License terms explained - Oracle
Rick de Laat
Oracle is a software vendor that offers many different products, ranging from cloud solutions and systems for creating and managing databases to software and hardware. Oracle licenses can be complex because each product has its own licensing model.
Products
Oracle offers thousands of products and services, including hardware, software, and cloud solutions. The most commonly purchased products from Oracle’s portfolio are:
The licensing terms for each product may vary depending on the product category and its usage. As a result, the various licensing terms are often specific to certain products or product groups.
- Oracle Database: a relational database management system (RDBMS) used by organizations for enterprise grid computing and hybrid database workloads.
- Oracle MySQL: an open-source relational database management system used by organizations for web databases, e-commerce, data warehousing, and logging.
- Oracle Java: a programming language and development platform used to develop applications for various types of devices (such as computers and smartphones).
- Oracle Cloud Infrastructure: a cloud computing service providing on-demand computing resources for migrating, building, and running IT.
- Oracle Fusion Middleware: software for developing, running, and managing applications.
- Oracle Applications: business applications such as software for ERP, EPM, HCM, and SCM.
The licensing terms for each product may vary depending on the product category and its usage. As a result, the various licensing terms are often specific to certain products or product groups.
License Basics
Every server on which Oracle software is installed or that runs Oracle software must be licensed. This applies to all environments (production, test, development, and disaster recovery). Three important points for Oracle licenses:
- Functional dependencies: these are products used together but must be licensed separately. For example, if you use Oracle Middleware (such as WebLogic Server) to support an Oracle Database, you must license both the middleware and the database.
- Add-on products: for add-on products such as Enterprise Options and Management Packs, the number of licenses purchased must equal the number of licenses for the product with which the add-on is used.
- Actual vs. minimum usage: you pay based on the actual usage or the agreed-upon minimum usage, depending on which is higher. This ensures that organizations remain compliant even if their actual usage is lower than the agreed minimum.
License Metrics
Oracle has several license metrics. Which one applies depends on the type of product and the implementation environment. The most common license metrics are:
Named User Plus (NUP)
Organizations pay for the number of users that have access to the software. It does not matter whether these users actually (actively) use the software — you license based on access. This can include both users and “non-user devices” that connect to the Oracle Database. For some Oracle products, a minimum number of NUP licenses apply (for example, 10 NUP per server for Standard Edition 2 or 25 NUP per processor for Enterprise Edition).
To remain compliant, it is important to keep accurate records of the number of users. Therefore, this license metric is often used in environments where the number of users can easily be counted. NUP licenses are impractical when the number of users is large or frequently changes.
Processor Licenses
Organizations pay for the number of processor cores on servers where Oracle software is installed. The number of required licenses is calculated by multiplying the total number of processor cores by the core factor. The core factor varies depending on the type of processor and server and can be found in the core factor table.
Processor licenses are often used in environments with a large number of users, where the number of users frequently changes, or where the number of users is difficult to count — for example, in the case of web-based applications.
Named User Plus (NUP)
Organizations pay for the number of users that have access to the software. It does not matter whether these users actually (actively) use the software — you license based on access. This can include both users and “non-user devices” that connect to the Oracle Database. For some Oracle products, a minimum number of NUP licenses apply (for example, 10 NUP per server for Standard Edition 2 or 25 NUP per processor for Enterprise Edition).
To remain compliant, it is important to keep accurate records of the number of users. Therefore, this license metric is often used in environments where the number of users can easily be counted. NUP licenses are impractical when the number of users is large or frequently changes.
Processor Licenses
Organizations pay for the number of processor cores on servers where Oracle software is installed. The number of required licenses is calculated by multiplying the total number of processor cores by the core factor. The core factor varies depending on the type of processor and server and can be found in the core factor table.
Processor licenses are often used in environments with a large number of users, where the number of users frequently changes, or where the number of users is difficult to count — for example, in the case of web-based applications.
Example Calculation
An organization has 15 non-user devices with Oracle Database Enterprise Edition and 25 employees. Oracle Database Enterprise Edition runs on a server with 4 processors, 24 cores per processor, and a core factor of 0.5. The agreed minimum is 25 NUP per processor.
Processor Licenses
4 processors × 24 cores = 96 cores
96 cores × 0.5 core factor = 48 processor licenses
NUP
The highest of:
• Minimum: 4 processors × 25 = 100 NUP
• Actual: 15 devices + 25 users = 40 NUP
An organization has 15 non-user devices with Oracle Database Enterprise Edition and 25 employees. Oracle Database Enterprise Edition runs on a server with 4 processors, 24 cores per processor, and a core factor of 0.5. The agreed minimum is 25 NUP per processor.
Processor Licenses
4 processors × 24 cores = 96 cores
96 cores × 0.5 core factor = 48 processor licenses
NUP
The highest of:
• Minimum: 4 processors × 25 = 100 NUP
• Actual: 15 devices + 25 users = 40 NUP
License Types
Oracle has several types of licenses. The main ones are:
- Perpetual Licenses: a perpetual license is a one-time purchase that allows organizations to use the Oracle software indefinitely. The software may be used as long as the organization needs it, but there are annual costs associated with support and maintenance.
- Term Licenses: with a term license, organizations can use Oracle software for a specified period. Term licenses are rented for the duration of the agreement. At the end of the term, the organization must renew the license or stop using the software. Support and maintenance are generally included during this period.
- Cloud Licenses: a cloud license is for organizations that use Oracle software in Oracle’s cloud environments, such as Oracle Cloud Infrastructure. These licenses are often based on usage metrics such as consumption, capacity, or the number of users. This also provides scalability for organizations, as they pay for what they use.
- BYOL (Bring Your Own License): with BYOL, organizations can transfer their existing Oracle licenses to Oracle’s cloud environment. This is advantageous for organizations that already own Oracle software and want to use it in the cloud without repurchasing licenses. As with cloud licenses, support and maintenance are usually included.
- Subscription Licenses: with a subscription license, organizations can use Oracle software on a subscription basis, paying monthly or annually. This offers more flexibility, and support and maintenance are included in the subscription fees.
- Enterprise License Agreements (ELA): with an Enterprise License Agreement, organizations can license Oracle software for the entire organization in a simple and cost-effective way. ELAs typically cover multiple Oracle products and are customized for each organization. Support and maintenance are generally included in the ELA.
- Processor-Based Licenses: processor-based licensing licenses software based on the number of processors (cores or CPUs) used for Oracle products. This is often used by organizations with significant computing needs, allowing them to license software based on their hardware configurations. As with perpetual licenses, organizations pay annual support and maintenance fees.
Virtualization and Partitioning
Processor Licenses in Virtualized Environments
Processor licenses can simplify license management in virtualized environments. Instead of tracking which users have access to which virtual machines (VMs), organizations can allocate licenses based on the number of processors in the virtualized environment running Oracle Database.
Partitioning
Partitioning divides large databases and servers into smaller, separate sections (partitions). This makes it easier to manage large amounts of data. Oracle distinguishes between hard and soft partitioning:
Many organizations use non-Oracle virtualization (such as VMware) without realizing the challenges these technologies can bring:
Processor licenses can simplify license management in virtualized environments. Instead of tracking which users have access to which virtual machines (VMs), organizations can allocate licenses based on the number of processors in the virtualized environment running Oracle Database.
Partitioning
Partitioning divides large databases and servers into smaller, separate sections (partitions). This makes it easier to manage large amounts of data. Oracle distinguishes between hard and soft partitioning:
- Hard partitioning (physical separation): server resources are physically separated, for example, by using multiple servers. Only the actually assigned resources must be licensed.
- Soft partitioning (logical separation): server resources are not physically separated but are logically divided, for example, by using VMs within a single server. In this case, all processors in the server must be fully licensed, regardless of usage. Virtualized environments are considered soft partitioning.
Many organizations use non-Oracle virtualization (such as VMware) without realizing the challenges these technologies can bring:
- VMware clusters: Oracle considers all physical servers in a VMware cluster as potentially hosting Oracle software, even if Oracle is not installed. This means that all servers in the cluster must be licensed, which can lead to higher costs.
- Migration and compliance risks: VMware environments often allow VM migration. Unless this is properly managed, it can cause compliance issues because Oracle software might migrate to unlicensed servers.
- Restrict Oracle workloads to dedicated hosts within the cluster.
- Use hard partitioning to limit Oracle software to separate physical processors.
- Regularly document and validate Oracle implementations to ensure compliance.
Would you like to learn more about the licensing terms of other software vendors as well? Read more via the links below!