Oracle Licensing for Third-Party Clouds

Oracle Licensing for Third-Party Clouds

• Bring Your Own License (BYOL): Use existing AWS, Azure, or Google Cloud licenses.
• Pay-Per-Use Option: Oracle Database as a service on third-party clouds.
• License Calculation: 2 vCPUs = 1 processor (multithreading off).
• Cloud Flexibility: Leverage OCI services through cloud partnerships.

Oracle Licensing for Third-Party Clouds

The rise of public cloud platforms such as AWS, Azure, and Google Cloud has transformed how businesses manage and deploy their IT infrastructure. Organizations increasingly choose these third-party cloud providers to reduce hardware costs, scale efficiently, and gain operational flexibility.

However, moving traditional software like Oracle Database and middleware to the public cloud introduces licensing complexities.

Understanding Oracle licensing in public cloud environments is crucial for cost management and compliance.

This article provides an in-depth look into Oracle licensing in third-party public clouds—AWS, Azure, and Google Cloud—exploring key licensing policies, the different options available, and how to calculate the licensing requirements for Oracle products in a public cloud..

1. Oracle Licensing in Public Clouds

Oracle’s licensing policy for public cloud environments defines the rules for running Oracle technology products, such as databases and middleware, in third-party clouds like AWS, Azure, and Google Cloud.

The policy document, “Licensing Oracle Software in the Cloud Computing Environment,“ establishes how customers can bring their licenses to these platforms or, alternatively, leverage Oracle’s pay-per-use models available through partnerships with cloud vendors.

The two main options for running Oracle products in a public cloud are:

Oracle Database Cloud Service on AWS, Azure, or Google Cloud: Using Oracle services hosted by Oracle’s partnerships on third-party clouds without a license.

Bring Your Own License (BYOL): Purchasing a license from Oracle and bringing it to the public cloud environment.

Let’s explore each option in detail.

Option 1: Bring Your Own License (BYOL)

The Bring Your Own License (BYOL) model allows organizations to use their existing Oracle licenses in third-party cloud environments. BYOL’s key advantage is that it helps customers leverage their on-premises investment in Oracle technology while enjoying the flexibility and scalability of public cloud infrastructure.

How to Calculate Licensing Requirements

In a public cloud environment, Oracle’s licensing requirements depend on the number of vCPUs (virtual CPUs) being used. The calculation differs based on whether multithreading is enabled.

• If Multithreading is Disabled:
  • 2 vCPUs = 1 Oracle Processor License
  • This rule applies to Oracle Enterprise products, including Oracle Database and middleware, across AWS, Azure, and Google Cloud.
• If Multithreading is Enabled:
  • 1 vCPU = 1 Oracle Processor License
  • In environments where multithreading is turned on, each vCPU counts as a processor license.

These licensing requirements apply to Oracle Enterprise Edition products, including databases, middleware, and other Oracle technology products that demand a full processor license.

Examples of License Calculation

Example 1: Oracle Enterprise Database on AWS Without Multithreading

• Suppose you want to run an Oracle Enterprise Database on an AWS instance with 8 vCPUs, and multithreading is disabled.
• In this case, each two vCPUs require 1 processor license:
  • 8 vCPUs / 2 = 4 Oracle Processor Licenses.

Example 2: Oracle Middleware on Azure With Multithreading

• Suppose you are deploying Oracle middleware on Azure with 6 vCPUs and multithreading is enabled.
• Since each vCPU equals one processor license when multithreading is enabled:
  • 6 vCPUs = 6 Oracle Processor Licenses.

Example 3: Google Cloud Deployment

• If you want to deploy an Oracle Database instance on Google Cloud with 16 vCPUs, multithreading is disabled.
• Applying the calculation for a multithreading-disabled environment:
  • 16 vCPUs / 2 = 8 Oracle Processor Licenses.

The cost of these licenses depends on whether your current license includes Oracle’s Software Update License & Support (typically 22% annually of the perpetual list price), which is an important component for continued access to patches and support services.

Read about Oracle TERM Licensing.

BYOL Considerations

BYOL Considerations

License Management: Tracking the number of vCPUs across cloud instances and ensuring compliance with Oracle’s licensing policy can be challenging. Businesses often need cloud management and monitoring tools to maintain visibility over cloud deployments.

Eligible Licenses: Only specific Oracle licenses are eligible for BYOL, so it’s crucial to verify whether your existing licenses meet Oracle’s eligibility criteria for public cloud use.

Cost Implications: BYOL can be cost-effective if you already have perpetual licenses with active support contracts. However, understanding and properly calculating the number of processor licenses is critical to avoiding compliance issues.

2. Option 2: Oracle Database Cloud Service on AWS, Azure, or Google Cloud

The second option for using Oracle products in a third-party public cloud is through Oracle Cloud Services hosted in partnership with AWS, Azure, or Google Cloud. This offering is called Oracle Database on @AWS, Oracle Database on @Azure, or Oracle Database on Google Cloud. This model allows customers to use Oracle technology pay-per-use, like running Oracle workloads directly on Oracle Cloud Infrastructure (OCI).

Key Features of Oracle Database on Third-Party Public Clouds

• No Need to Purchase Licenses: Unlike the BYOL model, this service does not require customers to buy Oracle licenses upfront. Instead, users are billed based on usage, similar to a typical cloud subscription.
• Scalable Pricing: Since the pricing is based on actual usage, organizations can scale their cloud environments up or down according to their needs, which makes it easier to manage costs for fluctuating workloads.
• Unified Experience: With Oracle Database on AWS, Azure, or Google Cloud, customers benefit from Oracle’s full-stack database capabilities without worrying about managing the licenses. This ensures that the services are integrated seamlessly with each cloud provider’s tools and resources.

Example Usage Scenario: Oracle Database on Azure

• Suppose a company wants to run a high-availability Oracle Database on Azure for a limited-time project.
• Instead of buying licenses and calculating vCPUs, they opt for Oracle Database on @Azure.
• The company pays monthly or per hour based on database usage, eliminating the need for long-term licensing commitments or complex calculations.

Benefits of Using Oracle Cloud Services on Third-Party Clouds

Reduced Administrative Overhead: Since Oracle manages the licensing, customers can focus on deployment, scaling, and optimizing their database workloads rather than worrying about compliance audits or license procurement. This requires careful planning to ensure you meet all of Oracle’s licensing rules.

Cost Flexibility: Paying for actual usage can be much more economical, particularly for companies with variable workloads or short-term projects. You pay only for the compute and storage resources you consume.

Less Complexity: Customers do not need to navigate complex Oracle licensing rules or calculate vCPUs—Oracle handles all licensing and compliance aspects as part of the cloud service.

3. Comparison Between BYOL and Oracle Cloud Services on Public Clouds

Key Considerations for Choosing Between BYOL and Pay-Per-Use

• Existing Licenses: If your organization already owns Oracle licenses and has active support, the BYOL model may be more cost-effective, especially for long-term workloads.
• Short-Term Projects: If you need Oracle Database for a short-term project or proof of concept, the pay-per-use option available through partnerships with AWS, Azure, or Google Cloud might be more suitable.
• Scalability Needs: For workloads with fluctuating demand, using Oracle Cloud Services on third-party platforms allows you to scale seamlessly without calculating and managing processor licenses.
• Compliance: With BYOL, managing compliance is more complex, requiring businesses to accurately track the number of vCPUs and licenses. Using Oracle’s native services in third-party clouds reduces the compliance burden, as Oracle handles this directly.

Oracle Licensing for Third-Party Clouds FAQ

What is Oracle BYOL for public clouds? Oracle BYOL (Bring Your Own License) allows customers to bring their existing Oracle software licenses to public clouds like AWS, Azure, and Google Cloud. This helps utilize on-premises investments in the cloud.

How do I calculate Oracle licenses for vCPUs? Oracle licensing in public clouds depends on vCPU counts. For environments where multithreading is disabled, every 2 vCPUs count as 1 Oracle Processor License. If multithreading is enabled, each vCPU counts as one processor license.

What is Oracle Database on AWS, Azure, or Google Cloud? This is a pay-per-use model where customers use Oracle databases hosted on third-party clouds like AWS, Azure, or Google Cloud. You pay for usage, and there’s no need to own a license.

Is there a renewal option for Oracle BYOL in the cloud? BYOL licenses are perpetual licenses, and their support is renewed annually. The licenses can be continuously used in the public cloud as long as support is maintained.

How is licensing different with multithreading enabled? When multithreading is enabled, each vCPU is considered equivalent to one Oracle Processor License. This means that licensing requirements double compared to environments with multithreading disabled.

What are the benefits of Oracle pay-per-use on public clouds? Pay-per-use provides flexibility. You pay for the resources and time that the Oracle software is in use, making it ideal for short-term projects or fluctuating workloads without needing to purchase licenses.

Can I use Oracle Cloud services on third-party platforms? Yes, Oracle has partnerships with public cloud providers like AWS, Azure, and Google Cloud, allowing customers to use Oracle Database as a cloud service, billed directly through the cloud provider.

How does Oracle licensing differ between AWS, Azure, and Google Cloud? The licensing rules are similar across AWS, Azure, and Google Cloud, with vCPU-based calculations and the ability to use BYOL. However, specific agreements and pricing structures might vary by cloud provider.

Is BYOL suitable for long-term workloads in the cloud? Yes, BYOL suits long-term, stable workloads, particularly if you already own Oracle licenses. It allows you to leverage your existing investments while benefiting from cloud infrastructure.

What challenges come with Oracle BYOL in public clouds? The main challenges are maintaining compliance with Oracle’s licensing rules, accurately calculating vCPU requirements, and tracking cloud instances to ensure proper license usage.

Do I need to manage compliance for Oracle pay-per-use services? With pay-per-use Oracle services on third-party clouds, Oracle manages compliance directly. This reduces customers’ need to worry about licensing audits or calculating vCPU equivalents.

How do I determine which Oracle licensing option to use? If you have existing Oracle licenses and expect a steady workload, BYOL might be more cost-effective. The pay-per-use model may provide greater flexibility and ease for short-term or variable workloads.

What happens if my workload scales up quickly? In a BYOL model, scaling quickly requires ensuring you have enough licenses for the additional vCPUs. For the pay-per-use model, scaling is automatic, and you are billed based on increased resource usage.

Can Oracle licenses be transferred from on-premises to cloud? Yes, with BYOL, existing on-premises licenses can be transferred to public clouds as long as they meet Oracle’s eligibility criteria. This allows companies to move workloads without purchasing new cloud-specific licenses.

Why would someone choose pay-per-use instead of BYOL? Companies choose pay-per-use for short-term projects or unpredictable workloads because it requires no upfront licensing costs and scales based on use, providing flexibility without long-term commitments.