The Gorilla Guide to Oracle Licensing

Oracle’s licensing policies are incredibly complex, and punitive should a company get it wrong. There are those, in fact, who would claim that Oracle’s complexity is a feature rather than a bug; the less that admins and C-level executives understand, the more likely they are to make a mistake that will financially benefit Oracle.

About The Book

The Gorilla Guide to Oracle Licensing is an in-depth, comprehensive resource designed to demystify the complex world of Oracle software licensing. Aimed at IT managers, financial directors, procurement professionals, and software asset managers, it illuminates the intricacies of Oracle's licensing policies, helping readers to understand the nuances and avoid potential pitfalls. From navigating the multi-layered aspects of Oracle’s database and middleware licensing, understanding different support options, to handling audits and negotiations, the guide delivers a broad range of information that empowers readers to optimize costs and ensure license compliance. Through concrete advice, best practices, real-life case studies, and expert insights, the Gorilla Guide to Oracle Licensing provides an indispensable roadmap for anyone dealing with Oracle's licensing landscape.

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Chapter One: All About the Benjamins

Oracle is well known across IT organizations for two things: its high price and its aggressive licensing au- dits. Oracle produces relational database management (RDBMS) and line-of-business software that runs the core business functions of many large organizations. However, in recent years, the growth of these businesses has been challenged by several factors.

First, many organizations have embraced open source RDBMSes such as PostgreSQL or MariaDB, which can be used for custom development projects and don’t come with Oracle’s high price tag. In the analytics space, other open source solutions such as a Spark and Hadoop have challenged the premise of the traditional data ware- house. Additionally, competition from cloud vendors Amazon and Microsoft has chipped away at Oracle’s new license sales.
What this all adds up to is that to drive revenue growth, Oracle has looked at increasing revenue from existing customers rather than from new license sales, which have been declining as a percentage of revenue for the company in recent years and confirmed by statements from Oracle’s leadership.1
Oracle’s business model is standard in the software industry. Customers purchase software at an upfront cost (which in Oracle’s case is often highly discounted), and pay an annual support fee, which covers patches and upgrades to the software, as well as vendor support. If your support costs increase by 4% a year (average), your support costs will exceed the initial licensing costs after 4 years.

But there’s a catch: Oracle has the right to increase the support costs by a few percent a year, using a technique that’s known as re-pricing. If you have been using Oracle for a decade or more, your support costs may be substantially higher than what you would expect based on your discount at time of purchase. It’s a good idea to calculate your support costs over a 4-5 year window. If your support costs increase by 4% a year (average), your support costs will exceed the initial licensing costs after 4 years.

The licensing of the Oracle RDBMS is complex and has a wide array of options that carry an additional cost. Many of these options are built-in to the product and are prone to unintentional use by an unknowing administrator.
In addition to this complexity, Oracle maintains a very aggressive audit program, which can be financially pun- ishing to organizations who don’t maintain a detailed account and understand the software and options that are in use. The main goal of this audit program, which is run by the Oracle License Management Services (LMS) team, is ultimately to drive revenue.

The LMS team is unforgiving for customers who fall outside of the scope of licensing terms. Traditionally, Oracle has done its own audits with LMS. In recent years, however, they’ve increasingly begun outsourcing audits to third parties, particularly in Europe.

Why People Download This E-Book?  

Expert Insight: The Gorilla Guide provides invaluable insights from industry professionals who have extensive experience navigating Oracle's complex licensing structures.
Cost Optimization: By understanding the intricacies of Oracle licensing, you'll be able to make informed decisions that can significantly reduce your organization's software expenditure.
Audit Preparation: The guide contains vital information on how to effectively prepare for and manage Oracle audits, potentially saving your organization from costly non-compliance penalties.
Negotiation Skills: It offers strategies for negotiating with Oracle, enabling you to secure the best possible terms and conditions for your software licenses.
Clarity and Confidence: The Gorilla Guide simplifies the complexities of Oracle licensing, providing clarity and confidence when dealing with Oracle contracts and their potential implications.

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