Oracle doubles cost of licensing to Oracle DB in competitors Cloud vendors

It’s nothing new that in the last years Oracle Corp. has changed the way to deal with clients and its licenses. Auditing  and notable changes in its licensing model has happened frequently where can highlight recent changes on the license Standand Edition 2 and decommissioning of licenses Standard Edition One and Standard Edition. That somehow pushed clients to purchase more expensive licenses plus Oracle has not shown itself flexible as before.  The last bad news from Oracle is that doubled the cost of licencing of Oracle Database in the cloud it supports,  AWS and Azure. That kind of move should speed up the leaving of Oracle because Oracle is clearly braking a natural move in the IT industry, the migration to cloud.  In a scenario where more and more the people are fed up with expensive licensing, proprietary software, and vendor lock-in. Ten years ago there were not so many good database options on the market like nowadays but today Oracle relies on proprietary applications that only run on Oracle Database or legacy applications that have written many features on the DB side taking advantage of the many good features that Oracle DB offers. So today Oracle relies on these assets: the cost of migrating these legacy systems along with the fear of performance loss that can happen when migrating to other RDBMS’s. We see in the forums that in many shops there are strict orders to don’t build new applications on Oracle DB. Perhaps if Oracle applied more reasonable prices such move could be slowed down. The products and their features need no comments but seemingly Oracle is preferring to put customers against the wall looking for immediate results making their customers have to opt for new RDBMSs on the market for their applications.

The calculation change in the supported (and competitors)  Clouds

Recently Oracle has made an announcement that caught the users and architects by surprise. It has changed the form of license calculation required for AWS and Azure, only licensed cloud providers today. The official document can be found here. The change in practical terms doubles the number of licenses that was required to host your database in these clouds.

For authorized cloud providers Oracle products are licensed per physical core. A physical core in the cloud equates to a Intel physical core . The distribution of physical cores in the clouds varies depending on the cloud provider and whether it uses hyper-threading or not. In AWS each vCPU is associated with a single thread due to the use of hyper-threading so every 2 vCPUs are equivalent to one physical core. In Azure each vCPU is directly associated with a physical core, since Azure does not use hyper-threading. Oracle database licensing in the cloud before the January announcement worked as follows:

TypevCPUsPhysical cores# Licenses
Physical server--88*0.5=4
AWS (EC2/RDS)1688*0.5=4

After the fateful January announcement Oracle removes the factor that multiplies by 0.5 the number of licenses required for each core and the number of licenses required to run Oracle Database in the Cloud doubles:

TypevCPUsPhysical cores# Licenses
Physical server--88*0.5=4
AWS (EC2/RDS)1688

The main difference is that now the Core Factor does not apply to cloud providers, so the “0.5” is no longer part of the calculation. So any Oracle Database that hosts on AWS or Azure will cost twice as many licenses as it did before. It is obvious that previously signed contracts are still valid against the new licensing model.

But why does Oracle do this?

If I had to answer that question with just one name (or a name of a product) It would be: Oracle Cloud Platform. Since the changes in the Standard licensing people has realized a strategy of trying to take small and medium sized customers migrate to Oracle Cloud. Now in the face of this recent change in the calculation there is another move to push the using of Oracle Cloud in case of the customer’s strategy is to use Oracle Database in the cloud. AWS and Azure are direct competitors to Oracle Cloud and are far ahead be either in terms of market share or features and APIs. There are those who overstates and say that such Oracle strategy is so anti-competitive as the used by Microsoft with Internet Explorer in 2001, when it was accused of market monopoly. For environments running on VMWare so far nothing changes, just need to license all CPUs.

And what are the other RDBMS options in market ?

  • SQL Server 2016

With a licensing model similar to Oracle DB but a much more affordable price Microsoft’s database has led the market and is not behind for Oracle in terms of performance and security, taking great advantage when it comes to business intelligence. Such as DBA I have to say that the Oracle database is much more malleable in administrative terms, but here our focus is cost. In addition, MS offers migration and free training services to companies willing to migrate from Oracle to SQL Server.

More info:

  • EDB Postgres

EnterpriseDB is the company that offers an enterprise version for the open-source database Postgres, such product is called EDB Postgres Advanced Server and EnterpriseDB adds improvements of administration, security and performance to the open-source version. Along with this, EDB has created full compatibility with Oracle DB, with the aim of support  PL/SQL code, user-defined functions, triggers, datatypes and so on without any change. The licensing model is based on annual subscriptions based on the number of Unicores (physical CPU or vCPUs) and is priced well below SQL Server 2016. It is clear that EDB aims to squeeze part of that share of consumers who are pressured by Oracle and are willing to meet the migration challenge.

More info:

  • Azure SQL

For those seeking the benefits of being in the cloud such as availability, scalability, hardware administration abstraction, and lower cost of maintenance there is the Azure SQL option that is SQL Server offered as a Service in the Microsoft Cloud. SQL Azure allows Geo-replication which is the availability of a secondary offline node within the same geographical area but in a different region. Some feature limitations need to be verified yet. As with most cloud services, the billing model is for used hours and the levels of service offered are Basic, for small databases, Standard, the to-go option for default applications and Premium, for databases with high number of concurrent transactions and users.

More info:

  • AWS Aurora DB

Also offered in the cloud as a service, but by AWS, here initially we do not see a direct competitor of Oracle DB since it is a version of MySQL optimized by AWS, but AWS promises that it can instead replace it delivering the same reliability and for one tenth of the cost. I honestly do not believe in this power but I see Aurora DB as the most promising on the list. Aurora DB provides tools for schema migration and conversion (AWS Database Migration Service and AWS Schema Conversion Tool) and promises to migrate the DB with minimal downtime. The calculation of the cost is based on the storage used for database and its backups, the IOs consumed, data transfer in/out and the type of instance that is chosen. Having as the most powerful type a reasonable 32 vCPUs and 244 GB RAM. The payment is monthly and varies according to the use of the above mentioned items.

Mais info:

Final considerations

All this pressure that has been put on Oracle customers over new licenses can yield short-term results with hit targets and good quarterly results but in the medium and long term Oracle should be concerned about the possibility that new Applications can be built on Oracle Database in the latter case and for consultants and architects and DBAs to convince customers to use Oracle database because the features are wonderful is increasingly more arduous task. Oracle’s beautiful sales pitch is not able to convince that Oracle’s cloud migration is the best strategy yet. Migrate to Oracle Cloud only seems to me necessary when it is mandatory to be in a public cloud using an Oracle DB. I am still an Oracle Database enthusiast. I am OCP certified and I know the size of the potential but I get the impression that Larry Elison’s company may be heading the dangerous strategy of number immediacy and can reap bitter fruit in the future of databases , Whether in the cloud or not.{:}

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