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.

Contract analysis is a crucial part of managing your Oracle licensing agreements. While many IT managers are accustomed to just ordering licenses online and calling it a day, there is much more to the process in order to get the best ROI.  Oracle licenses can vary a great deal especially based on when you bought your licenses. Oracle, in fact, is trying very hard to standardize their licensing with both their older and newer client base.  The newer licensing agreements may favor Oracle, which is why it’s very important to review your SLAs to ensure that you are not signing away important rights and privileges you had previously. You also must be aware of what your business needs are and how they have changed since you signed the original SLA, for example, if you require more licenses than you did the three years before when you signed the agreement with Oracle.

During new discounts and promotion, there is an opportunity to benefit from reviewing the needs of the enterprise, your Terms & Conditions and possibly initiate a contract re-negotiation.

Successful contract license management is a key factor in remaining in compliance.

Here are the key steps in the process:

·         Forecasting – looking at what is needed and getting the necessary approval. In this step you must also be sure that your licensing meets your architecture.

·         Negotiation – Go in and negotiate with your vendor, this can be done at anytime and the process will vary depending on what you need.

·         Repository – Update, update, update! Be sure to continuously update your repository to be sure that you are in compliance. The repository will give you the foundation for determining whether you are in compliance and give you the centralized database that everybody in the company who has their hand in it will know what is going on. A thorough repository will also keep you prepared should you face an audit.

One of the big benefits of having a repository, an inventory of your licensing, is to better leverage the flexibility of your license types. 

Procurement is a tough job from any perspective. You have multiple requests at once for some kind of technology investment, which must be run through various channels, negotiated (if at all) and then implemented. We find in many cases that the job is made more difficult by a lack of policies in place. Policies are, in many cases, either not in place, not well implemented, or not being communicated.  Managing procurement with vendors like Microsoft and Oracle, in some cases, will require its own dedicated person within the organization. This function requires somebody with a lot of specialty to keep up with the frequent changes within Oracle.

One easy improvement that can be made within a procurement process is to have a system in place for analyzing software and hardware contracts as they arrive. Standardized processes are also extremely helpful. In the case of companies that are the product of consolidations or mergers, each company will have different processes which are badly in need of consolidation.  It is important to have a real compliance management process with definite policies and enforcement in place. To help with your internal compliance, you need to have some means of doing an internal audit on a relatively frequent basis. If you can’t manage this process internally, outsource it.

With software and hardware vendors, timing is everything in terms of negotiation. With a strict set of policies and procedures in place, your procurement department will be better prepared to respond in a timely fashion and take advantage of quarter and year-end concessions and discounts. Planning and forecasting your needs is also a vital part of this process, but a lack of policy is the most common issue with procurement, a flaw that can end up costing organizations a lot of money.

Just when you think you have everything in order, another new Microsoft release comes out and you are faced with the decision of whether or not to upgrade or just stick with what you have installed. The option of upgrading to the new Office 2010 has many organizations pondering whether or not they really need it, and can sacrifice the costs to do so, especially considering the current economic climate.

For those organizations that have Software Assurance (SA), you are in luck. You may not need to pay to upgrade as its part of your SA contract. Those that opted out of SA, or smaller businesses that are buying their software from the local Staples of Office Depot are facing a significant spend to upgrade. There is, however, a loop hole. Yes, a Microsoft loop hole! If you currently have Office 2003, you should consider upgrading to Office 2007, and then to Office 2010. Because Office 2007 offers upgrade pricing, which gives you a discount not available with Office 2010, you could save as much as $200 per installation.

If you want to upgrade from Office 2003 to Office 2010, you have to buy, install, and validate a copy of Office 2007. Then you will get a free upgrade from Office 2007 to Office 2010. So, you can move from 2003 to 2010 for the discounted cost of moving from 2003 to 2007. The only downside is all the extra installation time and effort.

Two things to watch out for when considering this move on the licensing front – pay attention to each version and the licensing terms. You may need to buy a specific version of 03 and/or 07 in order to qualify for the right free upgrade. If you really want to upgrade, and save some money while doing so, make sure you have copies of Office 2007 handy, or get them while the getting is good!

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.

New 8 and 12-core processors…what does this mean for Oracle and Microsoft?

Why not put your existing Oracle assets to work without having to commit to a large upfront investment?

License rebalancing^TM 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.