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4 Common Oracle Licensing Errors to Avoid – and How to Fix Them

Enterprise Software | Posted on November 27, 2012 by Doug Sekus

Softchoice has expertise in managing licensing for many organizations across North America, covering many different licensing solutions and programs. One trend that we’ve noticed is that Software license audits are on the rise.

The problem is many organizations I encounter are not prepared for an audit from a software manufacturer. Many find software licensing to be complex, and have not implemented the correct deployment and auditing tools. They also see very little benefit to their daily operations.

I find that many organizations struggle with software licensing in four primary areas. Fortunately, there are things you can do to prepare your organization. To illustrate these activities, we’re going to use Oracle as a reference example.1. Misunderstanding how server licenses are managed in a virtualized environment

I will use the Oracle Enterprise Database (EE) license as an example.The primary cause of licensing gaps that I see is server virtualization. Many organizations do not understand the licensing implications of virtualizing Oracle DB EE. From a licensing perspective, not all virtualization software is created equal. The licensing rules for server virtualization and server partitioning solutions like VMware, Oracle’s VM, HP Itanium, SPARC & Solaris, and IBM PowerVM are very different. Far too many organizations I encounter make costly mistakes because of this lack of understanding. The biggest mistake I see is running DB EE in VMware. Many organizations do not understanding that DB EE must be licensed for the total processor cores in the entire VMware farm, no matter how the virtual machines running Oracle are implemented.

2. Misinterpreting licensing terminology and/or not staying on top of licensing changes

A second area of confusion is licensing terminology, and licensing changes. I often encounter confusion with the terminology of processor and cores. They are not the same as I highlight in an example below. Many organizations own many different license types (Per Core CPU, Universal Power Units, Concurrent Device, Named User, Named User Single-Server, Named User Multi-Server), many of which can no longer be purchased. I constantly encounter organizations that treat all their licenses the same. Organizations are also struggling with the complexity of migrating their older licenses to more expensive new licenses.

To illustrate the confusion I find with license terminology, I will share a recent experience with an organization that updated their Oracle DB EE server infrastructure from three older 1 core servers to three single processor 8 core servers. They were correctly licensed for their 3 Oracle DB EE licenses. They assumed they owned processor licenses and did not need to concern themselves with processor cores. At $47,500 list price for a processor, they made a costly $997,500 mistake (3 servers with 8 cores = 24 cores. Minus their 3 licenses leaves a gap of 21 cores).

3. Misunderstanding license agreements

A third area that causes problems is with Oracle’s license agreements. These agreements can, and often are customized for an individual customer. This makes it very easy to violate custom licensing terms because organizations frequently do not consult their license agreements before deploying their software, or when server infrastructure changes are made. I also frequently encounter organizations that feel they have no flexibility in negotiating with Oracle to change their license agreements. It is possible to advantageously change licensing agreements. It’s not easy, but it can be done. To succeed, you need to get help from Oracle licensing contract experts.

4. Not staying on top of license management

The last area I will cover is license management. Organizations are not deploying appropriate software auditing & deployment tools. Nor have they implemented appropriate policies and procedures for managing software licenses from initial deployment to de-installation. Small mistakes can cause large financial penalties. I frequently encounter organizations that feel they have control and insight into their Oracle licensing only to discover that they do not, and that they have made costly mistakes. The last two organizations Softchoice helped had a $5 million and a $6 million dollar problem.

Creative Solutions to Solving Licensing Issues

In my experience, organizations need help with understanding their Oracle licensing. The first step is to understand how they are licensed and how their licenses are deployed. Discovering license gaps before an Oracle audit will save significant money. Organizations need help in understanding their licensing agreements, and what negotiation tactics are available to them to change those agreements.

But more than anything, organizations can benefit from solution providers that take a board and creative approach to solving potential licensing problems. At Softchoice, we do that. Our Oracle TechCheck quickly helps our customers understand how they are licensed and how their licenses are deployed. We help customers find Oracle licensing gaps quickly and accurately. But we don’t stop just by providing our customers with the licenses they need. We engage highly skilled Softchoice data center infrastructure, virtualization, licensing and contract specialists to creatively solve licensing gap problem in other ways.

For example, we have leveraged server infrastructure changes to significantly reduce licensing requirements. We have had particular success in helping customers who have deployed Oracle DB EE on Sun and HP UNIX server platforms, migrate their licenses to IBM Power server technology and significantly reduce their licensing gaps by doing so. IBM’s Power server performance combined with their PowerVM virtualization technology has in many cases enabled our customers to cut processor core requirements in half, and significantly close their Oracle licensing gaps. It is not uncommon for our customers to leverage Oracle license cost savings to cost effectively upgrade their entire aging HP or Sun UNIX server infrastructure to IBM’s Power server technology. IBM Power’s pure performance, low overhead impact of their virtualization software, and the ability to partition Power servers for sub-capacity Oracle licensing, make IBM’s Power server technology particularly well suited to running Oracle Enterprise Databases.

In other cases, we have leveraged our highly experienced Oracle contracts specialist (15+ years executive experience at Oracle in Contracts, Business Practices, Migrations, and License Management Services) to negotiate licensing and contract changes that save our customer significant costs. Our contract expertise has especially benefited our customers that have migrated their existing licenses to alternate server platforms like IBM Power.

Softchoice’s broad approach to helping our customers understand their Oracle software deployments, and solve potential licensing gap problems is an approach that is not offered by many solution providers. I hear all too often about companies that paid Oracle significant money because they did not understand their options. Softchoice’s assessment, data center infrastructure, virtualization, licensing, and contract expertise provide an unmatched value to our customers. Engaging Softchoice in an Oracle licensing assessment brings all the above expertise to help our customers with their Oracle licensing. Softchoice’s focus is on our customers. We are advocates of our customer, and not necessarily our manufactures. We keep all information gathered from our customers confidential.

Get an Oracle TechCheck Assessment started today to receive a $500 Visa gift card. Contact your Softchoice Account Representative for details, or leave a comment below.

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