A five-minute grounding in how Oracle licenses its technology and application products, what the OMA and Ordering Document actually grant you, and what an audit or a licence review involves.
If you run Oracle Database, middleware or an application like E-Business Suite, the odds are that you run a lot of it and spend a great deal of money on it.
Like any large technology spend, Oracle licensing needs close management if it is to be optimised rather than allowed to create unacceptable risk — and Oracle compliance is complicated enough that risk accumulates quietly.
This is a five-minute grounding in how Oracle licensing works and where to concentrate a compliance and optimisation programme.
Oracle has hundreds of products across many platforms, but they split broadly into two categories — applications and technology — which are priced and licensed quite differently.
Across its products, Oracle typically offers both term (or subscription) and perpetual licensing.
A perpetual licence is a one-time fee that allows continued use of the program for as long as you comply with every term of the agreement. A term licence covers a specific, limited period during which you may access and use the software. Some products additionally carry a Restricted Use clause, meaning they may only be used under a set of documented conditions — for example, only in conjunction with a specified program.
Oracle licensing metrics are complex and vary enormously by product and by use case. Those metrics are what determine how you can and cannot use what you have bought.
It is easy to get caught out and unwittingly increase your financial exposure, so getting the metric right is not a detail.
Oracle’s technology products are licensed primarily on two metrics: Named User Plus and Processor.
To complicate matters further, Oracle requires you to factor in the processing power of the machines running the software. The Oracle Processor Core Factor Table deserves an article of its own; the point here is that the core factor is not optional arithmetic and it is not something you can eyeball from an inventory list.
Within its applications, Oracle typically uses three models, and any one product may be licensed under one, two or all three depending on the situation.
This allows a lot of flexibility, and makes it genuinely possible to mix and match metrics to suit different processes, business units or use cases.
The cost of that flexibility is complexity. The more models you run concurrently, the more closely you have to manage them if you want to avoid an unexpected bill.
Oracle uses a combination of written agreements. The overarching licence rights are described in the Oracle Master Agreement (OMA) — previously called the Oracle Licensing and Services Agreement (OLSA), or the Online Transactional Oracle Master Agreement (TOMA) — and the rights relating to specific products and services are described in the Ordering Document.
The OMA sets out the standard rights granted, along with ownership, restrictions, warranties, disclaimers and confidentiality, as they apply to all Oracle products and services.
The Ordering Document describes the specific products, the licence types, the number of users, the level of support and any discount a customer has ordered and will receive.
Together they grant you specific rights to use Oracle software and to receive the services you ordered. Your rights are limited to those expressly granted; all other rights in the programs are reserved by Oracle.
Because your right to use Oracle technology can be highly specific to the terms in your own OMA and Ordering Documents, any Oracle licence management programme has to be built on the rights you actually hold, not on a generic reading of “typical” Oracle licensing. Be wary of any tool claiming to support Oracle licensing if all it offers is a set of standardised rules.
Like every software vendor, Oracle protects its intellectual property, and your OMA contains a clause reserving its right to audit. Forty-five days’ notice is typical — which is precisely why Oracle licence management has to be a maintained position rather than a project you start when the letter arrives.
The audit clause specifies that “reasonable” assistance is required from the customer, and that such assistance includes running Oracle’s data measurement tools and providing the output to Oracle for analysis. If the analysis finds you non-compliant, you will be asked to buy licences to remedy it — typically without the discount you were given on your original purchase.
As well as a formal audit, Oracle can request a licence review. This is not the same thing, and contractually you are not obliged to co-operate. It is usually wise to engage anyway, to keep the working relationship intact.
Oracle’s audit and advisory work sits under Global Licence Management Services (GLAS), which brought together two functions:
LMS is the official auditor and reviewer of Oracle licences. Worth remembering: an audit is not the moment to optimise your licensing or negotiate a better deal. LMS has limited power to offer discounts or restructure agreements. Its job is to conduct the audit and identify shortfalls.
The original version of this article said that an advanced SAM tool would help you handle core factors “in the real world” and left it there. That is not a specification, so here is one — this is the level of detail an Oracle engagement turns on, and anything that does not reach it will leave you arguing from a spreadsheet.
CerteroX SAM holds a dedicated Oracle licence engine alongside engines for Microsoft, IBM, SAP, Adobe and Salesforce. For Oracle specifically that means:
There is also an unusually specific point of external validation here. Certero is a verified third-party tool vendor with Oracle: Oracle’s audit team can accept data from Certero during an official audit, as an alternative to installing Oracle’s own measurement tools. That is not the same as Oracle blessing your position — but it does mean the measurement work you do for yourself is not thrown away when the audit starts.
The position is computed continuously rather than reconciled at a point in time, which matters more for Oracle than for most publishers. The gap between “we were compliant in March” and “we are compliant” is where the finding lives.
This article only scratches the surface of why managing and optimising Oracle licensing is so hard, and how so many organisations get it wrong and end up with millions in unbudgeted Oracle spend.
That is why organisations that do control their Oracle spend either build licensing expertise in-house or contract a partner to supply it. Any tool claiming to optimise Oracle licensing without the need for expert licensing knowledge is over-selling itself, and a good tool exists to make an expert faster, not to replace them.
If your investment in Oracle technology outweighs your ability to manage it, the first job is to establish a firm understanding of your position, and only then to optimise it.
And do not do it in isolation. Oracle is one of many publishers you hold agreements with. Optimising Oracle without also considering Microsoft, IBM, SAP, Adobe and Salesforce is like checking the fuel level in your car without checking the tyres, the battery, the coolant and the brakes. A SAM programme should cover the publishers that carry real exposure across everything you run — not one publisher at a time, in a separate tool, on a separate schedule.
Other posts covering the same ground.
Locking an application down at user level does not make you compliant with a per-device licence. In a Citrix or RDS environment, one user with access can cost you a licence for every device in the organisation.
A third-party summary of a vendor can be wrong, and it stays wrong for as long as people read it. The case for checking a vendor's facts at source — and the current, sourced record for Certero.
An audit is won or lost on the quality of your inventory long before the letter arrives. Six ways data goes wrong, and what it takes to have the answer already in hand.
Everything argued above is checkable. Name the publisher, the billing account or the platform you would argue with, and the session is built around it — the reasoning attached, not a summary slide.
No gated download at the end of it.