cancelling those licenses. "Should the licensee desire later to use those licenses, they would have to purchase them from scratch, not just renew maintenance and support on them," Welch says.

Whats more, says Guarente, "If you terminate, then there's a re-pricing," and that doesn't always work in the customer's favor. For example, Oracle may remove previous discounts and raise prices, with the result that "the new price might be exactly what you paid [before]," he says.

Bill, the Fortune 500 company CIO, says no one should be surprised that they can't selectively cancel maintenance on individual processor licenses without canceling the entire contract and renegotiating. Package deals have offered substantial volume discounts, and when you go that route, "it's all or nothing," he says.

But contact prices have gone up, Bill acknowledges. His maintenance amounts have risen to 22% of the original license purchase — his contracts originally started at 15% — and his discounts are much smaller than what was offered in the past, he says, though he declined to say by how much. So he's shifted away from big software contract packages in favor of making smaller buys and keeping those contracts separate.

"The more segregated your paper is, the better," Welch agrees. But many organizations have taken Oracle up on an offer to do a "migration" of their existing paper to pull everything together into one neat, tidy contract. "It's rarely in the customer's interest to do so," he claims.

Tom, the other CIO, has been down that road before. "It ended up being a zero-sum game," he says. "You're not going to get tremendous value out of it."

Fear factor

Many organizations don't want to make waves against the vendor of software on which their core business runs, especially one that has a reputation for being litigious. But Welch doesn't think customers should worry about pushing back, at least when it comes to vSphere clusters. "There's no case law anywhere where Oracle has gone after a customer for subcluster licensing," he says.

Guarente offers more measured advice. "I haven't heard of anybody being sued, but people are very afraid. Talk to your attorney," he says. Ultimately, he says, "My experience is that most customers buckle." His advice: "Don't go wobbly." There's simply too much money at stake.

For his part, Tom is cautious about pushing back too hard. "The next time you do any negotiation with them they're going to remember you pushed back on this, and it will come back to hurt you." Here's his strategy: "Try to figure out where you can extract concessions. Know when they're under pressure and when they're not. It's like a chess game. Individual moves don't win the game. It's your overall strategy that counts."


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