The Oracle Licensing Conundrum: Constrained vCPU VMs in the Cloud

Max

Welcome, everyone, to today’s episode of our tech podcast! I’m your host, Max, and today we’re diving into one of the most perplexing and often frustrating topics in the tech world: Oracle licensing in the cloud, especially with constrained vCPU VMs. Joining me is Ada, our co-host, who’s always ready with insightful questions and tangents. Ada, take it away!

Ada

Thanks, Max! I’m super excited to be here. Oracle licensing is such a tricky topic, especially when it comes to the cloud. I remember the first time I had to deal with it, and my head was spinning. Let’s start with the basics. Max, can you explain what Oracle licensing is and why it’s so complex?

Max

Absolutely, Ada. Oracle licensing is essentially the system Oracle uses to charge for their software. They offer two main types of licenses: Processor licenses and Named User Plus (NUP) licenses. Processor licenses are based on the number of processors or cores in your server, while NUP licenses are based on the number of users. The complexity arises because Oracle has different rules for on-premises and cloud environments, and these rules can vary significantly between different cloud providers.

Ada

That makes sense. But why is traditional on-premises licensing so different from cloud licensing? Can you give us an example?

Max

Sure thing, Ada. In a traditional on-premises setup, if you’re using Processor licenses, you need to license each core or processor in your server. For example, if you have a server with 4 cores, you’d need 4 Processor licenses. However, in the cloud, Oracle introduced new rules. They focus on threads rather than vCPUs, and if hyperthreading is enabled, you need one Processor License for every two vCPUs. This can double your licensing costs compared to on-premises environments.

Ada

Wow, that’s a significant difference. So, what are the main challenges when it comes to licensing Oracle databases in the cloud?

Max

The main challenges are the lack of clear guidelines and the discrepancies between how different cloud providers handle licensing. For example, in AWS, Azure, and Google Cloud, you can deploy IaaS (virtual machines or bare metal instances) and use your own licenses (BYOL). However, Oracle doesn’t apply the core factor rules in non-OCI environments, which means you need one Processor license for every core, even if hyperthreading is disabled. This can lead to unexpected high licensing costs.

Ada

That sounds incredibly complex. I’ve heard about constrained vCPU VMs. Can you explain what they are and how they’re supposed to help with licensing?

Max

Certainly! Constrained vCPU VMs are a strategy used by cloud providers like Microsoft and AWS to reduce Oracle licensing costs. The idea is that you pay for more resources, but some of them are capped. For example, in an Azure Standard_E16-8s_v3 VM, you pay for a 16 vCPU VM, but only 8 vCPUs are usable. The theory is that you only need to license the functioning vCPUs, which can significantly lower your licensing costs.

Ada

That sounds like a smart approach. But what’s Oracle’s stance on this?

Max

Oracle doesn’t see it that way. They argue that the maximum available vCPUs, regardless of whether they’re actually utilized, must be licensed. So, in the case of the Azure Standard_E16-8s_v3 VM, Oracle would say you need to license all 16 vCPUs. This has led to a lot of confusion and debate in the tech community.

Ada

That’s a bit of a bummer. How do Microsoft and AWS justify their approach?

Max

They argue that the tools used to identify the cores used only show the lower number of vCPUs. For example, if you run a tool to check the number of vCPUs, it will show only 8 vCPUs. This makes it seem like you should only license 8 vCPUs. However, Oracle counters that the underlying hardware still has 16 vCPUs, and you need to license them all.

Ada

That’s a tough situation. Can you give us a real-world example of how this might play out for a company?

Max

Sure. Let’s say a company is migrating their Oracle database to AWS and decides to use a constrained vCPU VM. They think they’re only licensing 8 vCPUs, but during a license audit, Oracle discovers that the VM has 16 vCPUs. The company then faces unexpected licensing fees, which can be a significant financial burden. This is why many organizations are cautious and often consult with Oracle Licensing Management Services (LMS) for clarity.

Ada

That’s a real headache. So, what’s the solution? How can we push for more clarity in Oracle licensing?

Max

We need clear communication and guidelines from Oracle, AWS, and Microsoft. Licensing options that work on-premises don’t translate well into the cloud for IaaS setups. When these companies put their heads together and clarify their terms, it will make a world of difference. A public-facing FAQ or dedicated statement could demystify these complexities and help cloud adopters focus on building great applications rather than navigating licensing issues.

Ada

That makes a lot of sense. What’s your hope for the future of Oracle licensing in the cloud?

Max

I’m hopeful for better clarity in future licensing updates. Clear guidelines from Oracle, AWS, and Microsoft would enhance cloud adoption for applications relying on Oracle databases. Instead of navigating a murky system, we could focus on what truly matters: building great applications and providing value to our customers. Communication is key, and I believe we’ll see more transparency and clarity soon.

Ada

That’s a great note to end on. Thanks, Max, for breaking down this complex topic. And thank you, listeners, for joining us today. Don’t forget to subscribe and leave us a review. Until next time!

Max

Thanks, Ada. And thanks, everyone, for tuning in. See you next time!