Oracle Licensing User Minimums. How much is your organisation exposed? Part 1

Madora Oracle User Minimums

Oracle Licensing User Minimums. How much are you exposed?

This is probably the most misunderstood Oracle licence policy.  Anyone new to Oracle licensing whether in procurement or IT management can easily stumble over this.

If you do not have any Named User Plus (NUP) licences then no problem, you can probably skip this blog and learn about the 10 ten day rule for disaster recovery architectures.  (Or for some fun you can read The Oracle of Rougebois; The Miller’s Tale Acts 1-3)

It is than more likely that you do have some NUP  licences.  NUP licences are popular in the following scenarios, so have a think if any of these apply:
1.   Smaller mid-tier enterprises with small staff numbers;
2.  To licence non production, pre-production or staging environments for development teams in larger enterprises to save costs compared to using processor licences;
3.  To underpin third party business applications.  Many business applications do not use embedded Oracle licences or Application Specific use licences. You need to check your contracts.
4.  If your organisation has recently made an acquisition, particularly if it’s a small enterprise.

So why is the user minimums policy so misunderstood?  Well perhaps the name of the metric is misleading.  It is easy to assume that a ‘User’ metric should equate to the number of users of your system.  Well sorry to say that is not the case, a pretty normal assumption as it is typical with the rest of the software world. The licence metric is further complicated in that the definition also includes devices.  However, we are not discussing the licence definition today, we will leave that for another blog.

The key issue for this post is that 100 users accessing a system may or may not need 100 NUP  licenses. It all depends on the the user minimums. Allow me to explain.  The minimum number of NUP licences required to be licensed correctly is the larger of;

A) The number of people/devices accessing the application
B) The number of licensable processors x stated user minimums for that particular product.

So, for example let’s assume that Abc Ltd has 10 staff accessing a finance application running on the Oracle Enterprise Database.  Now we can’t assume that 10 NUP licences will be required.  We have to understand the server processor count and multiply this by the user minimums for the Oracle Enterprise Database.  So, firstly the stated user minimums of Oracle Enterprose Database is 25 named users per licensable processor.

So after some investigation, we discover that the application is running a small 2 processor server.  But we also need to know the core count to determine licensable processors.  In this case, let’s say it is a quad core chip.  So we have 2 x 4 cores, 8 cores in total. Now we need to know the chip type!  You still following?

Our IT manager tells us that they are Intel chips sets, so we can look up the core factor chip table from Oracle to determine the ratio we need to calculate the licensable.  ( Note;  if you download our Oracle Licensing Resource Guide we have all the links to the core factor tables and other vital links).  The Intel chip has a core factor of 0.5,  so to calculate the total licensable processors, we multiply the total cores of 8 by the core factor of 0.5 which equals 4.  So the server would need 4 processors of Oracle Enterprise Edition to be correctly licensed.  Or 4 processors multiplied by the user minimums of 25 which equals 100 NUP  licenses.  What! 100 NUP licences you say.  Indeed a ten fold increase in what you thought you needed to be compliant.  Now that was one relatively small server, how many of those do you have hidden under desks or hanging around data centres?  The potential exposure can really start to stack up, very quickly.  This is one of Oracle’s pet loves.  One of the first things a Sales Rep, COLS or LMS do is try to understand your non-production environment.  We all generally focus on the production environments but it is the non-production, test, dev and cloned staging areas that sometimes IT set up not realising the potential risk and exposure they are putting the enterprise in.

Financial Exposure

So what is the possible financial exposure?

Well let’s say we need to purchase 90 NUP licenses. Now the price of a NUP enterprise edition is currently £637 plus £140 support, so that is is £57,330 plus £12,600 at list price. Oracle will also suggest that back support fees are also due with a suitable inflation of course.  So the 90 user shortfall can be quite pricey.  Now Oracle will not discount a purchase of that size even if you have a price hold. But what if you had another ten servers?  Ten servers now it’s £573,300 WOW! Plus back support and you have three-quater of a million £UK shortfall. OMG!  Now try taking that one to your boss.

In Part 2 we will look at the user minimums for some of the other product families and editions and recap with some more examples.If you are worried or unsure on possible financial exposure why not call Madora Consulting.  For the cost of a few days consulting we may be able to identify any shortfall and then mitigate the non compliance risk.  Interested to learn how we could do that? Contact us today.


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