Oracle Licensing on Azure – The Most Comphrensive Guide 2023

Oracle Licensing on Azure: Avoid Costly Surprises During Audits

Don’t underestimate the potential cost implications of Oracle licensing on Azure. Organizations often face Oracle audits when they inform Oracle about their plans to deploy Oracle technology on Azure or AWS instead of Oracle Cloud Infrastructure (OCI).

Here’s what you need to know:

• Oracle’s Designation: Microsoft Azure is recognized by Oracle as a public cloud, enabling customers to license all software based on vCPU.
• Bring Your Own License: You can bring your own license to Microsoft Azure, providing flexibility and potential cost savings.
• Oracle-Microsoft Collaboration: Oracle and Microsoft have established collaborations that facilitate the integration and collaboration between Oracle Cloud and Azure.

Ensure you navigate Oracle licensing on Azure effectively to avoid unexpected financial burdens and maintain compliance with Oracle’s licensing policies.

A summary of this article:

• Oracle licensing on Azure – Oracle applies a unique licensing model for its software when used on Microsoft Azure, as it has designated Azure as an authorized public cloud platform in its policy document.
  
• To determine the licenses required for Oracle on Azure, you must calculate the number of vCPUs the software is deployed on. If multi-threading is enabled, two vCPUs equal one processor license.
  
• Example: Four processor licenses would be required if using Oracle Database Enterprise Edition on an eight vCPU instance.
  
• If Multithreading is not enabled, one vCPU = 1 Processor license.
  
• Benefits of licensing Oracle on Azure include only needing to license the capacity needed and not having to adhere to Oracle’s licensing policy on virtualization.
  
• Common issues with Oracle licensing on Azure include territory restrictions and limitations on Standard Edition 2.
  
• The concept of “constrained vCPU” can be used to reduce the number of vCPUs, and, thus, the number of Oracle Processor licenses needed, but some Oracle Account Teams may state that this cannot be done. This may be a point of disagreement between Oracle and you.
  
• It is important to review your licensing agreement for any other restrictions that may exist, preventing you from deploying in Microsoft Azure.
  
• Oracle ULA normally does not allow you to count the Microsoft Azure deployments to your exit numbers. Review your Oracle ULA certification clause for details.
  
  

Oracle Licensing on Azure

If you are using Oracle in your Azure environment, you must know how to bring your Oracle license.

The Oracle cloud licensing policy guides importing your Oracle license into the cloud.

But it does not mention whether or not Oracle approves other cloud vendors.

If you use non-approved cloud environments, you must follow your Oracle license terms to avoid possible problems.

Can I bring my Oracle License to Azure?

Yes, you can bring your Oracle license to Azure. However, you should review your licensing agreement if any restrictions prevent you from using the Oracle licensing on Azure.

Then you need to apply Oracle licensing rules and policies to ensure compliance.

Oracle Azure InterConnect

Oracle has announced a multi-cloud collaboration with Microsoft through Oracle Cloud Infrastructure.

Oracle and Microsoft have built a dedicated private network connecting Oracle Cloud Infrastructure and Azure data centers, enabling enterprise workload migration to the cloud.

The two companies also collaborate on unified identity management and single sign-on experience.

They will also offer Oracle Database and Autonomous Database capabilities on Azure and a collaborative support model.

Oracle Cloud and Azure Interconnect are compatible with Oracle Cloud infrastructure and applications and are available today.

How does Oracle Licensing Azure Work?

In their policy document, Oracle has defined Microsoft Azure as an Authorized Public cloud platform for licensing Oracle software in the public cloud. This means that Oracle is applying a unique licensing model that allows you to count vCPUs and not apply the Processor core factor table for on-premise licensing.

How to calculate Oracle licensing in Azure?

You need to calculate the number of vCPUs you deploy the Oracle software upon. 2x vCPU count as one processor license if multi-threading is enabled. For example, if you will deploy Oracle Database Enterprise Edition on an 8x vCPU instance – you will need to license that environment with four processor licenses.

Some examples, 

If you run Oracle Database Enterprise Edition in Azure, with multi-threading enabled:

• Two vCPU = 1 processor license from Oracle Database Enterprise Edition.
• Four vCPU = 2 processor licenses of Oracle Database Enterprise Edition.
• Eight vCPU = 4 processor licenses of Oracle Database Enterprise edition
• Sixteen vCPU = 8 processor licenses of Oracle Database Enterprise Edition.

If you want to license Oracle Database Standard Edition 2

• Two vCPU = 1 processor of Oracle Database Standard Edition 2
• Four vCPU = 1 processor of Oracle Database Standard Edition 2
• Eight vCPU = 2 processors of Oracle Database Standard Edition 2

You may not run Standard Edition 2 on more than eight vCPU instances. If you do, you need to license the enterprise edition.

What are the benefits of licensing Oracle on Azure?

• You only need to license the capacity you need by licensing on vCPU.
• Oracle licensing policy on virtualization (licensing all physical hosts) doesn’t apply.

Common Oracle licensing problems on Azure

• Review your territory clause in your Oracle Ordering Document, are you allowed to deploy Oracle where the Azure region is located?
• Review your licensing agreement for any other restrictions that may exist, preventing you from deploying in Microsoft Azure.
• Oracle Database Standard Edition 2 can only be licensed on an Azure instance with a maximum of 8 vCPUs.
• Oracle ULA usually does not allow you to count the Microsoft Azure deployments to your exit numbers. Review your Oracle ULA certification clause for details.

Constrained vCPU on Azure for Oracle License Optimization

Navigating the constrained vCPU on Azure for Oracle License optimization can be complex.

Here’s a simplified explanation:

Microsoft understands that pre-made instances may not always be ideal for running database workloads, which often require high memory, storage, and I/O bandwidth but not many processor cores.

Most Oracle database workloads are not CPU intensive. To address this, Microsoft introduced a concept called “constrained vCPU.” This allows you to reduce the vCPU count to half or even as low as 1/4 of the original VM size.

Since Oracle licensing is based on processor license, this can be an attractive way of licensing Oracle on Azure.

According to the Oracle cloud licensing policy for Azure:

• Count two vCPUs equivalent to one Oracle Processor license if multithreading of processor cores are enabled.
• Count one vCPU equivalent to one Oracle Processor license if multithreading of processor cores is not enabled.

There have been instances where Oracle Account Teams incorrectly state that you cannot limit the required licenses using the constrained vCPU model. However, a review of the Oracle cloud licensing policy clarifies this:

For licensing Oracle programs in an Authorized Cloud Environment, customers must count the maximum available vCPUs of an instance type.

• Since the other vCPUs are not available, this ends the case. You should only license the vCPUs that are available to you.

How to avoid/fight back against this if Oracle audits you?

If you’re facing an Oracle audit, here are some strategies to avoid or push back against it:

1. Information Sharing: Do not disclose the instance type you are running on. Instead, simply share the number of vCPUs. There’s no requirement to share your instance type.
   
2. Non-Contractual Policy: The Oracle cloud licensing policy document is “non-contractual,” as the footnote states. This means it doesn’t form a binding agreement.
   
3. Maximum Available vCPUs: The Oracle cloud licensing policy refers to the “maximum available” vCPUs. If no more vCPUs are available, this should be your limit.

We are specialists in this area and have assisted many clients in negotiating with Oracle. Contact us to understand how we can help you.

What is Oracle Database Cloud Service on Azure?

The Oracle Database Cloud Service on Azure is a collaborative integration that enables Microsoft Azure users to provision and access Oracle database services from within the Microsoft Cloud. These services run on Oracle’s cloud, creating a seamless interaction between the two platforms.

This service supports various Oracle offerings, including:

• Oracle Autonomous Database
• Exadata Database Service
• Oracle Autonomous Data Warehouse cloud services

These services operate in Oracle Cloud Infrastructure (OCI).

• Microsoft and Oracle have collaborated for several years to support interconnectivity between their cloud services. This partnership aims to provide low-latency connections, enabling users on either cloud to easily access services from both Microsoft and Oracle.

Three benefits of Oracle database service on Azure

1. Easier management of Oracle databases with a familiar Azure management console.
2. Access to Oracle cloud services, such as an autonomous database.
3. Ability to run Oracle on Azure without purchasing licenses using the cloud service.
   
   

Oracle Licensing on Azure – FAQ

How Redress Compliance can help ensure compliance with Oracle on Azure

Navigating Oracle licensing for Azure services can be complex, but our services are designed to simplify this process:

• License Compliance Review: We independently review your on-premise deployments using Oracle license compliance scripts to ensure adherence to licensing policies.
  
• Contract Review: We examine your contracts to determine if you can transition to Azure and assist in maintaining compliance during the move.
  
• License Optimization: Our services include helping you optimize your Oracle licensing on Azure to reduce costs and enhance efficiency.
  
• Advisory and Negotiation Services: If you need assistance with Oracle, we provide advisory and negotiation services to ensure your organization secures the best possible deal.
  
• Expert Guidance: Our experts are well-versed in Oracle licensing policies and can help you navigate complex licensing scenarios to ensure ongoing compliance.
  
• Ongoing Support: We offer continuous support to help you comply with licensing policies and leverage new features and capabilities as they become available.
  

If you’re planning to transition to Azure and want to avoid any Oracle license compliance risks, contact us to discuss how we can support your organization.