Licensing Oracle in a public cloud: the CPU calculation impact

First of all a disclaimer: I don’t work for Oracle nor do I speak for them. I believe this information to be correct, but for licensing questions, Oracle themselves have the final word.

With that out of the way, followers of this blog may have seen some of the results from my testing of actual CPU capacity with public clouds like Amazon Web Services, Microsoft Azure, and Google Compute Engine. In each of these cases, a CPU “core” was actually measured to be equivalent to an x86 HyperThread, or half a physical core. So when provisioning public cloud resources, it’s important to include twice as many CPU cores as the equivalent physical hardware. The low price and elasticity of public cloud infrastructure can however offset this differential, and still result in a cost savings over physical hardware.

One place this difference in CPU core calculation can have a significant impact, however, is software licensing. In this post I’ll look at Oracle database licensing in particular.

Oracle databases can be licensed using many metrics, including unlimited use agreements, embedded licenses, evaluation/developer licenses, partner licenses, and many more. But for those without a special agreement in place with Oracle, there are two ways to license products: Named User Plus (NUP) and processor licenses. NUP licenses are per-seat licenses which have a fixed cost per physical user or non-user device. The definition of a user is very broad, however. Quoting the Oracle Software Investment Guide:

Named User Plus includes both humans and non-human operated devices. All human users and non-human operated devices that are accessing the program must be licensed. A non-human operated device can be many things, such as a temperature-monitoring device. It is important to note that if the device is operated by a person, then this person must be licensed. As described in illustration #1, the 400 employees who are operating the 30 forklifts must be licensed because the forklift is not a “non-human operated device”.

So, if the application has any connection outside the organization (batch data feeds and public web users would be examples), it’s very difficult to fit the qualifications to count as NUP licenses.

Now, this leaves per-processor licenses, using processor cores that can potentially run the database software as licensing metric. When running in a public cloud, however, there is an immediate issue, which is your Oracle instance could presumably run on any of the thousands of servers owned by the cloud provider, so unique physical processors are virtually impossible to count. Fortunately, Oracle has provided a way to properly license Oracle software in public cloud environments: Licensing Oracle Software in the Cloud Computing Environment. It sets out a few requirements, including:

  • Amazon EC2, Amazon S3, and Microsoft Azure are covered under the policy.
  • There are limits to the counting of sockets and the number of cores per instance for Standard Edition and Standard Edition One.

But most importantly is the phrase customers are required to count each virtual core as equivalent to a physical core. Knowing that each “virtual core” is actually half a physical core, it can shift the economics of public cloud usage for Oracle database significantly.

Here’s an example of a general-purpose AWS configuration and a close equivalent on physical hardware. I’m excluding costs of external storage and datacenter costs (power, bandwidth, etc) from the comparison.

  • m3.2xlarge
  • 8 virtual / 4 physical CPU cores (from an E5-2670 processor at 2.6GHz)
  • 30GB RAM
  • 2x80GB local SSD storage
  • 3-year term

Total: $2989 upfront

A physical-hardware equivalent:

  • A single quad-core E5-2623 v3 processor at 3GHz
  • 32GB RAM
  • Oracle standard edition one
  • 2x120GB local SSD
  • 3-year 24×7 4hr on-site service

I priced this out at dell.com and came out with a total of $3761.

Now let’s add in an Oracle license. From the Oracle Price List, a socket of Standard Edition One costs $5800, with an additional $1276/year for support. Due to the counting of CPU cores, our AWS hardware requires two sockets of licensing. So instead of saving $772, we end up paying $9628 more.

Cost comparison: Standard Edition One

If we were to use Oracle Enterprise edition (excluding any options or discounts), that becomes an extra $157,700. Not small change anymore.

Cost Comparison: Enterprise Edition

So before you make the jump to put your Oracle databases on a public cloud, check your CPU core counts to avoid unexpected licensing surprises.