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2014 CIO Summit - towards a 2020 vision
Mark Chillingworth
CIO expert guide to Oracle license management
CIOs tell us dealing with Oracle licensing is becoming a major challenge, here an expert
provides some useful insights and tips
Oracle licensing is complex, elaborate and has a lot of fine print to it. With Oracles never ending acquisition of technology
vendors, it is often challenging for an Oracle licensing analyst or CIO to keep up with the latest licensing policies and
procedures.
While many historical license metrics like Concurrent Devices and Universal Power Units (UPU) still exist in the CIOs license
inventory, many more new license metric definitions are continually being added through acquisitions.
Mostly, old licensing metrics can be translated to the latest metrics, old products can be migrated to the newer, and the
more-restrictive licenses can be upgraded to the less-restrictive licences. Oracle licensing policy states that any software
installed and/or used needs to be properly licensed.
Therefore there are a few questions that the CIO or IT Director must not avoid:
What Oracle licenses does your company currently own? 1.
Do you have adequate Oracle licenses for all your IT environments? 2.
Do you know if your Oracle licenses are being managed effectively? 3.
Do you understand the serious implications of a contractually abiding Oracle license audit? 4.
Does your team fully understand the Oracle licensing complexities, contractual rights and
restrictions?
5.
Are of aware of any exposure to financial and operational risks, by means of license
over-usage or under-usage?
6.
According to analyst house Gartner, Oracle is one of the top four software vendors conducting licence audits and at the highest
frequency. Gartner also states that, if an organisation has not been audited in the last three years, then there is a 65 per cent
chance that the organisation may be audited in the next 12 months.
The audit clause in the standard Oracle license agreement states that Oracle may audit the customer once-a-year upon a
45-day notice. The clause also explains that that the customer must agree to pay within 30 days of written notification any fees
applicable to the use of the programs in excess of the license rights.
It is imperative for an Oracle end-user to mitigate its financial, operational and legal risks by adhering to Oracle licensing best
practices. On one hand, the Oracle customer is exposed for continually paying annual technical support fees (at 22 per cent of
license cost) for procured but unused software licenses, while on the other hand, the customer may still be exposed for
downloading/installing excessive unpaid-for licenses and thereby causing software over usage.
As an example to prove this, let us take the example of Oracle Database Enterprise Edition (DBEE). The current license cost of
one processor of DBEE is $47,500. To receive technical support and software updates, the customer also has to pay an
additional 22 per cent price of the license cost, i.e. $10,450, year on year. If the customer does not use the product DBEE and
CIO expert guide to Oracle license management http://www.cio.co.uk/insight/data-management/cio-expert-guide-oracle...
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yet keeps paying the technical support fees, this means that they are exposed to financial risk by losing 22 per cent of the
license cost every year.
Some of the reasons why a customer becomes non-compliant on Oracle licensing are:
Changes to corporate structure, increased growth, mergers and acquisitions.
Lack of understanding of licensing policies.Hardware refresh.
Mixed or old metrics, as part of license inventory.
Installing more software than permitted by the license agreement.
It is the CIOs responsibility to oversee that his organisation does not stand the risk of revenue leakage due to the lack of Oracle
license management, during a contractually-abiding Oracle license audit. It needs to be understood that there is little or no
licensing implication, across Oracle product versions like 8i, 9i, 10g or 11g.
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CIO expert guide to Oracle license management http://www.cio.co.uk/insight/data-management/cio-expert-guide-oracle...
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