Oracle licensing

How to Build a Business Case for Oracle License Management

Introduction to Business Case for Oracle License Management

Effective license management is crucial for businesses to ensure compliance and optimize costs in today’s rapidly evolving technological landscape.

Oracle, as one of the leading providers of database solutions, has a comprehensive licensing structure that can be complex.

Understanding this structure and managing licenses effectively can lead to significant savings for organizations.

Let’s delve into the importance of Oracle license management and how it can impact your business’s bottom line.

1. Oracle License Compliance: Avoid Audit Penalties

Oracle conducts regular audits to ensure its customers comply with their licensing agreements. Non-compliance can result in hefty penalties, significantly impacting an organization’s finances.

Case Study: The Cost of Non-compliance

Consider a hypothetical company that has inadvertently under-licensed 20 Oracle Database Enterprise Edition processor licenses. Additionally, they have also under-licensed the Diagnostic Pack and the Tuning Pack. Based on the Oracle Technology Price List:

  • Oracle Database Enterprise Edition: $47,500 per processor license
  • Diagnostic Pack: $7,000 per processor license
  • Tuning Pack: $5,000 per processor license

The potential cost of an Oracle audit for this company would be:

20 x $47,500 (Database) + 20 x $7,000 (Diagnostic) + 20 x $5,000 (Tuning) = $1,190,000

This is a substantial amount that can be avoided with effective license management.

2. Oracle License Optimization: Realize Tangible Savings

Beyond compliance, there’s an opportunity for organizations to optimize their Oracle licenses. Companies can free up licenses and reduce their annual maintenance costs by understanding usage patterns and reallocating resources.

Case Study: The Benefits of Optimization

Imagine an organization with 200 processor licenses of Oracle Database Enterprise Edition. Through effective license management, they identify opportunities to optimize and free up 10% of their licenses, equating to 20 processor licenses.

The savings from optimizing these 20 licenses would be:

20 x $47,500 (Database) = $950,000

Furthermore, considering the annual maintenance costs associated with these licenses, which is typically 22% of the license cost, the annual savings would be:

$950,000 x 0.22 = $209,000

Conclusion

Building a business case for Oracle license management is about avoiding penalties and realizing tangible savings.

It is essential not to overlook your Oracle cloud license management practices as there are savings to be achieved there, too.

Also, do not underestimate the value of Oracle license management training to your organization.

Organizations can significantly reduce their Oracle licensing costs by ensuring compliance and optimizing license usage. It’s an investment in understanding and managing licenses that can lead to substantial financial benefits in the long run.

Author

  • Fredrik Filipsson

    Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, improving organizational efficiency.

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