Standard Edition Licensing Risk – What Will Oracle Do Next?

riskOracle recently announced some very major changes to how it licenses its Standard Edition set of products. In addition to rolling out SE2 and discontinuing SE1, Oracle also severely limited the hardware on which SE2 can run.  You can see all the gory details in our blog, here.  So even though on the surface the price may look the same, the licensing implications are enormous.  If you are not prepared for what Oracle is going to do next, then you could be out millions of dollars in unbudgeted and unnecessary penalties to Oracle.

Let me explain what’s about to happen:

Of course, Oracle isn’t going to pick up the phone and tell me their plans.  I would welcome that call!  But it’s not happening.   So we have to figure out Oracle’s next move a different way.  The way I often plan for Oracle is to think to myself, “What would I do if I were Oracle?”  It seems like a loaded question, but I think it’s a very good one to ask.  If I were running LMS, and my team was tasked with driving revenue for Oracle, what would I do with this recent change in policy?

If I were running Oracle LMS right now, I would be tapping into an amazing treasure trove of data looking for clients who license Oracle Standard Edition.  I would then have some very smart data analysts figure out parameters on size of company and buying patterns that would indicate these clients should (in Oracle’s mind) be spending more with Oracle.  Then I would audit them.   I would have teams of people auditing clients on this issue all over the world.   Think about it, the audit itself might not be that difficult, plus the potential upside could be huge.

Let’s think about the next step after Oracle audits.  Let’s say Oracle does audit you and they find out you are out of compliance.  What do you think they are going to do next?

  1. Forgive your sins and allow you to reconfigure to a compliant position at no cost?
  2. Despite taking SE1 off the price list, allow you to buy more SE1 under the old rules?
  3. Force you to migrate all your SE1 and buy much more SE2?
  4. Force you to migrate to Enterprise Edition?

My guess is that the answer is going to be #4.  They might do #3 above on occasion depending on the situation.

How much could #4 cost you?  Let’s take an Oracle customer running SE on a 4-socket server using 8-core processors per socket.  Since an Oracle SE2 maximum deployment is a 2-socket server, the user must pay a staggering cost increase to move to Enterprise Edition and license 32 cores, or “upgrade” to SE2 and buy two new database servers each with a maximum capacity of 2 sockets each, then split the deployment across the two servers.   However, if Oracle RAC is used, the situation changes.  Limitations and minimum user license restrictions are even more confusing.  Oracle Enterprise Edition license retails at far greater cost ($47,500 per core plus add-ons vs. $17,500 per socket) along with higher ongoing maintenance fees (22% of license cost)!  Keith at EnterpriseDB has explored this in depth with Max Shlopak from our team.

What can you do?

The worst thing to do is to sit back and wait for Oracle to do something.  Oracle Standard Edition licensees must take the initiative and solve this problem before Oracle solves it for you.  There are a host of options from reconfigurations to migrations to alternative products.  The specific solution will depend on your situations.   One specific recommendation I can give to all Oracle Database customers: call Palisade Compliance!