Licensing and Auditing in Oracle

March 26, 2008

Frustration. Anger. Despair. Depression. A sense of futility. Words and feelings to describe what it’s like to unravel performance tuning and the conflicting information among MetaLink, documentation, and renowned experts? Well, yes, they can be, but in this case, these words and feelings are what you can expect when dealing with Oracle licensing. A recent article on another Web site discussed what happens, along the lines of attitude and gamesmanship, at the table during negotiations. This article, as a counterpart, discusses what can take place during the licensing or renewal process.

Licensing

Let’s start with the present and work backwards. By present, I mean you already have CSIs for products and its time for the annual renewal. We’ll take an Enterprise Edition of the RDBMS along with the partitioning option. The server is a four CPU whatever box. The invoice for support is based on one of two models: the processor model or the named user model. What should you be looking for?

When this was first licensed, whomever (the people before you) had a choice to make. The licensing could be based on named users (i.e., “seats” as in the Microsoft model) or on the number of processors. In this example, at the time of purchase, the Enterprise Edition pricing had a minimum of 25 named users per processor, so overall, you’re looking at 100 seats. We all know (okay, maybe not) that partitioning is an extra cost. If your environment only has, say, 30 real users, it doesn’t matter. You’re paying for the 100 (25 per X each CPU) just to use the database server AND you will need to buy the same number of partitioning seats (so also 100).

For a smaller number of users, this may seem entirely unfair, but on the other side (and it’s not like those on the other side are going to compensate you), if you have a thousand users, it will be cheaper by far to have paid for the processor model. The break-even or crossover point depends on many factors: the product, the version, and how much you’re buying today from Oracle, to name a few.

Now let’s suppose you have a version of Application Server that you really don’t need. For example, you have the full blown Enterprise Edition with Business Intelligence version just to run a handful of Oracle Reports. You know that today the Forms and Reports Services standalone version is entirely adequate for your needs. You ask the sales rep if you can downgrade because, quite naturally, you want to save some money. Because there were fewer users, the Application Server licensing was based on named user plus perpetual.

What does perpetual mean? Not in the Merriam-Webster sense, but in the Oracle Corporation sense? What perpetual means is that you can keep using the product in perpetuity as long as you continue to pay the annual support fee. It does not mean you can downgrade to a cheaper version. In Oracle-speak, that is called cancel and replace, and being a publicly traded company, Oracle cannot do this. To downgrade, it means you stop paying for support for three years and then buy a new license. Of course, during that time, you are unsupported.

Unsupported in an outdated version of Application Server? No problem, you think. We’ll just continue to pay for RDBMS support and forego the Application Server support. Can you do this? Yes, you can, but what does it mean in terms of overall support? It means you are now operating in what Oracle calls a split environment, and that invalidates all of your support. In other words, it is all or nothing for support.

People howl about the service contracts with cellular phone companies, but at least with them, you can change your calling plan as long as you agree to extend your contract. With Oracle, when you buy a product with “perpetual” attached to it, be prepared to pay for the long haul. The only effective “out” is to just stop using the product.

What interaction do you have with sales people? One scenario is this: you don’t just meet with a sales rep, but also with a (for lack of better words) sales support engineer. You schedule a phone conference and logon to a meeting at http://meet.oracle.com.

After you get over the “So THAT’s what Collorabation Suite is used for” feeling, you’ll eventually drill down to a whiteboard session on your PC. The sales engineer will draw and annotate your environment and translate words like “server” into “computer” for the sales rep’s benefit. And just as you may be new to the licensing process, so may be the sales rep people. In fact, you can spend almost two hours in a conference talking and diagramming all the nifty ways you can save money by consolidating servers and applications, only to find out that neither the sales rep or engineer had a clue about the cancel and replace policy.

Looking backwards now, what product(s) and which version(s) should you license? The fact of the matter is that most companies will make decisions based on the here and now, with maybe a hint of the future in mind. If you expect significant growth but are not entirely sure that will happen, it will be hard to stomach an invoice costing hundreds of thousands of dollars. Well, it may be hard even at one hundred thousand. My personal prediction is that the cost of licensing will contribute even more to the growth of remote services.

The best thing you can do at initial purchase time is to choose wisely. Your company will live with this decision for a long time.

The Audit

Another factor to consider is undergoing an audit from a licensing compliance team. If you get audited, you get audited. The hidden meaning there in the repetition is this: it’s not like you can clean up your environment and hide anything. You will be directed to run “usage detection” scripts which query super secret (essentially) what may as well be Z$ views. Okay, not that secret. Where and how does DBA_FEATURE_USAGE_STATISTICS get populated? The results of using it can be seen in Database Control (and also visible to auditors).

How many times can you use AWR before it becomes a problem with respect to not being in compliance? If you are sampling its use, that is, demonstrating to management why paying for this feature is a good thing, that would be reasonable. If it is obvious you have been using this way beyond something reasonable, this gets licensed at about the same level in terms of processors or named users. In other words, it can be quite expensive.

There is no defense against an audit. If it’s your turn, there is no real way to defer it from taking place. There is, however, a defense against penalties, and that is to keep your usage within the scope and limit of what you are authorized to use.

In Closing

It’s old news that the sales aspect of Oracle is not very positive. What makes the situation worse is that a lack of knowledge exists within Oracle Corporation’s ranks (they have turnover and training of new people too, just like your organization). Feel free to ask for a second opinion or have a manager review the invoicing. You can certainly appreciate the frustration involved when trying to save money and cut back on expenses only to find out that you are essentially locked into paying for things you don’t need and never did need to begin with.

Oracle has a Software Investment Guide, which has Software Investment Guide as its main title. Then, there is another guide, which oddly enough, also has Software Investment Guide on the cover page, but is not the actual guide. This one is the price list. Have both on hand and read from end to end before starting the licensing process. Understanding what all of the terms mean is essential.

» See All Articles by Columnist Steve Callan








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