Every Oracle® customer shares a common challenge: how to avoid over- or under-licensing. In a recent survey, 53 percent of enterprises indicated that a portion of software license spend is associated with applications that are overused and therefore out of compliance.1 At the same time, a large percentage of organizations also overspend – owning Oracle licenses that are not used or not deployed for maximum benefit.
For example, an international energy company conducted an internal assessment of Oracle license usage and identified 25 percent more database CPU’s than they thought had been deployed – which was a costly liability. In another case, a large global consumer packaged goods manufacturer saved over $30 million USD in licensing costs, including $7 million on Oracle software, by analyzing the actual installation and usage of databases and database options.
These companies reduced audit liability and achieved cost savings by proactively managing their Oracle licensing processes. They integrated asset management practices and deployed tracking software to deliver value throughout the software lifecycle management process – from negotiating favorable pricing to optimizing usage, saving on unnecessary expenditures and avoiding unforeseen costs from Oracle audits.
With Oracle audits on the rise, organizations that can best align license agreements with actual database and option usage can reduce their financial risk and maximize the value of their Oracle investments. The goal is to “right-size” Oracle across the enterprise and gain control over the entire license management process – from accurate needs projections and licensing negotiations, to deployments and audit preparation.
Oracle Licensing and Compliance Rules Create License Management Complexity
Any Oracle licensing strategy is a complex calculation based on current and projected usage. It’s not enough to count database server CPUs, the number of users, or even installations. While these metrics are important, especially for processor-core based agreements, Oracle requires detailed accounts of what is being used – which includes editions, versions, and any options and management packs. The burden is on the organization to keep licenses aligned with actual usage.
Actual usage can often vary dramatically from the projections used when entering into an Oracle contract – particularly for growing companies. Oracle provides assistance in making usage calculations, including scripts for tracking software usage. However, the onus is on the company to maintain license compliance, and many organizations simply do not have the processes or infrastructure in place to meet the reporting requirements of Oracle contracts – so they are at high-risk of expensive over-utilization adjustments in the event of an Oracle license assessment or audit.
While usage tracking is central to managing audit risk, tracking can also address under-utilization – finding Oracle licenses that could be redeployed for maximum usage. This frequently happens when organizations buy and install large quantities of Oracle database Options, but never actually deploy these Options. The process to determine Option utilization is much more complex than simply confirming installations. The process requires detailed analysis of each individual database Option through SQL queries and applying the appropriate business rules.
Five Reasons Your Oracle Licensing Requirements May Evolve
Even in well-managed and predictable environments, Oracle software licensing can quickly become out of balance. Something as simple as changing the server configuration can increase license costs because Oracle licenses are, in many cases, based on the number of processor cores in the physical servers.
During the term of an Oracle licensing agreement, many factors can lead to over- or under-licensing:
- Emerging Technologies. The complex task of usage tracking has become increasingly complicated with virtualization, multiplexing, and cloud computing, which can expand access for a larger number of users – internal and external – and drive up installations and use of Oracle databases and options. Changes in the hardware environment can also throw organizations into non-compliance, such as adding additional servers and/or processors. For example, if a license has a minimum requirement of users per CPU (processor-core), and a hardware refresh adds to the number of CPUs, then minimum requirements may no longer be met.
- Business Requirements. Many business improvement processes impact usage of Oracle databases. For example, the expanded use of a front-end application that requires an Oracle database under the hood may increase license requirements. Also, where decisionmaking is being empowered at lower levels within an organization, the need to expand or build reporting capability can mean more processing power, and more processor-cores, driving up Oracle licensing requirements.
- Vendor Consolidation. Architectural simplification or consolidation of vendors, including relational database vendors, can change licensing requirements. Oracle may even offer “replacement” incentives to move Sybase, Informix, or SQL Server customers to their platform. These incentives can save money, both operationally and with Oracle, but they also change the license need.
- Technical Needs. As companies become more proactive in managing their Oracle estate, they may expand their use of Management Packs. For example, they may implement Tuning and Diagnostics Packs to pinpoint technical problems or improve efficiencies. These Packs are additions to the Oracle infrastructure, and the licensing requirement is not only for the machines where these Options are installed, but also on any database they are used to manage remotely – something a simple inventory scan cannot detect.
- Organizational Changes. Software and licensing needs can evolve in response to acquisitions, mergers and divestitures, reorganizations, and changing chargeback issues. Whether these organizational changes require system integration, consolidation, or expansion, they often lead to changes in the Oracle infrastructure.