Oracle changes the Licensing rules for cloud – again

Oracle changes the Licensing rules for cloud – again

Keep Calm and Cloud On

In September last year during Open World, Oracle Executive Chairman Larry Ellison as usual was bold in positioning Oracle Cloud as the leading cloud platform of choice.  We all know in terms of market share, Amazon is way ahead but Larry Ellison was quick to slate AWS as being slower and more resource hungry, less open and more expensive. Well the last point took an interesting turn when Oracle changed it’s Cloud Licensing policy document on the 23rd January 2017. Amazon, Azure and Oracle’s IAAS are all ‘bring your own licenses’ cloud platforms as they provide managed compute and storage only. So any changes in licensing calculations could impact current or future deployments.

So what actually changed in the policy?

On the 23rd January 2017,  For the authorised cloud environments’ which includes Amazon Web Services – Amazon Elastic Compute Cloud (EC2), Amazon Relational Database Service (RDS) and Microsoft Azure Platform,  Oracle changed the license calculations. Under the new rules, you must now count :

  • One Microsoft Azure Core as One Oracle Processor License.
  • For Amazon One vCPU as One Oracle Processor License (if hyper-threading is not enabled) or Two vCPU as One Oracle Processor License (if hyper-threading is enabled)

The document also mentions that the Oracle Core Factor Table no longer applies when calculating license consumption in authorised cloud environments and explicitly lists the products in question. The details above are for Enterprise edition Database. Standard Edition licensing remains the same.

This  may not be news for many of you as a number of  articles have been published over the last couple of weeks.  We did however want to highlight a few and add our views. As usual with Oracle things are never clear.

Oracle is pricing itself out of Amazon’s cloud

  takes a stance that Oracle is pricing itself out of Amazon Cloud. See extract and link to original article below.

I’m not sure why Oracle has doubled its AWS virtual CPU pricing, other than to steer customers to use its own IaaS platform rather than migrate to AWS. Although Oracle’s cloud is far behind AWS’s, doubling the price of using AWS may stall enterprises’ migration enough to give Oracle time to get its own cloud act together. 

source via Oracle is pricing itself out of Amazon’s cloud

I agree with David in most part. Yes Oracle is pricing itself out of the Amazon Cloud but it does have a comparable alternative, it’s own  IaaS. Let’s not kid ourself here. Oracle wants and needs to grow it’s Cloud business. It was late to the market and so it will do what it can to make it’s platform more competitive.  We have seen this already with Hardware. After the SUN acquisition Oracle’s kit is cheaper to license per core than most of the other vendors, through core throttling and core factors.  I don’t really see the change for Amazon and Azure as any different.  I do not really see masses of customers leaving Oracle because Amazon may (if hyper threading is not turned on) be more expensive. Standard Edition on Amazon is still the same price. Oracle would also argue that Oracle IaaS and AWS are not comparable in terms for performance.  So like most things, it really depends on your use case and the workload requirements.  If you are serious about running Oracle in the cloud, you can probably get better performance per dollar with Oracle.  When did you manage to negotiate serious discounts with Amazon?

Licenses acquired under unlimited license agreements (ULAs) may be used in Authorized Cloud Environments, but customers may not include those licenses in the certification at the end of the ULA term

Oracle Corp January 2017

Is this contract binding?

So it’s a policy document right? Yes.

So it’s not contractually binding right? Correct.

So I have nothing to worry about? Umm No, not necessarily.

Licensing Oracle on Amazon EC2, RDS and Microsoft Azure – Nothing changed!

Daniel Hesselink takes a keep calm and cloud stance and reminds us that the policy document is just that. The document even states in it’s footnote that it is not contractually binding. Of course Daniel is correct. Your Order documents and OMA count as your legal contracts. Will we see updates to the OMA in due course, we will see. I doubt it somehow.

“Your license agreement doesn’t mention anything about having to count Processors at Amazon, RDS or Microsoft Azure any different than how it’s already agreed in your license agreement. Clients can count and pay the licenses in exactly the same way they did when they purchased the license.” Read the full pulse article on Linkedin by Daniel Hesselink by clicking below.

“Licensing Oracle on Amazon EC2, RDS and Microsoft Azure – Nothing changed!” by @OracleLicensing

However!

Time and again Oracle Licence audits refer  to policy documentation  such as licensing Data recovery environments; Partitioning; Data transfer environments as reasons for being non compliant. Current contracts usually require processor license calculations that reference the core factor table. This has changed in the policy document. In reality Oracle LMS and sales reps will use these non-contractual documents as a basis for Oracle audits.  I also do not see many customers challenging Oracle in court over these. So be warned, it is not as simple or as straight forward as you may think.

What about Hyperthreading?

The policy discusses hyper-threading impacting the licence calaculation. Some Amazon instances do not have hyperthreading, so for those ones you are going to lose out. For the others you can enable or disable hyper-threading.  I found this article on Hyper-Threading On or Off for Oracle?by Steve Shaw which may shed some light on the topic.

 

No self-respecting post on How to Maximise CPU Performance for the Oracle Database on Linux would be complete without also mentioning Hyper-Threading(HT). This page describes HT perfectly as a feature that “uses processor resources more efficiently, enabling multiple threads to run on each core.” And is an implementation of a feature called Simultaneous Multithreading (SMT).  In more details the figure shows 2 threads being scheduled on a processor, firstly without HT and then with HT illustrating fewer processor execution units sitting idle when HT is enabled.

 

Oracle Public Cloud: 2 OCPU for 1 proc. license

In this article By  he demonstrates that Oracle IAAS runs faster than AWS and due to the recent changes is cheaper to run than on AWS.  

I’ve blogged recently about the Oracle Core Factor in the Clouds. And then, in order to optimize your Oracle licences, you need to choose the instance type that can run faster on less cores. In a previous blog post, I tried to show how this can be complex, comparing the same workload (cached SLOB) on different instances of same Cloud provider (Amazon). I did that on instances with 2 virtual cores, covered by 2 Oracle Database processor licences. Here I’m doing the same on the Oracle Public Cloud where, with the same number of licenses, you can run on 4 hyper-threaded cores. source via Oracle Public Cloud: 2 OCPU for 1 proc. license – Blog dbi services

Implications of Oracle On-Premise License Migrations to the Cloud

 wrote a nice summary of the impact on migration to SaaS or IaaS on support.

 A customer does not exchange a database license for infrastructure as a service (IaaS).  They must bring the database license with them and now instead of running the database on their own on-premise servers, the customer now runs it on Oracle’s IaaS, or Amazon’s IaaS, or Azure’s IaaS.  In other words, there is no cloud database license, IaaS only provides the infrastructure or hardware for running the database.  Therefore, when a customer migrates the running of their Oracle database license to Oracle’s or a third party’s IaaS, the customer must maintain the Oracle database license and continue paying support fees.  Additionally, if the customer’s database requirements grow or require updating depending on the hardware they are running their database on as part of IaaS, a customer must pay additional database license and support fees to account for this growth or change in requirements whether the database is running on-premise or under an IaaS agreement. These database licenses and support fees never go away and will continue to grow over time. source via Implications of Oracle On-Premise License Migrations to the Cloud

I personally think many articles are sensationalising the change in policy. For some Amazon customers (probably new customers, but we don’t know if this is retrospective), this could be more expensive. If your organisation is using Amazon as a policy and not mixing cloud platforms then this could have an impact. I’m not sure I am seeing many organisations doing this and I predict many firms just like today will have multiple cloud platforms depending on the use case and requirements. As always with Oracle, everything is negotiable. So if you have a case to use Oracle in the cloud then talk to an advisor to help you navigate and negotiate options for you. Performance and cost for Oracle IAAS may be more beneficial than other cloud platforms, especially now when early adopters will benefit from high discounts. I do think Oracle needs to move forward with a subscription licence to run on cloud rather than a bring your own. The two models contradict each other. Compute and storage are on demand  subscription based but  you need to buy or bring term or perpetual licences. I know we have Oracle DB Cloud Services as an alternative but this ‘comes’ with all the options and is a little expensive. With the next Open World I am sure we will have some more changes and maybe for the better.

As always, if in doubt, contact one of us for guidance.

Kay Williams

Marketing Manager, Madora Consulting