Oracle Licensing and VMWare – The Final Word (Sort Of)

Over the last couple of months there have been a number of articles on the subject of the licensing requirements for Oracle software when running in a virtualized environment, specifically VMWare.  The opinions expressed in those articles range from “you need to license everything” all the way to the opposite “you don’t have to license anything.” Here are some articles that you may have read. If nothing else, they do have catchy titles:

After reading these articles, and a host of others, two questions pop out:

  1. Why are we seeing so much written about Oracle licensing and virtualization?
  2. What is the answer to the Oracle/virtualization licensing riddle?

Let’s start with the first question why is everyone writing about virtualization now?  Let’s be clear, Oracle has not changed its policies on vm licensing. They have a policy document on the website under their partitioning licensing  and that is the same as it’s been. No change there. In addition, we haven’t seen any contractual changes around this issue. The Oracle contracts are the Oracle contracts. Nothing new there.  The real issue is that VMWare has come out with some new functionality in their software. This functionality allows a user to move Oracle software more freely than before. The confusion is there because Oracle is interpreting their existing policies against this new functionality from VM Ware.  Surprise surprise, Oracle’s interpretation requires their customers to license more Oracle.  The other bit that is adding to the confusion is that there are other software vendors (not Oracle) giving users really bad advice when it comes to licensing Oracle software.

Now that we know why all the recent hubbub the question becomes, what is the answer to the Oracle licensing riddle around VM Ware? Do you need to license everything or just where Oracle is actually installed? I’m going to give you the answer now but before I do I want you to sit down, take a deep breath, and get ready. You’re probably not going to like the answer. Here goes…..the answer is……it depends!!! Ugh, I hated writing that as much as you hating reading that. But that is the truth. Your license requirements and how you present your compliance position to Oracle depends on what type of contracts you are in and whether Oracle is auditing you. Because Oracle does not make this issue clear in either their contracts or their policy docs (Remember that policy doc highlighted above? It specifically states that it is not part of your contract and it is for educational purposes only) you as the customer have some flexibility. The beauty of the ambiguity is that it gives you this flexibility. Embrace the ambiguity. But be smart about it.   Don’t paint yourself into a corner with Oracle and their audit team. That’s not a fight you want to have.

I worked at Oracle for 16 years. During that time I was their Global VP of Contracts, Business Practices, and also ran their license audit team (LMS) for a while. Over the last three years the Palisade Compliance team have been sitting on the other side of the table helping our clients through very sticky licensing and audit issues with Oracle. We’ve argued many sides of the VMware licensing requirement issue depending on what fit into the facts of the situation and what was best for our clients.  There is simply no right answer here.   Sometimes we’ve said you have to license everything, and sometimes we say you just have to license where Oracle is actually installed. It really does depend on the specifics of your situation. That’s where our 30 plus years of collective Oracle licensing and contracting experience really helps our clients. We know how to make “it depends” work for our clients.