Listening to Straight Talk on Oracle on VMware Licensing

Software licensing can be a tricky issue, especially with all of the different software policies and the high number of moving parts involved in a licensing agreement. To help customers correctly license their Oracle environments while optimizing their architecture, a recent DBTA webcast provided a frank and direct conversation about how to properly adhere to a customer’s existing contract in order to correctly license virtualized infrastructure for Oracle. 

The webcast was sponsored by VMware, in partnership with the Independent Oracle Users Group (IOUG), and featured moderator Don Sullivan, Oracle Certified Master VMware vExpert, and VMW CTO Ambassador; and presenters Dave Welch, CTO & chief evangelist, House of Brick Technologies; Daniel Hesselink, managing partner, License Consulting; and Dan Young, chief data architect, Indiana University.

A replay of the webcast, “Straight Talk on Oracle on VMware Licensing,” is available here.

Dave Welch compiled a list of assertions from Oracle representatives regarding licensing Oracle on VMware that are non-contractual. These assertions, he said, are that

  1. Soft Partitioning, a host level concept, is disallowed.
  2. Sub-Cluster licensing is disallowed.
  3. Soft Partitioning may also be a cluster level concept.
  4. The so-called 10-Day Rule becomes moot.
  5. As of vSphere 5.1, all vSphere hosts attached to the same SAN or NAS must be licensed.
  6. As of vSphere 6, all vSphere hosts in the enterprise must be licensed.

However, said Welch, “Oracle has no contractual merit or teeth for any of these claims. Accordingly I’m about to demonstrate that the Oracle contract is agnostic to VMware in every way.” An important quote from the Oracle license concerning the processor-based licensing metric is that “Processor shall be defined as all processors where the Oracle programs are installed and/or running.” Although that quote was from the publicly available Oracle License and Service Agreement V121510, Welch noted a materially identical sentence will be found in Oracle contracts whether they date from the 90’s or 2015.

Through Welch’s research, he concludes only two sections of the Oracle contract integrate external licensing policy documents. Those policy documents are the Technical Support Policies, and beginning with contracts sometime in 2008, the Processor Core Factor Table.

After going over these two contract sections as well as the entire agreement clause, Welch presented this conclusion about which policy documents are contractual and which are not. According to Welch:

  • Software Investment Guide - Not Contractual
  • Licensing Data Recovery Environments - Not Contractual
  • Technical Support Policy - Contractual
  • Processor Core Factor Table – Contractual beginning sometime in 2008
  • Partitioning Policy - Not Contractual
  • Cloud Licensing Policy - Not Contractual
  • Hosting Policy - Not Contractual

According to Welch, the reason the non-contractual documents are so is not because of those documents’ footer that bars their inclusion in a contract, but rather that the documents are not referenced in the contract and are therefore locked out by the contract’s Entire Agreement clause.

Daniel Hesselink, founder of License Consulting, articulated how there could possibly be conflicting interests when using Oracle’s License Management Services. According to Hesselink, “Oracle’s arguments are self-invented and have no contractual basis. They are unfit for concluding contractual compliance.”  He also questioned how the Oracle’s Licensing Management Services could possibly be impartial when they are being paid by Oracle. Users who must feel safe enough to “bet their paycheck” when they are licensing software and make sure they have everything correct in their set-ups to avoid any legal issues.

Hesselink stated there is no reason users should discuss any licensing issues with Oracle’s LMS but instead should discuss issues with Oracle Legal. Users should request Oracle Legal to either confirm or denounce their described situation while only referring to contractual documents that have been signed by both parties.  They should then add a clear deadline of when they would like a formal reply and emphasize that if they do not hear from Oracle they will assume the dispute is unfounded and they are within the terms of your contract.

Dan Young, chief data architect of Indiana University, reinforced how important it is for organizations to go over their Oracle contracts and to understand what it allows them to do and not do.  “We have never had any contractual issues, but also we’ve never had any support items either,” stated Young. Indiana University currently runs Oracle on a private cloud. It looks to expand the private cloud, and plans on offering some solutions to other organizations as well. “Where we put it and how it is running is just a critical piece of these contracts,” stated Young.

For a replay of this webinar, go here.