Saving money by understanding Oracle licensing, part 1 lic saving basics

Saving money by understanding Oracle licensing, part 1

Oracle and licenses. The general feeling most of the time is that you pay too much for the use of the Oracle products, and it’s not always sure if you are compliant, because of the complexity of the rules. This – hopefully clarifying –  blog is part of a small series and is an updated blogpost of one I wrote a few years ago, published on my private website. Since then the (Oracle) world has changed a bit, felt the need to update, and I will try to give some clarity about the licensing model which will hopefully help you to save money by utilizing your Oracle Environment. I’ll start with the basics (part I), in the next post I will treat topics like virtualizing, engineered systems, SE2, Unlimited License Agreements, Cloud and so on. And of course, if there are still any questions left, just leave a reaction, or make use of our licency check.

The information in this post is not intended to be used as legal statements or sources for negotiations with Oracle. I will be referring to some other documents and blogposts which can and should be used. The information is not exhaustive but will hopefully give the reader a guide how to cope with the model of Oracle at this moment (2016).

Subjects in this part 1:

  • Scope : Full Use / Hosting
  • Development and testing environment
  • Prices and contract
  • Databases species 
  • Types of licenses
  • Processor / NUP / Employee based
  • Support


Scope : Full Use / Hosting.

  • imageThe following models are to be recognized:
    • Full Use  = end-user license, suitable for running tailor-made applications. The legal entity of the firm is owner of the full-use license.
    • Application Specific Full Use (ASFU) = Example:  SAP. You can only use the Oracle software for that particular purpose.  Not even allowed to use Enterprise Manager Packs.
    • Embedded Software License (ESL). Only to be used for specific to be used applications, and the database schema is not accessible to the end user but only to the application (runtime).
    • Hosting licenses :
      • Generic Hosting. Third party or multi application hosting. Multiple customers
      • Propriarty Application Hosting (PAH). Single application, multiple customers
      • Specified End Users. Hosting Environment dedicated to a single end user.

    For the Hosting licenses approval is needed by Oracle !

    Scope for this post:  ‘Full Use’ – model, in a post later on I will talk about the different Hosting licenses (which is different from Cloud-credits ! ).


    Development- and test- licenses.

    You may use the Oracle software free for generally 30 days , after downloading and installation.  This period may sometimes be extended to (generally) 90 days after consulting Oracle, and is used for ‘proof of concepts’ and that kind of stuff.

    Development- and test- environments for an application must be licensed, with one rare exception.

    The exception and the rules around development and testing I described in this blog.


    Prices and contracts, what are you paying for

    First year’s costs can be calculated as: ( purchase – purchase discount) + support costs (22%). Support costs are calculated of the purchase minus the discount.

    You get support as long as you pay the yearly support costs. Oracle has the right to increase the support amount with a few percent a year. So when you are a local customer for a decade or so, the support costs may be substantial higher, and may not be in proportion anymore with the discount you got at the beginning.

    Licenses without support of perpetual licenses is possible (first year support is mandatory), but then you have got no access to Metalink support, patches and upgrades. Be aware, there’s a huge difference between stopping the support, and eliminate the license. When just stopping the support, you will still be the owner – in the case of perpetual license – !!  When you made a mistake, and want to get into support again after a period of time, you’ll have to pay a so-called re-instatement fee. This is all explained in the Oracle Software Support policies.

    Purchase is also possible for a period of 1, 2, 3, 4 or 5 years (Term Licenses), support is based on the price of the perpetual licenses!.


  • More on support later on. On are the  so-called ‘list-‘ prices in dollars.   These are the prices with no purchase-discount at all. This discount depends greatly on the volume you buy, and there are some fixed ‘staggered’ discounts you can agree on with Oracle. By the way:  the discount is based on the sum of the purchases. When you decide over time to end a part of the purchase, this will lead to a recalculation, and could be influencing your yearly costs, because of stumbling into a lower staggered discount.Prices will be adjusted on a regular basis. Changes will occur within June, see also this blog. For Europe, changes will also depend on  the rate of the dollar.Oracle has also a so-called  ‘Matching Service Level Policy’: sometimes it does not matter what you are using, but it does matter what you bought in the past. Example: you purchased database licenses for 3 servers together with 3 diagnostic and tuning pack licenses. Termination or stopping the support of the diagnostic and tuning pack licenses is not allowed. Those management-packs are linked one on one to the databases, consequence is that you have to terminate or stop the support of the databases as well. Oracle does not pro-actively monitor this at this time.. only on an order-by-order basis, and when customers try to de-support a part of the license stack later in time. So it helps sometimes to act low-profile….

    Species of databases

    • Enterprise Edition. Most expensive, complete database.
    • Standard Edition 2. Less functionalities, e.g. no online index rebuild, on servers with a maximum of 4 sockets and limit itselfs to 16 threads. But includes RAC. A lot of questions are answered by this blog.
    • Personal Edition (single user database)
    • Oracle Express edition

    Differences in functionality you can read here.

    Enterprise Edition is required with the following configurations:

    • When the server has got more than 2 sockets or
    • You are using Oracle Enterprise Manager Packs, like Tuning pack or
    • You are using Database Options (e.g. Partitioning)

    You have to pay for the Database Options, besides the ‘default’ Enterprise Edition database licenses, e.g.:

    • Real Application Clusters
    • Partitioning
    • Advanced Security
    • Database Vault
    • Advanced Compression
    • Active Data Guard
    • Real Application Testing
    • Label Security
    • Total Recall
    • Spatial
    • In-Memory Database Cache
    • Data Mining
    • OLAP
    • Media Pack

    No licenses necessary:

    • Apex  = Oracle Application Express, included in Standard ánd Enterprise Edition
    • Oracle Express edition

    Types of licenses

    With ‘Full Use’ licenses you can choose from 3 types of licenses:

    1. Processor based  (Proc)
    2. Named User Plus (NUP)
    3. Employee (EMP) – license.

    1. Processor based (Proc).

    You pay per processor, but a processor according to the definition of Oracle. As the processors become increasingly powerful and have multiple cores, Oracle has created a “core element”.

    For Intel and AMD dual-core CPU typically a factor of 0.5 for each core is used, so Oracle will count this processor as 1  Oracle processor (2 cores x 0.5 = 1). This is no different from the number of CPUs in this case. But customers also uses servers with 2 quad core cpu’s. Suppose this has also a factor of 0.5, so Oracle will count this as four processors: 2 CPUs x 4 cores = 8  cores.  8 cores x 0.5 = 4 Oracle processors.

    The core-factor-table Oracle uses is to be found here.

    Thus, if a database on a server is installed on two quad core processors running as previous example, 4 processor licenses must be paid for. On that server you are free to install multiple databases, regardless of the version! The processor-based license is paid per server and not per database.

    Another example:


    Oracle is not supporting virtual servers, except their own OracleVM solution. As a consequence, when using virtualization with VMware for example, the underlying number of hardware processor are calculated.
    Extreme example: on a cluster ESX (VMware) with 3 nodes, each with two quad core processors, a VM is created. On a VM is an Oracle database installed, and one (1) virtual processor is assigned. This virtual server is actually only uses one core of the available 24 (3 nodes x 2 CPUs x 4 cores). License-wise you pay  the underlying hardware (24 cores). When the factor of the CPU concerning is e.g. 0.5, then you will be settled on 24 cores x 0.5 = 12 processors for this one database.

    2. Named User Plus (NUP).

    What does it mean:
    • A person in any way data viewing and / or importing data into an Oracle database
    • A non-human operated device. This may be scanning robot for example, but also an information board at a station, if it also actively approaches the  database. A batch process, however, is not considered as Named User. This is an escape worth thinking of !
    • With multiplexers (such as application servers) the real users are counted and not just the user that the database approaches.

    When the application server is connected to the outside world (web application),  it is not possible to license under NUP, and you have to buy processor-based licenses. But this is negotiable. When you can prove that only a few users in the outside world can have access to the inside, it may be licensed under NUP’s.

    The name also suspect that there’s a “Named User” license exists without ‘Plus’. In the past it did exist indeed, but with the recent licensing change, this was changed in NUP.

    A named-user is attached to Oracle software, but with a minimum purchase. You may not purchase a database license with e.g. 2 named-users. Oracle will take the server as base. For an Enterprise Edition is a minimum purchase of 25 users per processor (definition of Oracle) required, for a Standard Edition-2 a minimum purchase of 10 per server.  An application server 10 per processor.

    Example 1:



    Example 2:


    3. Employee based  (Emp).

    Definition of employees:

    • Full-time
    • Part-time
    • Temporary staff
    • Hired consultants
    • Staff of companies which are executing the outsource of that company.

    This type of license is for a limited number of products possible, for example BI Publisher.
    Not the users of the system are counted, but the number of people who are employed, fixed, temporary or outsourced.


    Oracle has got a Lifetime Support Policy , This means that there is always support for different versions, but is limited after the ‘normal’ support period (five years after general availability date).

    Premier support usually ends five years after the release of a version. When a customer really wants it, he can buy off the same level of support by switching to extended support.

    For extended support you’ll have to pay extra:

    • Year 6 after product release: 10% of current year’s Software Update License & Support
    • Year 7 after product release: 20% of current year’s Software Update License & Support
    • Year 8 after product release: 20% of current year’s Software Update License & Support

    Extended Support offers the following:

    • Updates, fixes and security alerts
    • Tax, legal and regulatory updates
    • Upgrade scripts
    • Technical support
    • Major product and technology releases

    Quotes Oracle for sustaining support:

    Sustaining Support will be available for as long as you license your Oracle products. With Sustaining Support,you receive technical support, including access to our online support tools, knowledgebases, andtechnical support experts. You benefit from

    • Major product and technology releases
    • Technical support
    • Access to My Oracle Support
    • Fixes, updates, and critical patch updates created during the Premier Support stage

    Sustaining Support does not include:

    • New updates, fixes, security alerts, data fixes, and critical patch updates
    • New tax, legal, and regulatory updates
    • New upgrade scripts
    • Certification with new third-party products/versions
    • Certification with new Oracle products


    1. Software Investment Guide:
    2. Processor-factor tabel:
    3. Pricelist:
    4. Support:
    5. Echange rate:
    6. Development / testing:
    7. SE 2 questions:
    8. Differences species:
    9. AMIS licency check: