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Three tips to help reduce Oracle licensing costs

London councils are spending hundreds of thousands of pounds a year with Oracle. Controlling these costs is the first step in taming Oracle licensing

Many organisations have found that the amount they are spending with Oracle has increased, but savvy IT departments that are able to run older software, or are prepared to negotiate every minutiae of their Oracle contract, can curb their Oracle costs.

A Freedom of Information request for 30 London councils conducted by Tmaxsoft, which offers an alternative to the Oracle database, found that a third of councils had seen Oracle costs rise by up to 20% in the past two years.

Replacing Oracle when a contract is up for renewal, or using open-source alternatives for new projects, is among the strategies IT departments are using to drive down the level of Oracle licensing in their organisations.

ABN Amro Clearing Bank, for instance, has decided to use EnterpriseDB, which offers what it claims is a plug-in replacement for Oracle SE through the PostgreSQL open-source database. 

If swapping out Oracle appears radical, how about sticking with an older version?

Stick with SE

This month Oracle stopped its Standard Edition (SE) database. The last release was version 12.1.0.1. The upgraded SE2 is more expensive and, according to some experts, less resilient in its base configuration, which means IT departments could end up spending more to get less.

The SE database gave users the ability to run four sockets in a cluster using Oracle Real Application Cluster (RAC) to provide high availability with no limit on the number of CPU cores or threads that could be used.

The upgraded SE2 database limits performance to 16 threads and reduces the resilience, since RAC can now only be used on two sockets. One Oracle expert said: "With SE2, if the processer fails the server goes down."

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It also limits the number of named users to 10 per server, according to Oracle's own database licensing documentation.

According to Oracle licensing experts, the upgrade, which is available for free, will incur 20% higher maintenance.

In a blogpost regarding SE2, Jon Lingard, Oracle account manager at Explorer, wrote: "Oracle is offering a free migration to SE2 for SE1 and SE customers. However, new SE2 customers will generate more revenue for Oracle compared with purchasing SE/SE1."

For some experts, switching from SE to SE2 is not regarded as a good strategy to reduce Oracle costs.

Organisations can remain on SE if they do not apply any patches beyond those available for the 12.1.0.1 release, according to Daniel Hailstone, product specialist at database consultancy Xynomix. In a comment to an article on the company's website, Hailstone wrote: "The 12.1.0.1 release will continue to be patched for the next year, so you'll have access to those updates. Should you wish, you can discontinue your maintenance and support going forward. The 12.1.0.1 release marks end-of-life for SE and SE1 as products. You can continue to use SE/SE1 software as before, without the restrictions imposed by SE2. These changes will only come into effect should you move across to the new licence metric."

Oracle experts believe SE2 may also require many current SE users to buy new hardware, reconfigure applications and potentially suffer performance degradation.

Tackle the hardware

Sometimes, it may not be the database itself that is the biggest cost, but the hardware it runs on. Tom Grooms, CIO of the Valspar Corporation, a US international manufacturer of paint and coatings, wanted to stick with a stable ERP based on Oracle 11i E-Business Suite and selected Rimini Street for the support of the ERP to save on Oracle's maintenance fees. Grooms said the company made a huge return on investment by moving the Oracle database from 10-year-old HPUX servers to Red Hat running on x86 servers. He said: "Even though we had no plans to move to Linux, there was a huge ROI because our HP servers were 10 years old, and the maintenance on the hardware was expensive."

While Valspar uses EBS for its global operations, the company runs a single instance of the ERP software at its Minnesota datacentre. Grooms said that having a single instance of E-Business Suite, which runs on the Oracle database hosted in Minnesota, allows Valspar to scale the ERP and optimise license management. He said: "We added eight sites to Oracle in the past 12 months. The ability for IT to operate at the speed of the business is very important to us."

Partition tricks

As Computer Weekly has previously reported, some businesses choose to run Oracle on physical hardware due to the licensing constraints Oracle puts on virtualisation. In fact, Gartner warns that virtualisation and partitioning poses a large area of compliance risk for IT departments. At the Gartner Symposium in Barcelona in November, Joann Rosenberger urged CIOs to advise their IT procurement people to clearly define license usage rights and be aware of URL terms and policies, such as limits based on core-based or virtualisation licensing.

Andrew Hiller,  co-founder and CTO of Cirba, a company that specialises in optimising virtual machine placement, said: "Some of our customers say they won't be supported unless Oracle is run on physical servers, but if they push hard enough Oracle will support virtual servers."

However, the terms and conditions of Oracle's licensing means organisations need to pay the licensing for the whole physical machine, rather than just the virtual machines or partitions that Oracle runs on. Hillier said: "If you have an eight-way box, you will be charged for that, but if you can put more instances of Oracle on the physical server, you can optimise the workloads." He said that in general it is possible to run 48% more workloads on the physical hardware, enabling IT departments to maximise the use of their Oracle licenses.

For IT departments looking to get a handle on their Oracle licensing, there are three main choices. For contracts up for renegotiation or new projects, consider open-source alternatives; second, where possible stick with SE since it appears to offer better value than SE2. Third, licensing Oracle for a virtualised deployment is expensive, so it is worth considering how to maximise the number of Oracle instances that can be run on the physical hardware.

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