Oracle licensing on AWS explained

Oracle Licensing on AWS

Deploying Oracle software on Amazon Web Services (AWS) provides organizations flexibility and scalability but can introduce complex licensing considerations. Oracle licensing policies for AWS environments differ from traditional on-premises deployments, and failing to comply can lead to expensive audit findings.

In this guide, we’ll outline the key factors you must understand about Oracle licensing on AWS, covering important concepts like authorized cloud environments, core-factor calculations, supported licensing models, and compliance risks.

Oracle Licensing Basics for AWS Environments

Before diving into details, here’s an overview of core concepts:

• Oracle licenses are typically processor-based or user-based:
  • Processor-based (most common): Licenses are calculated based on the number of CPU cores.
  • Named User Plus (less common): Licenses are based on individual users or devices.
• Oracle considers AWS an Authorized Cloud Environment. This means Oracle provides specific policies for licensing its software on AWS, which differ from traditional hardware-based licensing.

AWS as an Authorized Cloud Environment

Oracle classifies AWS (alongside Azure) as an Authorized Cloud Environment, as defined in Oracle’s Cloud Licensing Policy. This classification directly impacts licensing requirements and calculations:

• Oracle officially recognizes AWS EC2 and RDS services as approved environments.
• Other AWS services (like ECS, EKS, and Lambda) are generally not explicitly covered by Oracle’s cloud policy and might introduce additional compliance risks. It’s crucial to clarify these deployments directly with Oracle.

How Oracle Licensing Metrics Work on AWS

Oracle licensing calculations differ significantly between on-premises and AWS environments. Below are key differences to note:

Processor Licensing and Core Factors on AWS

• Oracle applies specific licensing rules for counting AWS virtual CPUs (vCPUs).
• Oracle defines 2 AWS vCPUs as equivalent to 1 Oracle Processor License.
• AWS’s vCPUs are virtualized threads; thus, you must correctly map vCPUs to Oracle processor licenses.

Example:

• If you deploy Oracle Database on an AWS instance type like m6i.xlarge (4 vCPUs):
  • Divide the four vCPUs by Oracle’s standard (2 vCPUs = 1 processor license).
  • This instance would require 2 Oracle Processor Licenses.

Named User Plus Licensing on AWS

• Due to Oracle’s licensing minimums, User Plus licensing is allowed but is less common in AWS.
• Oracle’s licensing minimums typically state that you must license at least 10 Named Users per Processor License. For example, if an AWS instance requires 2 Processor Licenses, the minimum Named Users licensed must be 20.
• Organizations typically find processor licensing more cost-effective and simpler to manage on AWS.

Oracle Licensing Models Supported on AWS

Oracle offers two main licensing models for use on AWS:

Bring Your Own License (BYOL)

• BYOL is the most common model for enterprises moving existing Oracle licenses to AWS.
• Allows customers to leverage existing licenses purchased directly from Oracle or an Oracle reseller.
• Licenses remain the customer’s responsibility to manage for compliance, even when hosted on AWS.

Key Considerations for BYOL:

• Ensure you have sufficient licenses for your AWS deployments, especially when scaling instances.
• Regular internal compliance checks are crucial because AWS auto-scaling can lead to unintended non-compliance.
• Document your AWS deployments thoroughly for audit readiness.

License Included Model (Amazon RDS for Oracle)

• AWS offers Oracle licenses as part of Amazon RDS for Oracle under the License Included Model.
• AWS manages licensing compliance under this model, simplifying administration significantly.
• Restrictions: Only supports specific Oracle database versions and editions (Standard Edition Two, typically).

Key Benefits:

• Simplify compliance and reduce audit risk.
• Best suited for smaller workloads or projects that prefer minimal administrative overhead.

Limitations:

• No Enterprise Edition option under License Included.
• Limited customization of Oracle Database deployments.

Oracle Licensing for Specific AWS Services

Understanding how specific AWS services affect Oracle licensing is crucial. Below are examples of common services and licensing implications:

Amazon EC2 Instances

• The most common deployment method for Oracle workloads on AWS.
• Processor Licensing: Calculate licenses based on the number of vCPUs as described above.
• Consider the instance type carefully, as CPU counts vary widely by instance type.

Amazon RDS for Oracle

• Simplified license management (if License Included).
• If you choose BYOL for RDS, the licensing calculation remains the same (2 vCPUs = 1 Processor License).

Amazon VMware Cloud (VMC) on AWS

• VMC on AWS is treated as a VMware virtualized environment, not an authorized cloud environment.
• Oracle requires licensing of all physical cores on ESXi hosts, which typically results in higher licensing costs.
• Use caution: Oracle’s traditional VMware licensing policies apply, potentially raising compliance risks.

Oracle License Mobility and AWS

Oracle licenses purchased under traditional agreements typically allow use in AWS environments, subject to the following conditions:

• Licenses purchased with Software Update License & Support (SULS) usually permit deployment in AWS.
• Licenses purchased with restrictions (such as hardware-specific licenses) typically cannot be transferred to AWS.

Example:

• Licenses initially procured under Oracle’s Exadata hardware-specific agreement generally cannot be moved to AWS without significant renegotiation or additional licensing fees.

Compliance Risks When Licensing Oracle on AWS

While AWS provides scalability, it also introduces specific compliance risks for Oracle licenses. Key risks include:

• Auto-scaling and Dynamic Environments:
  • Instances can dynamically scale up or down, unintentionally exceeding licensed vCPU counts.
  • Regular monitoring and control policies must be established to avoid accidental over-deployment.
• Misinterpretation of Licensing Metrics:
  • Incorrectly applying core-factor calculations can lead to significant under-licensing.
  • For example, misunderstanding AWS hyper-threading can double your perceived licensing needs.
• Virtualization and Licensing Scope:
  • Deployments in VMware Cloud on AWS often require licensing for all underlying physical cores, significantly increasing license costs and compliance complexity.
  • Oracle audits frequently target VMware environments for compliance scrutiny.

Oracle Audits and AWS Deployments

Oracle regularly audits customers’ workloads in AWS environments. Key audit triggers and practices include:

• Significant increase in AWS deployment (e.g., scaling out databases).
• Changes in your Oracle support agreements or license renewals.
• Oracle’s internal analysis identifying discrepancies between purchased licenses and public AWS deployment information.

During an audit, Oracle typically requests:

• AWS deployment architecture diagrams.
• Historical AWS billing reports to verify the instances’ types and number of cores/vCPUs used.
• Confirmation of software versions deployed (to confirm entitlement coverage).

Best Practices for Managing Oracle Licensing on AWS

To manage licensing effectively and avoid compliance pitfalls, follow these best practices:

• Regular Licensing Assessments:
  • Periodically audit your AWS environment for Oracle workloads.
  • Proactively verify that your actual usage aligns with your licensed entitlements.
• Monitor AWS Deployments Continuously:
  • Implement automated monitoring to track AWS instance scaling and core utilization.
  • Use AWS Cost Management tools to track deployments specifically tied to Oracle licensing.
• Establish Clear Internal Policies:
  • Develop internal guidelines for AWS teams regarding Oracle instance deployment, scaling policies, and approved instance types.
  • Ensure internal teams understand Oracle licensing basics relevant to AWS.
• Consult Oracle Licensing Experts:
  • Regularly engage Oracle license specialists to review your AWS deployment strategies.
  • Proactively seek clarification from Oracle or experienced consultants when uncertain about specific licensing scenarios.

Conclusion: Maintaining Compliance While Leveraging AWS

Licensing Oracle software on AWS provides significant benefits in flexibility and scalability but requires careful planning and management to ensure compliance. Oracle licensing policies specifically designed for AWS simplify some aspects (like core factor calculation) but introduce potential risks, particularly with dynamic cloud environments and virtualization.

Organizations that succeed with Oracle deployments on AWS take proactive steps by:

• Clearly understanding Oracle’s AWS licensing metrics.
• Actively monitoring deployments and scalability.
• Regularly auditing internal license usage.
• Consulting experts to validate strategies and stay informed about Oracle’s latest licensing policies.

Adopting these practices ensures your AWS-based Oracle deployments remain compliant, cost-effective, and audit-ready, allowing your organization to fully leverage AWS cloud benefits without licensing pitfalls.