[Webinar Replay] The Oracle Licensing Pitfalls of Server Architectures

[Webinar Replay] The Oracle Licensing Pitfalls of Server Architectures

In this short 14 min webinar our expert Keith Dobbs discusses the many pitfalls of licensing various server architecture from standard servers, hosted servers, Virtualised and Cloud.

Welcome to this short webinar from Madora Consulting. Your Oracle licensing specialists. Today, I'm going to talk about Oracle server architectures, and the areas to watch out for in licensing your oracle technology software, server architectures, and the areas to watch out for in licensing your oracle technology software, watch out for in licensing your oracle technology software, Architectures and their licensing pitfalls. The architectural options for Oracle range from bare metal servers  through to virtualization and hosting, all the way to cloud computing. The root between these extremes passes through some patches of let's say, rough sea, where you can run a ground as far as licensing is concerned. Falling fowl of what we refer to as crossover architecture.

This webinar will help clarify the licensing of these generally hosted crossover architectures, covering the area between your local data center service and true cloud computing. An area which can be a licensing minefield.

The family of possible architectures for running Oracle software, be it technology or middle ware or applications, covers a gambit from traditional bear metal service, all the way through to software as a service, often called SASS cloud applications.

Let's start with the non cloud architectures listed here. I'm going to use a standard diagram to illustrate each architecture. First on the list is the Bare Metal server. This is the traditional server that we all know and love, in its This is the traditional server that we all know and love, in its non virtualized form. It's idea for heavy data crunching applications and even today, is the preferred base for production data basis. It's still the best architecture for handling high volumes of transactions processing.

Here standard Oracle licensing applies in it's basic form, where physical CPU cause, or sockets in the case of standard edition two. A licensed alibi processor or by named user plus metrics. On the left hand side of the diagram, you can see the architecture layers from application through to server. On the right hand side you see boxes showing who is responsible for managing that layer. In this case it's the client company. It's yourself.processor or by named user plus metrics. On the left hand side of the diagram, you can see the architecture layers from application through to server. On the right hand side you see boxes showing who is responsible for managing that layer. In this case it's the client company. It's yourself.

In the middle it shows the standard license terms apply, just what we would expect. Here it's a virtualized server. This data center with production data bases, consolidated development to test the environment where many instances exist and require separation between users, virtualized middle ware, where many connections are being made and dropped and where scaling is required, based on rapid and short term demands.development to test the environment where many instances exist and require separation between users, virtualized middle ware, where many connections are being made and dropped and where scaling is required, based on rapid and short term demands.

This is an ideal scenario. However our license requirement will scale based on the virtualization methods such as VMware, Hyper V, Oracle VM et cetera. That's a subject for webinar in itself. Safe to say non Oracle virtualization methods can yield surprisingly large license requirements. Here there's no change the responsibility for management or the license.

The other major architecture factor to consider is hosting. This effectively clarifies what can and can't be seen as Oracle Cloud. That grey area where a third party is running service for a client and this comes down to Oracle's hosting rights. Oracle has changed its license rules on hosting rights over time. They used to be generic, customer specific and propriety application hosting. Now there's just propriety application hosting, which is intended for independent software vendors, or RSVs to license their software as a service offering.



The upshot now is that you can't host an Oracle database, unless you're adding value through your application. This gives Oracle a clear run at being the only platform as a service Oracle Cloud provider. You also can't use propriety application hosting for just one client. It has to be a one to many situation. There are however two notable exceptions to this in the cloud and that is, the Amazon AWS service and Microsoft Azure.

There are three key hosted scenarios to consider. Outsourcing, third party application and Oracle on demand. Outsourcing, you may use a third party to help monitor your data center, or the third party may be managing your business systems on their servers on your behalf. Many businesses have outsourced parts of the variety and have a major SI running their data centers for them. In this case, the third party should be running the client's software under the client's own license and only for the client's own business purposes. Any use beyond this will fall outside the licensing agreement.parts of the variety and have a major SI running their data centers for them. In this case, the third party should be running the client's software under the client's own license and only for the client's own business purposes. Any use beyond this will fall outside the licensing agreement.

This is shown in the diagram, where the client is responsible for the Oracle licensing, but the server is run and managed by a third part. If this is offsite, then the client can lose touch with the server architecture, as may have happened in the next scenario.

Here the third party has a virtualized environment. Remember you're always responsible for your own licensing, even if you have outsourced your system management. You need to know your outsources' architecture. It could be virtualized and you could be exposed to massive under licensing. Out of sight mustn't be out of mind.

Third party applications. You may be running a third party business application on the software supply's hosting center. Third party business applications are where a third party company publishes a software application, which is hosted on their own servers and is available for public purchase by more than one end user. In this care, the third party will have licensed the Oracle of technology using propriety application hosting rights.

A similar situation is where the third party software supplier has an embedded license. You will be paying, say a subscription to the third party software supplier for the right to use their software. You will not have sight of the underlying Oracle software. Third party companies are no longer permitted to just host Oracle technology products. The former generic hosting right has been removed.right to use their software. You will not have sight of the underlying Oracle software. Third party companies are no longer permitted to just host Oracle technology products. The former generic hosting right has been removed.

Likewise a third party business application cannot be hosted for one specific client. The client specific hosting right has also been removed and this change prevents third parties from competing with Oracle in the Platform as a service (PaaS) space.Business application cannot be hosted for one specific client. 

Here is probably the most dangerous trap, where you bring your own license to a third party application. In this case licensing would be by application specific full use, or you decide to bring your own fully licenses, because I've already bought the licenses. I may as well use them and you negotiated a special deal with the third party. In this  case, you are responsible for the license, but no view or control over deployment and that's unacceptable. It's a false economy. Beware creative licensing with third parties.

This is also the case in a way with Oracle's on-demand products too, because Oracle on demand is a form of hosting. It predates the cloud as we know it and can be regarded as an early form of software as a service. However, from a licensing perspective, the servers running the on-demand service, a license understand the Oracle technology licensing rules. Don't assume Oracle license to run systems correctly. On demand and LMS are different entities and have different motivations.

Where does the cloud come in with all of this. The other examples have included some pseudo cloud hosted architectures, with areas for pitfalls. However, the big benefit of running your business applications using Oracle's cloud offering's is that you can move to subscription, non-metered and metered, both CPU licensing. The pain of standard technology licensing is removed.

Oracle's platform is a service, it's an alternative for database and middleware, where you're licensing by storage and process of power, or even hosted environment.

Let's look at cloud architecture in our standard schematic diagram. You may be using one of either infrastructure as a service, IaaS. Platform as a service, PaaS. Software as a service SaaS hosted offerings. Infrastructure as a service. This is where service and storage are made available by third party cloud host. Well known examples of these are Amazon AWS, Microsoft Azure and Oracles themselves.party cloud host. 

These three examples have well defined Oracle licensing rules, with Amazon and Microsoft having special terms based on the cloud CPU count, rather than the physical host, which underpins the cloud service.licensing rules, with Amazon and Microsoft having special terms based on the cloud CPU count, rather than the physical host, which underpins the cloud service.

Other third parties may offer infrastructure as a service, but they will not have the benefit of special terms from Oracle. This means that if you plan to run Oracle software on one of these cloud services, then you are responsible for the licensing and your standard Oracle licensing terms. This means that you need full details of the service and the technology that underpins the hosting service. Especially as many now will use virtualization.that you need full details of the service and the technology that underpins the hosting service. Especially as many now will use virtualization.

Platform as a service. This is where Oracle technology product such as database and middleware and provided in the cloud. The only permitted provider of this service is Oracle themselves, along with their two approved cloud vendors. Any other third party would fall foul  of the Oracle hosting rights.

The only exception to this could be, where a pre-existing generic hosting contract is still in place with the supplier. If this is stated, don't trust what you're told, always ask to see proof, or even ask Oracle.

Software as a service is where Oracles provides its application products on a subscription basis. These include the Oracle Fusion, CRM Cloud Service, Human Capital Management, Enterprise Resource Planning et cetera. Again, this can only be provided by Oracle, as a third party provider, would again fall foul of Oracle's hosting rules.

Third party publicly available business application are of course also available with the third party, because they're an independent software vendor, an ISV and has added value to the Oracle stack, such as with salesforce.com.

Let's summarize a few high risks in the scenarios we've covered above. You are always responsible for your own licensing, even if you have engaged a third party to manage your systems. A third party cannot take responsibility for your licensing. Oracle will come after you. Oracle does not allow third parties to offer generic hosting of Oracle. The only approved hosting for a software producer to host their own product to serve customers. It cannot be customer specific.

The only caveat is the approved cloud offerings of AWS and Azure. If you're running your business system as a third party and using your licenses to license it, do you know what technology it's being hosted on? You will still be liable for licensing, and we are aware of cases where the hosting system, part of a large V center environment and Oracle came after the end user.


If you are a software producer who hosts your product to several clients, are you sure you have the correct licensing? Even when you're running on Oracle on demand, if Oracle LMS carry out an audit and they do, they still expect you to know what Oracle on demand technology underpins your system. If this has been updated, you may be liable to additional Oracle technology licenses. If LMS carry out an audit, and they do, they still expect you to know what Oracle on demand technology underpins your system. If this has been updated, you may be liable to additional Oracle technology licenses.

It may sound unlikely, but we have seen this in operation. Oracle cloud can provide a safer licensing environment.

The bring your own hosting problem is compounded, when the underlying architecture is virtualized. We have seen a number of cases where people have fallen fowl of this.