Oracle Licensing in Public Cloud Environments
- Oracle licensing in AWS, Azure, and Google Cloud follows BYOL (Bring Your Own License) rules.
- Licensing depends on core factors, not vCPUs.
- Oracle’s policy allows running on authorized cloud platforms with specific rules.
- Standard Edition requires a per-socket license; Enterprise Edition uses core-based licensing.
- License portability differs from on-premises contracts.
- Ensure compliance to avoid unexpected costs.
Oracle Licensing in Public Cloud Environments
1. Overview of Oracle’s Public Cloud Authorized Environments Policy
Oracle’s Stance on Cloud Licensing
Oracle officially allows customers to run Oracle software on certain public cloud providers under a published policy framework. This policy is outlined in Oracle’s document “Licensing Oracle Software in the Cloud Computing Environment.” It defines:
- Authorized Public Cloud Environments
- How licenses are counted in these environments
Oracle’s stance:
✅ You must license Oracle programs in the cloud according to this policy to remain compliant.
✅ The policy serves as Oracle’s guideline for cloud licensing.
Authorized Public Cloud Environments
Oracle designates the following as “Authorized Cloud Environments” for deploying Oracle software:
- Amazon Web Services (AWS)
- Microsoft Azure
- Google Cloud Platform (GCP)
Oracle’s cloud licensing policy explicitly covers these three major public cloud platforms.
What This Means:
- Oracle’s policy lists approved vendors and their specific services:
- ✅ AWS: Elastic Compute Cloud (EC2) and Relational Database Service (RDS)
- ✅ Microsoft Azure: Full cloud platform support
- ✅ Google Cloud: Compute Engine and Bare Metal Solution
- Oracle Cloud Infrastructure (OCI) is inherently supported but is not included in this “Authorized” list (since it is a first-party provider).
- Running Oracle on any cloud outside this list may require negotiation with Oracle or traditional licensing.
Policy Purpose
This Authorized Environments Policy was created to address:
✅ Virtualized, multi-tenant cloud infrastructure licensing challenges
✅ Traditional Oracle licensing based on physical cores/sockets (not directly countable in the cloud)
✅ vCPUs as an alternative licensing metric
Key Considerations:
- This policy is non-contractual and can be updated by Oracle at any time.
- It has become the de-facto standard that Oracle expects customers to follow for cloud deployments.
- Oracle recognizes AWS, Azure, and GCP as valid platforms for Oracle workloads and provides specific licensing formulas for compliance.
2. Licensing Rules for Public Cloud Providers
Oracle licensing in public clouds follows specific rules for counting vCPUs and CPUs.
Key Licensing Rules for Public Cloud Providers
1️⃣ vCPU vs. Physical CPU
- A vCPU (virtual CPU) in cloud instances usually corresponds to a hardware thread of a CPU core.
- Most cloud providers (AWS, Azure, GCP) use hyper-threading, where:
- 1 physical core = 2 vCPUs
- Oracle requires customers to license based on vCPUs, not physical cores.
2️⃣ Core Counting Methodology
Oracle applies the following licensing rules for public clouds:
✅ In AWS, Azure, and GCP:
- 2 vCPUs = 1 Oracle Processor license (if hyper-threading is enabled).
- 1 vCPU = 1 Oracle Processor license (if hyper-threading is disabled).
✅ In OCI (Oracle Cloud Infrastructure):
- 1 Oracle Processor license = 2 OCPUs (since 1 OCPU = 1 physical core = 2 vCPUs).
- This means OCI provides double the compute per license compared to AWS/Azure/GCP.
3️⃣ No Core Factor in Cloud
- Oracle’s on-premises Core Factor Table does not apply to cloud licensing.
- This means each virtual core must be fully licensed without any fractional multipliers.
4️⃣ Provider-Specific Considerations
🟢 AWS (Amazon Web Services):
- Supports BYOL (Bring Your License) for Oracle Database.
- License Included model only for Oracle SE2 on AWS RDS.
- AWS provides license tracking tools, but compliance remains the customer’s responsibility.
🔵 Microsoft Azure:
- BYOL only (No Oracle license-included options).
- Microsoft and Oracle have an interconnect partnership that allows for the integration of Azure and OCI.
🟠 Google Cloud (GCP):
- BYOL is only for Oracle workloads.
- Bare Metal Solution allows Oracle to run on dedicated servers inside GCP.
🔴 Oracle OCI:
- Best licensing efficiency: 1 Oracle Processor license covers twice the vCPUs compared to AWS/Azure.
- Supports both BYOL and License Included models.
- Support Rewards Program reduces costs for Oracle customers using OCI.
3. Comparison: Oracle OCI vs. Other Cloud Providers
🔍 Key Comparisons
| Feature | Oracle OCI | AWS | Azure | GCP |
|---|---|---|---|---|
| License Efficiency | 1 license covers 2 OCPUs (4 vCPUs) | 1 license covers 2 vCPUs | 1 license covers 2 vCPUs | 1 license covers 2 vCPUs |
| BYOL Support | ✅ Yes | ✅ Yes | ✅ Yes | ✅ Yes |
| License-Included | ✅ Yes | 🚫 No (except SE2 on RDS) | 🚫 No | 🚫 No |
| Oracle Optimized Hardware | ✅ Yes (Exadata, RAC support) | 🚫 No | 🚫 No | 🚫 No |
| Support Cost Reduction | ✅ Yes (Support Rewards) | 🚫 No | 🚫 No | 🚫 No |
Key Takeaways:
✅ OCI provides the most license-efficient model, requiring fewer Oracle licenses than AWS, Azure, and GCP.
✅ AWS, Azure, and GCP only offer BYOL for Oracle Enterprise Edition (no License-Included option).
✅ OCI offers performance benefits such as Exadata and Oracle RAC support, which are unavailable on other clouds.
✅ Oracle’s Support Rewards Program (up to 33% cost reduction) applies only to OCI customers.
4. Oracle BYOL vs. License Included (Universal Cloud Credits)
Oracle Licensing Models
1️⃣ BYOL (Bring Your Own License)
- Applies existing Oracle licenses to cloud deployments.
- Customers only pay for cloud infrastructure costs.
- Available on OCI, AWS, Azure, and GCP.
2️⃣ License Included (Universal Cloud Credits)
- Oracle license is bundled into cloud service costs.
- No need for existing licenses – a simple pay-as-you-go model.
- Available only on OCI and AWS RDS for SE2.
BYOL vs. License-Included Cost Comparison
| Scenario | OCI (BYOL) | AWS (BYOL) | OCI (License Included) | AWS RDS (License Included) |
|---|---|---|---|---|
| 8 vCPU Oracle DB | 2 Oracle licenses required | 4 Oracle licenses required | Pay-as-you-go | SE2 only |
| Annual Cost Estimate | ~$36K | ~$73K | ~$31K | Varies |
Key Insights:
✅ OCI BYOL requires half the licenses compared to AWS/Azure/GCP, reducing costs.
✅ License Included is ideal for organizations without existing Oracle licenses but can be more expensive over time.
✅ Oracle Universal Cloud Credits allow flexible spending across Oracle Cloud services.
5. Cost Comparison and Licensing Scenarios
Example: Running an 8-vCPU Oracle Database
| Cloud Provider | License Model | Number of Licenses Required | Estimated Annual Cost |
|---|---|---|---|
| OCI | BYOL | 2 | $36K |
| AWS | BYOL | 4 | $73K |
| OCI | License Included | 0 (Pay-as-you-go) | $31K |
| AWS RDS (SE2 Only) | License Included | N/A | Varies |
✅ OCI offers the lowest cost for Oracle workloads when using BYOL.
✅ License Included provides a flexible, subscription-based model.
FAQ: Oracle Licensing in Public Cloud Environments
How does Oracle licensing work in public clouds?
Oracle follows BYOL (Bring Your Own License) policies for public clouds like AWS, Azure, and Google Cloud. Licensing is based on vCPU-to-core conversion rules.
Can I use my Oracle licenses on AWS and Azure?
Yes, but you must comply with Oracle’s core factor table, which differs from on-premises licensing models.
Do Oracle licensing policies differ between AWS and Azure?
Slightly. Both require core-based licensing, but some instances may have specific restrictions.
Is Oracle Standard Edition licensed differently in the cloud?
Yes, it is licensed per socket, whereas Enterprise Edition is core-based.
Are Oracle’s cloud policies legally binding?
No, Oracle’s cloud policies are not contractual but can still impact compliance risks.
What happens if I don’t comply with Oracle’s cloud licensing?
Non-compliance can lead to significant audit penalties and licensing adjustments.
Can I switch my Oracle licenses between cloud providers?
Yes, but each cloud has different licensing rules and core multipliers.
Does Oracle Cloud have different licensing benefits?
Oracle Cloud Infrastructure (OCI) offers more flexible licensing options, including Universal Credits.
How does Oracle license virtual machines in public clouds?
Licensing is based on the number of vCPUs, with a conversion factor depending on the cloud provider.
Can I use the Oracle Database on Google Cloud under BYOL?
Yes, but Google Cloud is not explicitly covered under Oracle’s public cloud licensing policy.
What should I check before deploying Oracle software in the cloud?
Verify licensing terms, vCPU conversions, and whether your cloud environment meets Oracle’s requirements.
Does Oracle offer unlimited licensing for public cloud use?
Oracle Unlimited License Agreements (ULA) typically apply to on-premises deployments and require certification.
Are there any cost savings with Oracle licensing in public clouds?
It depends on your deployment size. Using Oracle Cloud may reduce costs due to special licensing terms.
How do I avoid Oracle licensing pitfalls in the cloud?
Carefully review your contract terms, use authorized cloud platforms, and monitor compliance.
Can Oracle audit my cloud-based deployments?
Yes, Oracle conducts audits for cloud environments, and non-compliance can result in penalties.
