One of the most common risk gaps during the lifecycle of Oracle at the enterprise is a lack of alignment. Legacy systems or architectural systems may cost extra in support year after year, but a simple change to the architecture may reduce your support costs. To give you an example, if you have older servers with single core processors and you move to a multi-core environment, you can usually save significant money in your licensing and your annual support costs. Let’s assume a server that had four single-core processors on it licensed singularly, roughly $47,500 for a single CPU license that would be $190,000 ($47,500 X 4 processors). Add 3-years of annual support for another $125,400. So, roughly, your cost of ownership would be $315,400. If on the other hand, you had employed a multi-core environment and used Intel CPUs, there is a factor that is applied in the Oracle licensing which is one-half, so you only need to buy half the licenses for the total number of cores that you have. For the same number of cores, you would be paying exactly half as much. In a three year period, you would save roughly $157,700 which may very well justify going to a different architecture.
Auto renewal on your maintenance and support agreements need to be closely monitored. It is better that you leave the auto-renewal alone, so that you are in a better position to renegotiate each year. It’s at this point that the lack of a central repository or tracking mechanism may become really obvious because without knowing throughout the year when the renewals are coming in, it becomes difficult to budget and it can get you into trouble. It’s important to note that within agreements of Oracle, support renewals may contain their own Terms and Conditions which may alter some of the Terms and Conditions that you fought so hard to negotiate within the original ordering document. It’s really important that you factor in these support renewals and the support costs during the procurement process and scrutinize those during the support renewals. You could end up thinking that this is just a purchasing exercise of support renewal year to year when you actually may be devaluing that big investment you made.
We recently answered that question in SearchOracle.com, where Miro is part of the Ask the Oracle Expert: Questions & Answers column. Here’s the original question and our answer.
Has Oracle changed its policy in licensing databases on VMware? From my understanding, they are treating VMware as soft partitioning. Is there any official documentation with regards to VMware/Oracle licensing that I can refer to?
Yes, in a nutshell it is treated like soft partitioning given that they are not recognizing VMware for purposes of limiting CPUs needing licensing. No, there is NO official Oracle document regarding Oracle’s treatment of VMware, likely because they are still developing their position on the topic.
Why not put your existing Oracle assets to work without having to commit to a large upfront investment?
License rebalancingTM is the art of taking existing licensing – such as Concurrent, Named User, application specific and/or CPU-based licensing – and converting them to generate a new license that is more value to your organization, while creating cost efficiencies. It is possible and very probable that the initial act of rebalancing your Oracle licenses will result in an initial 5-10% savings. Over time, the savings will increase exponentially due to the initial insured lower support cost (which was right-sized due to the license rebalancing acts).
It may seem like you’re only trading in your licensing for something of equal value, but the reality is that you get a greater value by gaining flexibility in your licensing (especially during times of corporate growth or change), same or better Terms & Conditions, and possibly lower annual support costs.
The name of the game is to increase the license value to your organization while possibly reducing your annual support payment without sacrificing benefits. You want to ensure that you have the best value – not just in terms of dollars and cents – which can often turn from short-term savings to long-term pain of having to spend more and more on new licensing every year because the initial purchase/re-up didn’t allow for flexibility for growth.
Retailers are a unique breed when it comes to licensing. We recently worked with a number of retailers seeking to understand their Oracle licensing and they all had a mix of Named User Plus licensing and CPU licensing. With Oracle or any enterprise software for that matter, licensing is about access and authority, but not necessarily limited to people. The latter being an extremely important point to software licensing, usage and retailers.
One of the major differences in the retail industry is the equipment that houses the software application – from point of sales equipment such as registers and scanners to backroom inventory systems. These systems need to be considered as part of the licensing mix and, more often than not (in our experience), the IT executives at retailers overlook them.
So, if you’re a retailer, you may want to take another look at your Oracle licensing inventory.
The name of the game with any software licensing agreement is to get the best deal, but most executives equate this to discount. And, while we love discount, you always have to look at the longer term pitfalls or benefits. Much of the time, a sales rep offering you a discount – say 20% – on a large enterprise agreement negotiation, it sounds great. But, when you look at how software licensing works, the changing dynamics and business goals of a company and the upcoming changes (and, boy, are there a lot of those at companies today), that 20% discount may save you in the short-term, but in the longer term, you’ll end up spending more because you haven’t planned for the long game and there is little or no flexibility in your software license agreement (SLA).
So, what should “getting the best deal” from your software vendor mean? Yes, sometimes it does mean getting the best price. That’s definitelya factor, but you also have to look at:
Flexibility and scalability
Ensuring best Terms & Conditions (this is probably the most important factor)
Lowering your annual costs (e.g. support and maintenance) – which means you have to look at proactively managing the initial purchase carefully otherwise you end up with an ongoing annual payment for licenses you don’t need or use
Correctly match the appropriate licensing scenario to each organization (with Oracle, there are too many factors that could increase or decrease cost)
If you pay attention to all of the above, you will get the best deal – from best pricing to best value.
One of the most common risk gaps during the lifecycle of Oracle at the enterprise is a lack of alignment. Legacy systems or architectural systems may cost extra in support year after year, but a simple change to the architecture may reduce your support costs. To give you an example, if you have older servers with single core processors and you move to a multi-core environment, you can usually save significant money in your licensing and your annual support costs. Let’s assume a server that had four single-core processors on it licensed singularly, roughly $47,500 for a single CPU license that would be $190,000 ($47,500 X 4 processors). Add 3-years of annual support for another $125,400. So, roughly, your cost of ownership would be $315,400. If on the other hand, you had employed a multi-core environment and used Intel CPUs, there is a factor that is applied in the Oracle licensing which is one-half, so you only need to buy half the licenses for the total number of cores that you have. For the same number of cores, you would be paying exactly half as much. In a three year period, you would save roughly $157,700 which may very well justify going to a different architecture. 
