Oracle database licensing & pricing

Note:  This literature review is a collection of information from Oracle and news sources on 23 August 2005.  The license rules change frequently (as a result of the quickly-changing hardware), so this August 2005 survey may not apply to your special cases.

Also see my notes on Oracle standby database enterprise and standard edition.

Overview of Oracle Store License rules

The Oracle Store web site has complete MSRP prices for Oracle database licenses.  As of August 2005, Oracle has two pricing models, "named user plus" and "processor".  Historically, Oracle has also sold "unlimited use" licenses for large corporations, but they are not mentioned on the Oracle Store web site.

• Named User Plus - This is a pricing model that factors minimum numbers of users.
   
• Processor - The processor license pricing model is based on the number and type of processors on the Oracle servers.

Oracle licensing and replicated databases

Many Oracle shops are now using Oracle replication tools (Oracle Streams, standby database, data guard, multi-master replication) to create a standby Oracle server as protection against hardware failure.  However, many Oracle shops forget that all “hot” standby servers (where you use the standby server for Oracle transactions)  may require an Oracle license. 

This Oracle license pricing document (as of March 16, 2006), notes that mall standby and failover database must be fully licensed if they might be used as production:

"Standby – In this type of recovery, a copy of the primary database is maintained on a separate server at all times. These systems are configured for disaster recovery purposes. If the primary database fails, the standby database is activated to act as the new primary database.

In this environment, both the primary and the standby databases must be fully licensed."

Oracle standby servers need to be fully licensed if they are “hot standby” servers that can be used for production SQL queries.  Some sources say that cold standby servers used less than 10 days per year do not need to be licensed, but you should verify this with your Oracle representative or the Oracle Store, as Oracle license policies change frequently.

Suggestions for getting the best deal on Oracle licenses

Even though Oracle licensing agreements allow Oracle corporation to perform license audits, most Oracle shops are honor-bound to pay for the databases according to their license agreement. 

Don't pay for more Oracle licenses than you need

There's an interesting February 2004 article over on the IT Manager's Journal about Oracle licensing and support, suggesting that many shops are paying for more licenses than they use.  There is also this 2003 article titled "Oracle is Putting the Support Screws to Customers" with similar recommendations.

Plan your Oracle architecture to minimize Oracle license charges

With proper planning you can save a great deal in license fees while keeping high database performance.  Some suggestions for processor-based licensing include:

• Consolidate Oracle production environments - In shops with many production database running on separate servers, and consolidating the instances in production can save thousands of licensing dollars.  With Oracle server consolidation, buying large SMP servers (i.e. an Intel Linux 16-CPU UNISYS ES7000) and moving dozens of Oracle instances onto a single monolithic environment is ideal because CPU resources can be transparently shared between Oracle instances.  Of course, server consolidation requires high-speed network connectivity from all application areas, so this may not be appropriate for widely distributed shops with sporadic network latency.
   
• Use dedicated Oracle servers - Oracle does not give you a discount if you run other applications on the same server with your Oracle database. Keep your Oracle servers isolated and only use as many processors as you need for high-water-mark processing.
   
• Buy fast processors - Oracle licensing does not distinguish between fast and slow processors.  The super-fast Intel Itanium2 64-bit processors can have double the processing power of older CPU's.
   
• Maximize processor resources - You may be paying too much if you have many Oracle servers with a small average CPU consumption.  You can compute high-water-mark (HWM) CPU consumption in Oracle 10g AWR reports or with UNIX or Linux vmstat utility, but it is important to consider the high-water-mark for CPU consumption, especially if your shop has service level agreements (SLA) for fast response time.  For example, four production servers with one CPU and a HWM of 20% CPU might comfortable fit onto a single server, thereby freeing-up three processor licenses.

Let's examine the Oracle licensing literature on processor-based Oracle licensing for multi-core processors..

Multi-core CPUs and Oracle "Processor" licenses

A dual core chip is a processor that contains more than one processing unit.  This Washington Post article titled Dual-Core Chips Help Processors Share Load, dated June 5, 2005 we see a good description of he reasons for multi-core processors:

Both AMD's Athlon 64 X2 and Intel's Pentium D use "dual-core" designs that put two processors on a single piece of silicon, divvying up the work between the pair.

In a July 14, 2005 new item titled Oracle Shifts Multicore Licensing Model, the new CPU chips by AMD, Sun and IBM.

Following months of anticipation and some high-profile criticism, Oracle has changed the licensing model for its databases and middleware on multicore servers, bringing it a step closer in line with competitors.

The price change only effects the "multi core" processors, and the article discusses the formulas used:
Multicore processors pack more than one processing unit, or core, on a piece of silicon. The technique boosts performance of a machine, while keeping the heat generation down, although two cores do not double the performance.

We also see that this July 15, 2005 article shows examples of the computations required to determine license fees:

"For example, a 4-way, dual core processor server which previously had a list license fee of $320,000 (4*2 [cores] *$40,000) would now have a list license fee of $240,000 (0.75 * 8 [cores] *$40,000)."

And it gets even more complicated! A sharp Register reader forwards this advisory from Oracle's finer print:

"A multicore chip with 11 cores would require a 9 processor license (11 multiplied by a factor of .75 equals 8.25 which is then rounded up to the next whole number which is 9)."

The price change are only for "dual core" processors and they do not yet address "hyperthreaded" CPU's (The Intel Itanium2 and AMD 64-bit processors).

Oracle Store also shows details on counting multi-core processors

For the purpose of counting the number of processors which require licensing, a multicore chip with "n" cores shall be determined by multiplying "n" cores by a factor of .75. All fractions of a number are to be rounded up to the next whole number.

For example, a multicore chip with 11 cores would require a 9 processor license (11 multiplied by a factor of .75 equals 8.25 which is then rounded up to the next whole number which is 9).

The Oracle Audit

As noted, your Oracle licensing agreement allows Oracle to inspect your shop for license compliance:

Upon 45 days written notice, Oracle may audit your use of the programs. You agree to cooperate with Oracle's audit and provide reasonable assistance and access to information.

 

You agree to pay within 30 days of written notification any fees applicable to your use of the programs in excess of your license rights. If you do not pay, Oracle can end your technical support, licenses and/or this agreement. You agree that Oracle shall not be responsible for any of your costs incurred in cooperating with the audit.

 

Oracle guru Tony Jambu has these interesting observations about Oracle pricing in 2007:

As an example, let’s take a 2 Node RAC cluster consisting of 4 CPUs (ignoring multi cores) per node plus the following options:

·       Real Application Clusters($20,000 per processor)

·       Active Data Guard($5,000 per Processor)

·       Partitioning($10,000 per Processor)

·       Real Application Testing($10,000 per Processor)

·       Advanced Compression($10,000 per Processor)

·       Total Recall($5,000 per Processor)

·       Advanced Security ($10,000 per Processor)

Taking the options into account, the software cost per CPU would be US $110,000.For the2 Node RAC, that would come to be(2 nodes) x (4 CPU) x US$110,000=US$880,000.

The secondary site where your Active Data Guard is being replicated is missing. That would be double your cost to US$1,760,000(list).

Likewise, adding support of 22 percent brings the figure to US$2,147,200(list).

You would not pay this price, as discounting has not been applied. Using figures form Oracle’s Store, we get a discounted figure of US$1,610,400.
 

Oracle Pricing-good News

Some good news…Oracle has revised the condition for which Oracle Database Standard Edition (SE) and Standard Edition One (SE1) may be licensed.

In the past, Oracle SE could only be licensed on servers with

·       a maximum capacity of 4 single core processors or

·       Sum of Cores*Core Processor Factor <= 4 and Sum Cores < = 8

For a cluster environment,

·       The sum of single core processors < = 4 or

·       Sum of clustered Cores* Core Processor Factor < = 4 and Sum of clustered Cores < = 8