Part 1: How to Maximize Return on Your Oracle Investment

Part 1: The complexities of Oracle licensing and how best to assess what you have versus what you need.


The Procurement Challenge

Procurement organizations are often tasked with minimizing the purchase cost of each individual hardware and license item. Although that’s certainly helpful, when IT teams assemble their solutions, they may not be aware that the combination of technologies they have chosen could drive their Oracle cost of ownership higher than it needs to be.

As organizations grow, often so do their license needs, but in the majority of cases IT managers aren’t absolutely sure whether their licensing is in proper compliance.   When licensing accuracy is unclear Oracle may need to request validation, and potentially may audit.  When this occurs organizations can easily discover a shortfall in one or several license types, suddenly exposing them to potentially several hundreds of thousands of dollars in new license spend to “true up” and back pay this shortfall.

Oracle customers are not alone in these exposures.   I oversee a number of system integration projects each year, and over the last 12 months (as is typically the case every year) two investment projects were cancelled abruptly because another enterprise software manufacturer presented a large (and unbudgeted) compliance bill.


(Mis-)Understanding Oracle Licensing

Oracle licensing, especially for database and middleware, is not for the faint of heart. Licensing calculations for these items depend on multiple layers of the stack. Not only do IT managers need to know how many databases they have and what editions they are, but also which virtualization platform they are on, what resources have been attributed to the VM they are in, what kind of server it sits on, how many cores it has, and details about the server farm it resides in – and more!

Typically, software asset management tools can indicate where you have deployed a product, but they cannot calculate how many licenses that product is consuming. And these tools don’t track how many Oracle licenses you have purchased. You need to look for another alternative.

In order to accurately understand, count and analyze your Oracle license usage for database and middleware, you’ll need to understand a few concepts:


Things Are Not Always What They Seem

Oracle licenses their software by Processor (Proc) or By Named User Plus (NUP) but these are not what actually what they might seem to be:

  • A Proc actually means a core if you are buying Enterprise Edition (EE) software. If you are buying Standard Edition (SE) software a Proc means a “socket” (CPU) – so it really is a processor.
  • A NUP actually means a human user, or a non-human operated device. Please note that there are minimum numbers of NUPs you need to buy depending on the software and edition you are deploying. For instance Database EE requires you to buy a minimum of 25 NUPs per core, Database SE requires you to buy a minimum of 5 NUPs per socket, and Database SE2 requires you to buy a minimum of 10 NUPs per server.


Not All Servers Are Equal

When running Enterprise Edition software, the number of licenses required is actually calculated by multiplying the number of cores used for the software, by the Oracle Core factor multiplier. What’s a core factor multiplier (CFM)? Basically the CFM is an attempt to equalize the delta in processor power and architecture across a variety of compute platform alternatives for purposes of Oracle software licensing. For instance:

  • IBM P-series servers have a CFM of 1.0. To run 8 cores of WebLogic Suite on this server, you need to license 1.0 x 8 = 8 licenses
  • Oracle SPARC servers generally have a CFM of 0.5. To run 8 cores of WebLogic Suite on this server, you need to license 0.5 x 8 = 4 licenses.  You can save a lot of money on licensing assuming the workload and throughput requirements meet your needs.


Not All Virtualization Layers Are Equal

Different virtualization technologies segment or partition server resources in different ways. Depending on the virtualization technology, Oracle can determine whether it meets their segmentation rules (typically referred to as hard partitions), allowing them to determine or limit the number of Oracle Processor licenses on a given server. Simply stated, some technologies get the thumbs’ up and others do not.

  • Those who do get the thumbs up allow customers to only license cores attributed to the VM running the licenses. For instance, IBM’s LPAR and DLPAR virtualization technologies, and Oracle’s own LDOM partitioning, are certified for hard partitioning
  • Those who don’t will require customers to license all the cores on the SERVER, and possibly all the cores on the SERVER FARM. For instance, using IBM processors in TurboCore mode or using IBM Power VM Live Partition Mobility are not certified for hard partitioning


Don’t Forget The Bundles

You may have deployed a database or WebLogic server, but it might have been included in another bundle. For instance, in many cases customers who have purchased Oracle’s eBusiness Suite will have also been granted restricted use licenses for Oracle WebLogic server, Oracle Database, and Database Partitioning.


Need a Tylenol? Unfortunately, licensing calculations are even more complicated than this – there are several other rules and exceptions to understand in order to be able to do the proper license number crunching.


Taking Control of Your Situation

In order to understand your Oracle licensing situation, you will need to compile an inventory of the Oracle software deployment on your infrastructure – and the full IT stack that this software is residing on. You’ll need also to pull together a list of your Oracle licensing contracts. The goal of this process is to answer the questions “What do I have?” and “What do I pay for?”  Then with some Oracle licensing expertise, you can perform a reconciliation and determine your license surpluses and shortfalls.

If you have a small Oracle deployment, you may be able to perform this discovery and reconciliation manually. But if your Oracle assets are deployed on more than 20 or 25 VMs then a more automated way is strongly advised. Manual discovery can be tedious, and reconciliation calculations are complex – and it’s easy to make errors.

Most software asset management tools generally cannot collect, compile and calculate all the necessary information to build your reconciliation, however there are one or two niche products that do.

Eclipsys has partnered with the company that has developed EasyTrust LM software, which is not only Oracle LMS certified (Oracle recognizes the output of this tool as accurate), but which also helps automate the reconciliation, and provides tools to explore options on how to optimize your Oracle spend. The combination of Eclipsys’ Discover, Reconcile and Optimize process and licensing expertise along with EasyTrust LM software allows us to help customers get the most out of their Oracle spend – and Eclipsys has helped over a dozen customers save millions of dollars.


What’s The Value?

Information is power. The goal of discovery and reconciliation is to transform your IT data into a powerful tool that can help you make insightful business decisions. And at $58,000 (list price) per database core, it’s not a significant leap to know why you need to invest a little time and effort to review your yearly licensing spend and to relook at your tech stack decisions to see if you can do better.

Buy only what you need – and what your organization needs to grow and excel – ensuring that you invest in the right software to match the performance, security, reliability and scalability challenges you will have along the way. Hey, that’s why you chose Oracle in the first place!


Next Installment: Top 5 Ways to Optimize Your Oracle Investment and Reduce Your License Spend

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