oracle technology licensing

Oracle Database Licensing

Oracle database licensing is still difficult to fully solve after all of these years, which is strange because Oracle is by far the largest database vendor in the enterprise space. It has the strongest and widest database offering, but it is also one of the most expensive to license. Choosing the best possible Oracle database licensing model for you becomes important to keep costs down and avoid license compliance problems. It is also one of the most expensive enterprise software vendors.

Oracle Licensing for Beginners

Oracle Databases License Models

Oracle database software can be expensive and difficult to understand. Some database software is free, but Oracle may change the licensing terms and you could end up having to pay in the future. Here are some examples of Oracle database software:

Oracle Enterprise Edition is the most expensive version of Oracle database software, core based licensing with add-on that triggers additional licenses, called database options and management packs.

Oracle Database Standard Edition 2: The latest version of Oracle Standard Edition can only be licensed on servers with at least 2 CPUs or clusters with 2 CPU sockets.

Oracle Standard Edition can only be licensed on servers or clusters with a maximum of 4 processor sockets. Can no longer be purchased.

Oracle Standard Edition One is less expensive than Standard Version. Only available for servers with a maximum of 2 processor sockets. Can no longer be purchased.

Oracle enterprise manager. The Database Control and Grid Control features are free with this Oracle DB version. However, management packs must be purchased and licensed to allow for additional users and CPUs to be monitored.

What needs to be licensed?

You need to license every server where the processor is installed and or running. This means that you need to license production, test environments, development environments and most likely any disaster recovery environment. If you want to learn more about Oracle licensing disaster recovery.

Processor Licensing

oracle processor license

When users cannot be counted or verified, Processor licensing is used. Web-based applications can be used to benefit from Oracle’s Processor licensing. This is because it is difficult to count licenses in this environment. If you are using Personal Edition Oracle products, Oracle does not offer Processor licenses. You can calculate the number of licenses required by multiplying the number of cores by the core processor-licensing factors specified on the Oracle Processor Table. (Check your Oracle contract to see your terms).

The price you pay for the Oracle software is per processor. However, Oracle has its own definition of “processor”, which may not be identical to that of your hardware vendor. Standard Edition  and Standard Edition 2 are counted the same as sockets when Oracle software is licensed. However, multi-chip modules count each chip as one socket.

All processors must be licensed if Oracle Software is installed or running. If the machines are placed in a cluster, all cluster members must be licensed. This is the same for remote mirroring or standby machines.

Processor Calculation: A processor license is calculated when the total number cores of the processor are multiplied by the core processor licensing factor. This table can be accessed here. Each licensed program must have all cores on multi-core chips. All fractions of numbers are to be added up and multiplied by the appropriate core-licensing factor.

There are also nuances specific to each product. When licensing Oracle Database Standard Edition, a processor is considered equivalent to an occupied slot; however, multi-chip modules are counted as one socket in the case where each chip is an occupied slot.

Oracle differentiates between hard- and soft partitioning with Virtualization Software & Partitioning. Only partitions created with Oracle software are required to be licensed if partitioning methods, including virtualization, are part of hard partitioning. Soft partitioned servers must be fully licensed. Soft partitioning is any third-party software (VMWare included) that requires full licensing. Oracle VM is an open-source VM that can be used to create hard partitioning. This virtualization software can be set up as hard partitioning if it is done correctly.

Partitioning is based on how easy it is to manage the data processing resources (CPU) Hard partitioning refers to the physical division of a server into smaller units. Each system is a separate, physically independent server that acts as its own operating system, CPUs, boot area, memory and input/output subsystem. 

Product Minimums for Named User Plus Licenses, minimums per processor, are determined after the number and definition of the processors to which they are to be licensed has been calculated.

oracle licensing user minimums

Named User Plus Licensing

Named User Plus licensing allows the licensee to pay per user. However, a user can be defined as any end-node that creates or receives data from an Oracle database.

The license user minimums are determined by the Database edition:

Enterprise Edition licenses require a minimum of 25 named user plus per processor licenses, or the total number actually using the Oracle Database.

Standard Edition 2 allows for a minimum of 10 users per server.

Take into account:

oracle named user plus licensing
  • All devices that connect to the Oracle Database must be licensed if they are not operated by humans.
  • All humans who use human-operated devices, such as barcode scanners, need to be licensed if they connect to the Oracle Database.
  • Non-human-operated devices and human-operated device are connected to the Oracle Database.  all non-human devices as well as all humans operating devices must be licensed.

How to understand who you need to count for named user plus license.

  • Where are the requests coming from?
  • The source of the information.

NUP licensing scenarios

Any situation where you are working with a closed environment with few (countable) users. Test and development are often good choices for Oracle NUP licensing.


  • Cost effective license model.
  • Oracle licensing minimums can be negotiated.
  • Many different product version to choose from.
  • Easy to upgrade to Oracle processor licensing.


1. You need to keep track of your users.

2. Compliance problems: Multiplexing software like the application server is a common “unknown” gateway to uncountable licensing populations like the web

Oracle Processor licensing

The Oracle processor license is used in situations where you can’t, or it does not make sense to control who is accessing the database. A processor is not just a processor. Oracle has a unique way of calculating the number of processors depending on the database software and hardware used:

  • Oracle Database Enterprise Edition; # of processor cores x core factor from the Oracle core factor table = Oracle license need.
  • For all database editions with standard in the name, 1 socket is counted as one processor license.

Oracle Licensing scenarios – Processor

  • Where your user population is not countable or very large.
  • Oracle Databases for applications accessing the web.

What’s good

  • You don’t have to count or keep control of users.
  • Many different product versions to choose from.
  • Easy to upgrade.

What’s bad

  • You can’t downgrade to a lessor product version.
  • It is in many situations the most expensive licensing choice.

Licensing Fundamentals for Enterprise Edition 

  • Oracle Database Enterprise Edition Options requires you to match the same license and quantities.
  • All Oracle Enterprise Products are licensed by counting cores.
  • If licensing with Oracle NUP, you calculate licensing 25 user per Oracle processor as user minimum. It means even if you have 5 users, you still need to have 25 to cover the licensing minimums. Whatever is the highest number – actual users or calculated minimum users – is the number of licenses needed.

Oracle Database Enterprise Edition options

Oracle has 18 different Oracle enterprise edition options products. These are products that each contains multiple features and is available to license under Oracle database enterprise edition only. If you use or enable these options on standard edition databases, Oracle will require you to license that database with enterprise edition. 

In 2022 the following Oracle products exist on Oracle pricelist.

  • Multitenant
  • RAC
  • RAC One Node
  • Active Data Guard
  • Partitioning
  • Real Application Testing
  • Advanced Compression
  • Advanced Security
  • Label Security
  • Database Vault
  • OLAP
  • TimesTen Application
  • Database In-Memory
  • Diagnostic Pack
  • Tuning Pack
  • Database Lifecycle management Pack
  • Data Masking and Subsetting Pack
  • Cloud Management Pack for Oracle Database.

How to license Oracle Database Enterprise Edition options

1 – Count the number of physical cores in the server & cluster.

2 – Multiply physical processor cores with the Oracle license factor to obain the “Oracle processor” requirements.

3 – Same license metric and quantity metric for the option license must match the database. This means if you have 8 processors of Enterprise Edition and you are using partitioning in one of the databases running on that server, you need to license the full server with partitioning license. Vice versa if you have named user plus licensing.

oracle database option price

Oracle OEM/ISV licensing

Application Specific Full Use licenses (ASFU) are sold as part of a 3rd party application package. One common and very recognizable example of Oracle ASFU licensing is SAP, who still have many customers running Oracle databases under their applications. Sales and support of ASFU licenses is handled by the application vendor or partners, not directly by Oracle. Oracle ASFU licenses explained.

Oracle Enterprise License Agreements

Another very popular way to consume Oracle database technology is one where you get unlimited license grant for a specific set of products. The ULA is a term-based agreement, between 1 – 5 years. At the end of your term, you have the option to renew or certify the ULA. Certification is basically turning the unlimited license grant into standard perpetual licenses. Learn what is an Oracle ULA. The PULA is a perpetual version of the ULA, it never expires

Oracle license costs

Oracle Database Enterprise licensing is 47,500 $ per Oracle Processor license, you can find Oracle prices publicly available. Something to bear in mind, is that Oracle processor does not equal an Intel or AMD processor. An Oracle processor is calculated by licensing the number of physical cores that an processor has and multiplying this with the Oracle licensing core factor table.

oracle database license cost

How to calculate Oracle license costs –  (Enterprise Database Products)

For example, you have an Intel Xeon processor 9200 with 16 cores and 1 processor. Oracle has defined Intel with an Oracle licensing factor of 0,5. To calculate the licenses needed, you will need to multiply 16x 0,5 = 8 Processor licenses. You need to license that server with 8 processor licenses x 47 500 $ = 380 000 $

How to calculate Oracle License costs –  Database Standard Edition 2 

We use the same server, Intel Xeon CPU 9200 – 1 processor with 16 cores. However, Oracle SE2 is not licensed per core but per CPU socket occupied. In this case you would license the server with 1 processor license for 17,500 $ per processor.

Oracle Database Standard Edition 2 Licensing

  • Oracle Database Standard Edition is licensed per CPU socket occupied.
  • Oracle Database Standard Edition has licensing limits, on the size of server it can be deployed upon.
  • You may not use Enterprise Edition options such as diagnostic pack or tuning pack on a standard edition 2 database.
  • If licensing Oracle Database Standard Edition 2 NUP is calculated 10 NUP per server are the licensing minimums.

Oracle licensing is perpetual

When you purchase an Oracle license the license is usually perpetual – it never expires. Oracle is also selling 1-year license TERM licensing, which expires after 12 months. The economics usually favour perpetual license purchases. Along with the one-time license fee you also purchase 1 year of technical support, which is paid in advance. The technical support is then renewed annually for the perpetual license, but there are no additional licensing fees.

Oracle Term license change

License Term provides the timeline for customer’s usage

• As of September 1, 2020, Oracle has ended the availability of term licenses for all on-premise
software with the exception of specific Oracle Technology products for 1 year Term only available;
contact your Oracle sales representative for more information. Existing customers paying support on
their term licenses will remain supported through the end of their term.

• List price for a term license is based on a specific percentage of the perpetual license price with 1 year at
20% of list price: Exadata Storage Server Software, Oracle Active Data Guard, Oracle Advanced Compression, Oracle
Advanced Security, oracle Database Enterprise Edition, Oracle Database In-Memory, Oracle Database Standard Edition
2, Oracle Database Vault, Oracle Diagnostic Pack, Oracle Forms and Reports, Oracle GoldenGate, Oracle Internet
Application Server Enterprise Edition, Oracle Multitenant, Oracle OLAP, Oracle Partitioning, Oracle Real Application
Clusters, Oracle Real Application Clusters One Node, Oracle Real Application Testing, Oracle SOA Suite for Oracle
Middleware, Oracle Tuning Pack, Oracle Weblogic Server Enterprise edition, Oracle Weblogic Standard Edition, Oracle
Weblogic Suite.

• Note that, the list support price for term licenses is 22% of the list perpetual license fee

oracle bring your own license

Oracle software upgrades and licensing

If you maintain Oracle technical support, you almost always have the right to upgrade to later versions of the Oracle software you own a license for. In a few rare cases you may need to pay additional licensing fees to upgrade. You should talk to an Oracle license expert to validate your upgrading options.

Oracle Bring Your Own License – BYOL

If you already have invested in Oracle database technology, you have the option to bring that investment into Oracle cloud with the Bring Your Own License (BYOL) option. BYOL is one of Oracle’s ways to compete with other public cloud vendors like Microsoft Azure and AWS. Using Oracle’s BYOL option, you can consume Oracle cloud services at a discount, but benefits and potential savings depend on use cases.

Oracle Bring your own license for Azure and AWS is not very different from you licensing software on premise. The only difference is that Oracle has approved both Azure and AWS hypervisors and you can license per vCPU. Oracle Cloud has a unique value in if you have Oracle software licenses under support, you take use them to spin up Oracle environments in Oracle cloud. 

You can use several licenseable features for free in Oracle cloud, this includes diagnostic and tuning pack. You do need to pay attention to that if you are using Enterprise Edition products that if you start an EE high performance environment and are using database enterprise option that you do not have a license for, Oracle will not send you a warning. This is something you need to manage and control as the end user.

Oracle Authorized Cloud Computing Environments

• Customer can deploy their Oracle Technology programs licenses on two Authorized cloud providers:
• Amazon EC2 and RDS Microsoft Azure Platform

• For the purposes of licensing Oracle Technology programs in the Authorized Cloud, customer are
required to count the maximum available vCPUs of an instance type as follows:

• Count 2 virtual CPU (vCPU) to 1 Oracle Processor license if multi-threading of a processor
cores enabled, and 1 virtual CPU (vCPU) to 1 Oracle Processor license if multi-threading of
processor cores is not enabled

Learn more about Oracle cloud licensing.

Oracle Applications Licensing

This cover products such as Oracle EBS , Oracle Siebel and Peoplesoft.

• Licensing Models offer flexibility for purchasing programs in different pricing models such
as Component, Custom Application Bundle (CAS) or Enterprise

• Licensing Metrics allow customers to purchase based on user or usage based counts for
Component pricing, bundle users across select programs for CAS pricing or company wide
type of usage for Enterprise pricing

Oracle Applications Licensing Models are offered as follows:

• Component Model is an a la carte type of pricing for an individual product. Metrics available are:
• User-based metrics such as Application User, Employee, Subscriber, etc
• Usage-based metrics such as Electronic Order Lines, Expense Reports and $M Costs Of Goods
Sold, etc

• Custom Application Suite Model allows to create custom bundles across select product lines based on
needs for specific user populations
• Custom Suite User is the only metric available and refers to the individual authorized to use any
of the products included in the bundle and assembled across different application product lines

• Enterprise Model is ideal for large companies to license an individual product for their entire
organization without the need to keep track of specific users, servers or deployment locations

• Metrics refers to company wide values, e.g. Enterprise $M in Revenue

How to reduce Oracle license costs

Choose the right Oracle licensing model, processor or named user plus licensing. Licensing with named user plus is a 50% reduction on licensing assuming you have a low number of users.

Choose the right version/edition standard or enterprise. The licensing costs varies greatly as enterprise are licensed per core and standard edition are licensed per processor. 47,500 $ (per 2 cores) vs 17,500 $ (per processor) – it’s easy math.

Oracle BYOL is a cost-effective way of licensing only the CPU power that you need and in Oracle cloud you get free usage of diagnostics, tuning and Real application testing.

Oracle licensing – 5 reasons why companies are non-compliant

Oracle licensing in virtual environments

Oracle licensing policy document look at 2 types of virtualizations, hard partitioning and soft partitioning.

Hard partitioning gives you the choice to limit the processors that you license for example in a cluster or on a large server. This is also known as sub capacity licensing.

Soft partitioning is technologies where Oracle does not allow sub-capacity licensing and you need to license the whole cluster or the entire server.
VMware is counted as soft partitioning.

Reason for companies being out of compliant with Oracle can be:

  • IT is not aware of Oracle licensing rules for the specific virtualization technology.
  • Misunderstand or misinterpreting Oracle soft partitioning policy document.
  • They might be using hard partitioning such as IBM LPAR or Oracle OVM but haven’t configured the OS correctly and require licensing the whole server.
Oracle Licensing in Hyper V | Oracle licensing virtual servers

Oracle licensing – DR-environments not licensed

As a rule, if you have the Oracle binaries installed on a server, if that is turned on or off doesn’t matter when it comes to Oracle licensing. The only exception where you don’t need to license Oracle for DR is the 10-day rule or when testing your DR instances.

Watch our video – How to license Oracle in DR.

Not fulfilling Oracle licensing user minimums

Oracle database both enterprise edition and standard edition can be licensed with processor or named user plus licensing. Named User Plus licensing is often applied to test and dev or closed environments with few users. However, what many misunderstand is that even if you only have 7 users on a test env, you need to apply the licensing user minimums per processor to that server.

A few user minimums;

  • Oracle Database Enterprise Edition – 25 user minimums per Oracle processor license.
  • Oracle Database Standard Edition 2 – 10 user minimums per server.
  • Oracle WebLogic Enterprise Edition – 10 users per Oracle processor license.
  • WebLogic Suite – 10 users per Oracle processor license.

Oracle licensing Unlicensed usage of Oracle DB EE options

Oracle Database comes in different editions, Enterprise Edition, Standard Edition, Standard Edition One and Standard Edition two.

With the Oracle Database Enterprise Edition, there are 18 additional licensable options and management packs. That is features inside of the Oracle Database that if used would trigger additional licenses. The Oracle Database Enterprise Edition license is 47,500 $ per processor but Oracle database Multitenant option is licensed at 17,500 $ and if used would trigger additional licenses to match the number of Oracle Database EE licenses.

Oracle LMS scripts can detect both active and historical usage. In almost every Oracle license review we help clients with, we uncover past usage where a DBA or someone else have used licensable features without having a license. This is one of the main purposes why companies should review their Oracle licensing, as they want to uncover mistaken usage and remediate these issues before an Oracle license audit.

Usage of Oracle Database EE options on Standard Edition

Some of the Oracle Database Enterprise Options can technically be used on Standard Edition databases, but it is not allowed from a license compliance perspective. If Oracle discover this in an audit, you will need to upgrade to Enterprise Edition and apply the core factor licensing to purchase licenses for this usage.

Installing Oracle Database Standard Edition on a too large server

Oracle Database Standard Edition, all versions have different licensing limitations on the type of server are eligible to run Standard Edition upon.

  • Oracle Database Standard Edition can be installed a server or clusters of servers with maximum of 4 CPU sockets.
  • Oracle Database Standard Edition 2 can be installed a server or a cluster of servers with maximum of 2 CPU sockets

If you install any of those versions of a server with a capacity of more than what is eligible, you need to license that server with Enterprise Edition license.

Useful links to learn more about Oracle licensing.

Oracle Database Licensing

Oracle Partitioning (Virtualization)

Oracle Licensing Disaster Recovery

Oracle Application Licensing

Oracle Licensing in the Cloud

Oracle Database Licensing Information:

Oracle Middleware Licensing Information:

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Oracle licensing have many pitfalls even experienced Oracle licensing consultants need a team of experts to make sure they get the licensing correct. If you are looking at Oracle database licensing or Oracle middleware licensing we can support you to make sure you are correctly licensed. We can also help you lowering your Oracle database license cost or Oracle software costs. Contact us to discuss how Redress Compliance can be your Oracle license management partner.