Oracle Multitenant Licensing Cost Optimization
Oracle Multitenant licensing can significantly impact enterprise IT budgets, but proactive strategies can help contain costs.
This article provides CIOs, CTOs, and IT procurement leaders with practical advice on reducing Oracle Multitenant licensing costs through smart licensing choices, effective use of Oracle’s policies (like the free Pluggable Database allowance), and negotiation tactics – all while maintaining compliance.
Multitenant Licensing Costs
Oracle Multitenant is an optional Enterprise Edition database feature with a high price point. The list price is steep—roughly $17,500 per processor license for the Multitenant option or $350 per Named User Plus (NUP).
These fees are in addition to the base Oracle Database Enterprise Edition license. Enterprises also pay annual support fees of about 22% of the license price, which increase each year.
For example, a single Multitenant processor license (~$17.5k) adds about $3,850 in support annually. All these expenses underscore the importance of optimizing your licensing approach.
Understanding these cost components helps in budgeting and ROI analysis. With Multitenant, every Container Database (CDB) that hosts multiple Pluggable Databases (PDBs) must be licensed if it exceeds Oracle’s “free” threshold of three PDBs.
Therefore, cost optimization starts with knowing your deployment details and following Oracle’s rules to avoid unnecessary purchases.
Read Oracle Multitenant Licensing Compliance: Audit and Best Practices for Enterprises.
Leveraging Oracle’s Free PDB Allowance
A key cost-saving opportunity is Oracle’s free PDB allowance. Since Oracle Database 19c, you can run up to 3 user-created PDBs in one CDB without purchasing the Multitenant option.
Smaller deployments or certain development environments can consolidate up to three databases at no additional licensing cost. CIOs should encourage architects to design around this allowance whenever possible:
- Consolidate up to three databases per CDB to maximize the license-free capacity.
- If more databases are needed without triggering the Multitenant license, use separate CDBs for groups of up to three PDBs each (remember that each CDB still requires an Enterprise Edition license).
- For testing or sandbox environments, keep PDB counts ≤3 To avoid unnecessary license spend.
Organizations can postpone or even avoid purchasing Multitenant licenses until absolutely necessary by fully utilizing the free PDB limit. However, monitoring PDB counts in each environment is crucial to ensure they stay within the free limits and remain compliant as systems evolve.
Choosing the Right Licensing Metric (NUP vs. Processor)
Choosing between Named User Plus and Processor licensing for Multitenant can dramatically affect cost. Named User Plus (NUP) licensing is often more cost-effective for environments with a limited, countable user population.
For instance, if an internal application will only be accessed by 40 known users, licensing the Multitenant option by NUP (with Oracle’s minimum of 25 NUP per processor) could cost less than a full processor-based license.
On the other hand, Processor licensing is better for large-scale or public-facing systems where the user count is high or indeterminate.
Key considerations include:
- NUP Licensing: Oracle requires a minimum of 25 NUP per processor for Enterprise Edition, which also applies to the Multitenant option. NUP licensing can be cheaper if you have a small, well-defined user base on a server. But if user counts are high or expected to grow, costs can scale quickly.
- Processor Licensing: This is a flat cost per CPU core (adjusted by Oracle’s core factor table) regardless of user count. It provides unlimited user access for that server. It becomes more cost-efficient once the number of users exceeds a certain threshold (typically a few hundred users per processor).
- Example: A server with two processor licenses would require 50 NUP licenses (50*$350 = $17,500) versus two processor licenses ($35,000). NUP is cheaper in this scenario with ~50 users; if the server count grows, the processor metric becomes more cost-effective.
Selecting the optimal metric requires accurate forecasting. CIOs should work with IT asset management teams to model different scenarios and choose the licensing metric that yields the lower total cost given their organization’s usage patterns.
Negotiating License Discounts
In contract negotiations, enterprise buyers can often secure discounts or concessions on Multitenant licenses.
For example, bundling the Multitenant option into a larger Oracle agreement (or ULA) can lower its cost, and leveraging competition or volume purchases can yield better pricing.
Aligning purchases with support renewal cycles and negotiating as part of a comprehensive deal are key tactics to reduce the effective price of Multitenant licenses.
Architectural Strategies to Reduce Licensing
Even infrastructure design can help lower licensing costs:
- Consolidate wisely: Limit the number of separate CDBs requiring Multitenant. Running more PDBs in fewer CDBs means fewer Multitenant licenses to buy (as long as each stays within performance limits).
- Use Standard Edition for small workloads: For databases that don’t need Enterprise Edition features, Oracle Standard Edition 2 can be a cost-saving alternative (though it doesn’t support Multitenant, it avoids that cost entirely).
- Decommission or merge idle databases: Identify databases that can be archived or combined into existing PDBs. Reducing the total number of databases helps minimize the number of Multitenant-enabled CDBs you need to license.
By aligning technical architecture with licensing considerations, organizations can avoid unnecessary purchases and ensure they fully use the licenses they buy.
Recommendations
- Maximize Free PDB Usage: Ensure each Oracle Enterprise Edition CDB hosts up to 3 PDBs before considering paid Multitenant licenses.
- Right-Size the License Metric: Use NUP licensing for environments with a small, known user base, and Processor licensing for broad or external user populations.
- Negotiate Aggressively: Don’t accept Oracle’s list price – leverage ULAs, bundles, and competitive alternatives to obtain discounts on Multitenant licenses and support fees.
- Plan for Support Fees: Budget the 22% annual support costs, negotiate caps on support increases, or consider third-party support if it aligns with your risk tolerance.
- Implement Strong Governance: Enforce policies to prevent inadvertently creating a fourth PDB so you don’t accidentally incur a license requirement.
- Audit and Reallocate: Review Multitenant usage regularly. Reassign or terminate licenses not actively used to avoid paying for shelfware.
- Explore Cloud Options: Evaluate Oracle Cloud database services or cloud BYOL programs. In some cases, using Oracle’s cloud subscription that includes Multitenant might be more cost-effective for short-term needs than buying perpetual licenses.
- Educate Stakeholders: Train DBAs and architects on the cost implications of Multitenant so that design decisions factor in licensing impact.
- Consider Timing: Align new license purchases with renewal periods to improve negotiating leverage and co-term support dates.
- Document Everything: Keep thorough records of your license entitlements, contracts, and deployments. This helps justify cost-saving measures and is invaluable during vendor discussions or audits.
FAQ
Q1: How much does an Oracle Multitenant license cost per processor?
A1: The list price for the Multitenant option is about $17,500 per processor (plus ~22% per year for support), in addition to that processor’s Oracle Database Enterprise Edition license.
Q2: Is licensing Oracle Multitenant by Named User Plus (NUP) cheaper?
A2: If your user population is small and well-defined, it can be. NUP licenses are about $350 each. NUP is cheaper if your total named users (minimum 25 per processor) result in a lower cost than processor licensing. A per-processor license often ends up more economical for a large or unpredictable number of users.
Q3: What is Oracle’s “3 PDBs free” rule?
A3: Oracle allows up to three pluggable databases in one container database (CDB) without requiring the Multitenant option license (for Oracle Database 19c and later). Creating a fourth PDB (or more) in the same CDB triggers the need to license the Multitenant option for that server.
Q4: How can I maximize Oracle’s free PDB allowance?
A4: Plan your database consolidation so that no single CDB hosts more than 3 PDBs, spreading databases across multiple CDBs if necessary to stay under the limit.
Q5: Will Oracle give discounts on multitenant licenses for big purchases?
A5: Oracle often offers volume discounts or better pricing if you negotiate. Enterprises that bundle the Multitenant option as part of a larger license or cloud agreement can usually get a percentage off the list price. It pays to ask and leverage your total Oracle spend for a better deal.
Q6: Do we have to pay Oracle support on Multitenant licenses every year?
A6: Yes, if you want to receive updates and support. Oracle’s standard support is ~22% of the license fee annually. This recurring fee is optional, but without it, you won’t get software updates (and you may lose compliance with Oracle’s terms). Support costs should be factored into your long-term cost of ownership.
Q7: What happens if we accidentally deploy a fourth PDB without a license?
A7: Oracle’s software will not stop you, but you would be out of compliance and risk penalties if audited. It’s crucial to avoid exceeding the 3 PDB limit.
Q8: Can Oracle Multitenant licenses be moved between servers?
A8: Yes, you can reassign Multitenant licenses between servers, but you cannot use one license on two systems at the same time. When moving licenses, follow Oracle’s rules (often a 30-day reassignment period) to ensure compliance.
Q9: Does Oracle offer a subscription (term) license for Multitenant instead of a perpetual license?
A9: Oracle does offer term licensing (like 1-year or 3-year licenses) for its products, including options like Multitenant. A term license has a lower upfront cost than a perpetual license but expires after the term. This can be useful if you only need the Multitenant feature for a limited time or want to treat it as an operating expense.
Q10: Are there alternatives to buying the Oracle Multitenant option?
A10: Alternatives include architecting your environment to stay within the free PDB limit (using multiple CDBs each with up to 3 PDBs), using separate single-tenant databases (sacrificing the consolidation benefits), or evaluating if Oracle Standard Edition (which doesn’t support Multitenant but has lower license costs) meets the needs of certain systems. Some organizations consider migrating workloads off Oracle to avoid extra licensing, but that’s a major decision beyond Multitenant considerations.
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