An orientation in Oracle licensing: what development, test and production environments each require, how support agreements change your rights, and the difference between Processor, Named User Plus and the legacy metrics you may still be carrying.
Oracle licensing is complex and it keeps moving. Staying on top of the rules, and of what they mean for your organisation, is as difficult as it is frustrating.
If you want to understand Oracle licensing, a firm grasp of the basics is the obvious place to start. This article covers three core areas:
It scratches the surface. There are more layers of complexity underneath every heading below, and anywhere a real decision or a real number is at stake, the authority is your contract and Oracle’s current published licensing rules, not a summary.
In a development environment you may use Oracle products provided you download them from the Oracle Technology Network, which requires you to accept the licence presented at download — historically the OTN Development Licence. As you would expect, it is a limited grant: it gives you the right to develop applications using licensable Oracle products, not to deploy them.
That licence sits outside the Oracle Licence and Services Agreement and places real restrictions on what you can do. Only one person may use the downloaded products for development, and the work must be performed on a single server. Products downloaded from the OTN may not be used for any other activity, for internal data processing, or for commercial or production use.
Read the terms you accept at download each time. Oracle has published several different free-use and developer licences over the years, and they do not all say the same thing.
Everything in your test environment is subject to the same licensing requirements as production. There is no test discount and no test exemption. You must hold sufficient licences under the Oracle Licence and Services Agreement, or another valid Oracle agreement, exactly as you would for a live system.
This is the single most common source of unbudgeted Oracle liability, because test environments get built quickly, by people who are not thinking about licensing, and then never get decommissioned.
All Oracle products used in production must be licensed, through the OLSA or another Oracle agreement.
Across all three environments, the prerequisite is visibility: you cannot license what you cannot see, and Oracle databases have a habit of appearing on infrastructure that nobody expected to be running one.
Oracle support contracts are provided under perpetual or subscription licences.
If you hold perpetual licences, support is charged separately each year. With a support agreement in place you can contact Oracle directly for assistance, and you gain the rights to use almost all the latest versions of Oracle’s software, including previous versions that are still supported. For some products your support agreement may not confer those rights, so check your terms and conditions rather than assuming.
Support agreements add a layer of complexity that catches people out, largely because historically agreed terms remain valid and active today. Do not rely on your invoices to understand what your licences entitle you to use. Support invoices do not convey the complexities that matter, and reading a renewal quote as if it were a statement of entitlement is how organisations discover they have been paying support on licences they no longer deploy — or worse, deploying products they never had.
For subscription licensing, support is provided as standard. But when the subscription period ends, so does the support agreement and so do your rights to use the software. That cliff edge needs to be on a calendar, not in someone’s memory.
A common misconception is that Oracle licensing is built on Unlimited Licence Agreements. It is not. Oracle’s standard metrics are Processor and Named User Plus, and everything else — including a ULA — is a commercial arrangement layered over them. Understand the metrics first; the contracts make far more sense afterwards.
Where users cannot be counted or verified, Oracle uses processor licensing. Web applications are the classic example: they are hosted in environments where counting users is impractical or impossible.
To calculate the requirement, multiply the total number of cores in the processors used by a core processor licensing factor. That factor is specified in Oracle’s Processor Core Factor Table, which is referenced by your contract’s terms and conditions. Payment is per processor used to run the Oracle software — but Oracle has a specific definition of “processor” that may not match the one used by your hardware vendor. That mismatch is where a lot of exposure hides.
If you are licensing under Standard Edition 2, a processor is counted as a socket rather than by cores, and SE2 carries its own limits on the number of occupied sockets a server may have. Where multi-chip modules are involved, each chip counts as a socket. Oracle retired Standard Edition and Standard Edition One in favour of SE2, so if either name still appears in your records, that is a flag worth chasing.
If you hold Named User Plus licences, product minimums apply. Minimums are calculated after the number of processors requiring licences has been determined, and they differ by edition. The quantities change, so take them from Oracle’s current published licensing rules for the edition you run rather than from any article.
Processor licensing is not offered for Personal Edition.
One thing a 2019 article cannot tell you: for Oracle software deployed in authorised public cloud environments, Oracle applies a separate published cloud licensing policy rather than the Core Factor Table. If any part of your Oracle footprint runs on AWS, Azure or Google Cloud, that policy — not this section — governs how you count it.
Oracle’s user-based licensing covers the individuals and devices with the ability to access your Oracle software, irrespective of whether they actually use it. Ability, not activity. That distinction is the whole game.
Named User Plus (NUP) is the main user-based licence and is available for many Oracle products. Under NUP, automatic batching of data from computer to computer is permitted: if you store data in one relational database and batch it to a data warehouse running Oracle technology, you as a user of the first database are not thereby a named user of the warehouse.
NUP can only be used in countable environments, covering employees, contractors or internally used applications. Many Oracle customers use it for development and test environments, where the population is small and known.
Named User is a legacy metric, no longer sold to new customers, but it may still sit inside existing agreements. It covers individuals authorised to use Oracle software on your servers, irrespective of active use — employees, contractors, and also customers who use your Oracle products directly or indirectly through other applications. Non-human devices such as sensors and other IoT equipment may also need counting as named users, which is the detail that turns a modest user population into a large one without anybody noticing.
Under Named User Plus, a user is any “end-node” that receives or creates data from an Oracle database. That can be a person or a system, and the Oracle user minimums rule applies.
Concurrent Device licences are no longer available to new customers but may form part of existing agreements. Oracle defines them as the maximum number of input devices connected to the designated system at any given point in time. There is also a network licence variant.
Application Specific Full Use (ASFU) licences are sold by Oracle Solution Providers alongside third-party application packages — for example an ASFU licence acquired with an SAP system. The resulting licence is specific to that application and cannot be used for anything else. Using an ASFU licence to cover a general-purpose database is a compliance finding waiting to happen.
There is no escaping it: Oracle licensing is genuinely difficult. The subtleties that drive cost are numerous, interdependent and subject to change.
Broadly, you have two routes.
If you have good Oracle licensing knowledge in-house, you may decide you know enough to optimise your position internally. You will still need technology that gives you full visibility of deployed Oracle software and databases, and you should store entitlements, contracts and support documentation centrally so they are to hand at a true-up or an audit.
The bar for that technology is specific, and it is worth testing candidates against it. A generic tool will tell you that you have 400 installations of Oracle Database. It will not tell you which options and management packs are enabled, which cores are licensable under which core factor, or which hosts are covered down by an Enterprise Edition pool. That gap is exactly where the audit finding lives.
CerteroX SAM covers options and packs with supporting evidence and the ability to override a detection, processor types and core factors, licence pools with hosting rights and geographic rules, cover-down logic for Enterprise Edition, uncapped quantity handling for unlimited agreements, and E-Business Suite responsibilities. On the contract side it holds licences, transactions, agreements, maintenance, suppliers and publishers, with subscription flags and expiry tracking — which is how the support cliff edge described above becomes a date in a system rather than a surprise.
Certero is also a verified third-party tool vendor with Oracle License Management Services. In Certero’s published wording: being a verified third-party toolset means that Oracle’s audit team can accept data from Certero during an official audit, as an alternative to installing Oracle License Management measurement tools. That is a conditional rather than a guarantee — but it is a materially better starting position than arriving at a review with spreadsheets.
If you do not have Oracle licensing specialists with the skills and experience to drive a tool of that depth, the expertise can be contracted rather than hired. Certero provides a SAM managed service.
NHS South West London ICB’s ITAM Asset/PSL Manager, Reece Emson, describes what that compresses: “Certero’s SAM managed service allowed us to significantly mature our license posture at a fast pace, something that would have taken 3-4 years without their involvement.”
Left unmanaged, one of two things happens to your Oracle spend. Either you overspend, consuming more than you need and never optimising the deployed databases and applications. Or you take a financial shock when an audit or licence review reveals how much Oracle you are really running and what it is going to cost.
Whichever route you take, the objective is the same: discover and inventory every Oracle deployment, then keep that position current. CerteroX SAM computes a continuous compliance position rather than a point-in-time reconciliation, so the answer you would give Oracle today is always available — not assembled under pressure once the letter has arrived.
If you want to know more about how Certero can help, talk to our team.
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