In September 2019, Oracle and VMware announced a new “partnership” of cooperation. Many Oracle customers were hoping this new arrangement would relax Oracle’s draconian licensing approach when running their software on VMware. Unfortunately, there has been no change in Oracle’s approach, and they continue to audit and extract money from their customers over this issue. Like almost everything Oracle does in the licensing world, what should have been good for their customers has actually caused more confusion and risk as companies let down their guard and assumed Oracle and VMware had “figured out” the licensing issues.
Because your contracts are most likely silent on this issue of virtualization and licensing, they are also open to reasonable interpretation. One thing, however, is clear; either you pick a licensing strategy that fits with your contracts and business needs, or Oracle will pick one that meets Oracle’s needs. This short article is designed to help you understand how you can take control of your licensing, and pick an “Oracle and VMware” licensing strategy that works for you and avoids unexpected and unwarranted fees to Oracle.
Here are the 4 strategic steps we recommend for a successful licensing strategy for Oracle and VMware, while controlling your costs and minimizing your risks.
Step 1 – Understand your company profile
Every company has different priorities and goals and cultures. These often change over time as new business and economic realities appear, and new personnel come in and out of an organization. When determining how you will license Oracle running on VMware, ask yourself these types of questions to understand your profile:
- Do you want to follow what is in your contracts or are you okay to allow Oracle to introduce non-contractual documents in your licensing?
- Do you believe Oracle can randomly change non-contractual policies that could have a material impact on your licensing, or do you believe in contractual certainty?
- Are you more comfortable with minimal distance between yourself and Oracle’s non-contractual policies or are you okay with a gap that must be defended later?
- Do you want to spend more money on Oracle licensing or less?
- What is the best technical solution for your company
Your answer to these questions, as well as other factors that may be specific to your organization, will determine your company profile and help you decide on the licensing strategy that’s right for you.
Oracle is attempting to force customers running on VMware to license based on how these workloads potentially may be deployed, rather than based on how they are actually deployed.
Step 2 – Understand your VMware software
Different versions of VMware have different sets of functionalities. For example, vMotion functionality was not available in older versions of VMware. More current versions of VMware have vastly different capabilities, and Oracle has taken very different approaches to license requirements, depending on the version being used. It is critical that you understand the VMware version in use, as well as its capabilities, so you can understand how Oracle would approach that usage. Oracle generally takes the position that earlier versions of VMware require fewer Oracle licenses.
NOTE: Oracle attempts to connect VMware to your contract(s) through the first line in the Processor definition: “shall be defined as ll processors where the Oracle Programs are installed and/or running”. vMotion allows for these workloads to migrate across the physical resources, and therefore, all physical processors where the VMs are installed. Oracle is attempting to force customers running on VMware to license based on how these workloads potentially may be deployed, rather than based on how they are actually deployed.
Step 3 – Understand your licensing options
Because your Oracle contracts do not mention licensing in a virtualized environment, those contracts are subject to reasonable interpretation. Lack of clarity can present uncertainty. It also presents opportunities for you and your organization. Companies all over the world are running Oracle on VMware. Those companies take many different positions on licensing. Based on your company profile and the version of VMware in use, you may decide on any one of these licensing strategies.
- License only the processors that are actually running the Oracle software
- License the entire server
- License at the cluster level
- License at the vCenter level
- License all your vCenters
- Other creative licensing methodology?
Every one of these licensing methodologies has been applied successfully, and unsuccessfully, by companies all over the world. The key to success is knowing how to justify the good faith application of judgement in your specific circumstance.
Step 4 – Build your palisade – understand your position
Whatever position you take, you must be prepared to defend your reasoning. This defense must address challenges from Oracle, concerns from your own management, and questions from technical staff.
If your position is not in line with Oracle’s published non-contractual policies, then you should have all the technical data and reports needed to show your license usage did not cross the threshold you set when you arrived at your license position. For example, if you are unable to migrate VMs running Oracle programs across vCenters without considerable time and effort, (e.g., having to re-partition the disk array in order for migrated VMs to have access to the data) then you should retain documentation of this configuration.
If your position is in line with Oracle’s views, then you are going to spend a lot more on Oracle software. You will ultimately have to defend that position internally as your management and executive teams will be asking many questions.
If your position requires that you abandon the technology or VMware version that is the best fit for your company operations, then you will have many people asking you questions.
Final thoughts (for now) on Oracle and VMware
Building your palisade (defense) based on your contracts, technical reports, data from your usage of the software, and your company profile and goals will help you understand and defend your licensing position. VMware is the most used virtualization technology. Companies get value from the functionality and the benefits it offers. If that technology is good for your business, then there is a path to run Oracle on VMware while controlling your costs and minimizing your risks associated with using Oracle.
Further content on Oracle and VMware
Read our article, Licensing Oracle on VMware in 2025.
We have more than 350 clients around the world successfully running Oracle in virtualized environments. We successfully defended Mars Inc. in their virtualization license dispute against Oracle. Our team of experts is always available to help, whether you are looking to get a proactive position on your licenses, or you are staring down the barrel of an Oracle audit. For help creating and executing on a licensing strategy around Oracle, please reach out to us for a free initial consultation.