ORACLE SOFTWARE ASSET MANAGEMENT - readiness, compliance & best practice.

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1 ORACLE SOFTWARE ASSET MANAGEMENT - readiness, compliance & best practice. Executive Summary Oracle s policy of charging for all licenses in use, including those that may have been unknowingly deployed, can make for some eye wateringly large liabilities. As these come out of the blue there is rarely budget set aside, making the impact that much higher. How you manage your licenses can make a real difference, not just from a cost perspective but also to peace of mind. Managing Oracle licenses can be a complex task as the rules tend to be obscure or constantly changing. Maintaining compliance can be a challenge that most businesses are not prepared for and with Oracle s aggressive stance on audit, can prove to be an expensive mistake. This document introduces the basic principles of managing and optimising the licensing of Oracle databases across the enterprise. It will help you understand the critical elements of a successful Oracle Software Asset Management (SAM) strategy and provide tips on how to minimise the risk and cost impact of Oracle non-compliance when audited. 1

2 Contents Executive Summary... 1 Introduction... 3 Oracle Audit who s at risk?... 3 Be prepared... 3 Protect your organisation... 4 Establishing a Software Asset Management (SAM) Strategy... 5 Where to start... 5 Understand what you have... 5 What you need to know:... 6 Discovery... 6 Important points to consider whilst optimising your environment... 7 Hardware configuration, Management Packs and Options... 7 Tracking Oracle Orders... 7 Oracle Licence Inventory... 8 Oracle Server Worksheet (OSW)... 8 Top Tips for Managing Oracle Database Licensing... 9 Check the hardware running Oracle... 9 Virtual environments... 9 Licence the correct number of Named Users... 9 Optimise by grouping instances with similar Options/ Management Pack usage Disaster Recovery Is Enterprise Edition necessary? Keep on top of Unlimited Licence Agreements (ULAs) Is it possible to avoid an Oracle Audit? Why use Nymad and Snow to optimise Oracle Licensing? About Nymad About Snow Software

3 Introduction If you have financial responsibility for your Oracle databases you already know all-too-well just how large your Oracle licensing expenditure is. Not only is Oracle an expensive investment; it s also difficult to manage effectively as all too often there is a lack of visibility as to which databases have been installed on what hardware, how it is configured and what (at extra cost) Management Packs and Options have been enabled. Oracle s software licensing rules are complicated, but getting hold of the software could not be easier. Almost all of its software can be downloaded from the Oracle website without requiring specific credentials. Additionally, none of the software requires a licence key and using premium functionality (which requires a separate license) couldn t be simpler. As a consequence practically anyone in an organisation can download and start using an Oracle product, leaving the organisation vulnerable to huge unbudgeted costs when audited. Oracle Audit who s at risk? Oracle has always been keen to exercise its right to audit customer use of its software and currently this couldn t be truer. As Oracle focus on their rapidly expanding cloud offerings, analysts have been worried about Oracle s traditional business of selling on premise licenses to customers for running Oracle in their own datacentres. That fear proved valid when Oracle recorded a five percent drop in revenue during its fourth quarter report last fiscal year. Cloud grew by 29 percent in that report, but that still only accounted for five percent overall revenue growth. Growth in the cloud does not appear to compensate the decline of their traditional licence sales in the short term. On the other hand, audit generated revenue has been up for two years in a row and we expect to see that trend continue. Audits are a fact of life and are unlikely to go away anytime soon especially when adding directly to the bottom line. Those most at risk of a letter from LMS are Oracle customers that have not received a software audit for some time or those that have undergone a business change such as a new business launch, restructuring, divestment or acquisition. Be prepared Organisations need to know exactly what software is installed across the enterprise, how it s being used and what Management Packs and Options have been activated. A simple case of unintentionally having an Option activated on an Oracle database can cost your organisation in the region of 16,000. That s the potential cost for ONE Option (such as partitioning) activated on ONE single-processor database (it gets even more complicated when you activate Options that have inter-dependencies 3

4 with other extra-cost features, such as Fine Tuning, which also requires Diagnostics!) Similarly, having ONE instance of Enterprise edition database installed when a Standard version would have sufficed could cost in excess of 30,000 per processor. If your organisation uses 100 or more Oracle databases, you can start to get a feel for the potential costs. Not long ago a client came to us for help after Oracle scripts had identified unlicensed Enterprise Edition products and a bill for 240k. The client was unable to identify exactly why this had happened but it soon became apparent that there had been a mistake in the install, they had always thought it was Standard Edition. Thankfully following negotiation with Oracle on the client s behalf we were able to agree a liability of just 25k, signed and sealed with a purchase of additional software. A common and easy mistake to make because of the nature of Oracle installs, it is quite common for multiple stakeholders to be involved in the deployment, configuration and ongoing maintenance of Oracle databases. Due to the fact that Oracle haven t made it easy to provide a common view of the database instances and configuration, it is quite possible for changes to be made without anyone else (most importantly, the stakeholder charged with managing the cost of the database) being aware. Protect your organisation When it comes to an audit, the customer can be at a distinct disadvantage to Oracle s auditors from the Licence Management Services (LMS) team. They have specialist tools (and a large specialist back office team analysing the output) to assess the state of Oracle installations across the network. Oracle s LMS team will also consider how you are licensed. For example, if you have Named User Plus licensing but the application the database is serving is open to the internet, then you will need to have processor based licensing, potentially doubling the cost. When you are using versions other than Enterprise Edition you have to be very careful of the servers you install on. If they have the capability of more processors than an individual database installation allows, it means you have to licence the higher version, even if the processor slots are empty. Changes to Oracle products can also upset the apple cart, for instance the advent of Oracle Standard Edition 2 and the new licensing that comes with it. Standard Edition 2 pricing is as per Standard Edition but may only be licensed to run on servers with a maximum of two sockets. In addition, SE2 introduces a usage cap engineered into the program that limits the number of CPU threads used to run an SE2 Database to 16 threads (or 8 per instance in the case of RAC). For example, previously you could buy a 2 processor server with 18 cores per processor which gives a total available thread count of 72. This would cost approximately 3,000 in licensing and 600 in support. Today the same configuration would cost 10,000 in licensing and 3,000 in annual support and only access to 22% of the available processing power! Combine the following factors expensive software, complex licensing, lack of visibility and control, high risk of being audited and it becomes clear to see why it is so important that organisations gain full visibility of their Oracle installs. 4

5 Establishing a Software Asset Management (SAM) Strategy Effectively managing the Oracle database licensing across your organisation simply comes down to being fully aware of all Oracle usage and interdependencies. Collecting this information will give you the visibility you need to first eliminate any potential compliance issues and then move towards an optimised licence position. Establishing a SAM Strategy will bring many benefits to organisations, both in the short term and for the future. Best practice enables companies to achieve full control and visibility of both the hardware and software within the business, understanding buying and usage patterns, inventory details, future requirements and contractual obligations. This can deliver considerable savings in licence purchase costs or support fees, as well as reduce liabilities as a result of an audit and the risk of reputational damage. Where to start It might sound obvious but many organisations do not have a singlesource view of all their Oracle database installs. If companies track software and licences at all, they often do it with a mix of spreadsheets, filing cabinets and purchasing systems. If this describes your organisation, you are by no means unique. This method often leads to a reactive approach when vendors give notice that they plan to audit. The first step towards taking control of Oracle licensing is engage with a specialist Oracle partner to conduct an internal audit to identify all Oracle usage, not forgetting datacentres, virtualised environments and areas of cloud computing (private, hybrid, public). Understand what you have Run a baseline audit of your organisation s current Oracle position, by either using internal resource if you have the skills, or by using a specialist partner, such as Nymad who use the same techniques as Oracle LMS would. 5

6 What you need to know: Discover and Identify current types, locations and usage of Oracle programs including Test and Development implementations. Consider: What has changed since the original purchase? Has the organisation been subject to Mergers and Acquisitions? Is the environment virtualised? o Understand where and how web facing access such as Internet, Intranet and Extranet will affect your compliance. o Identify the existing Oracle licence and support agreements Consider: Special terms Off contract agreements via o Identify and establish proof of right to use or other licence entitlement. o Measure, analyse and understand your current compliance position. Consider Database recovery environments Data transfer scenarios Database modifications in Oracle applications. o Understand how your current licence metrics are allocated across your estate o Would alternative licence metrics provide better options? Discovery The first step towards taking control of Oracle licensing is to use an inventory solution (sometimes known as a Discovery tool) which is capable of running a baseline audit of Oracle installs across all relevant platforms. Nymad s Baseline / Audit Support service uses SNOW software to provide companies with the peace of mind of knowing their true licensing position and our optimisation services, may even reduce overall liability. Nymad use recognised processes and tools to provide a baseline of existing Oracle usage for organisations, to ensure compliance whilst removing the risk that an audit may uncover additional liabilities. If an audit request has already been received, Nymad can provide support through the process helping to minimise or remove potential liabilities. 6

7 A Baseline Audit typically follows four distinct phases and delivers a detailed current licensing position spreadsheet which will easy export into an Oracle Server Worksheet (OSW) and summary report. We audit Oracle installs across all relevant platforms, detecting the installation of a database and determining the correct version and edition (there is a huge difference between the licenses for a Standard versus Enterprise install, for example). The diagram below outlines the Nymad Baseline Audit process Important points to consider whilst optimising your environment Hardware configuration, Management Packs and Options Creating an inventory of the databases is essential, but just as important from a licence management point of view is capturing the meta data, such as the configuration of the hardware on which the database is installed, as well as being able to determine which Management Packs and Options have been activated (which can easily be done by mistake without anyone ever knowing). Discovering and actively querying the database for additional information is critical. Tracking Oracle Orders Knowing which installs are covered by which licences is key for any Oracle user. If a database is used only by your development team, a Named User Plus licence would be the most cost effective licence. But if a database is potentially accessed by all your customers via a web portal, then it would be better to assign a Processor licence to this environment. 7

8 Tracking which licences are mapped to which environments is therefore essential and should be revisited if there are any changes in the environment. This can also be used to the customer s advantage. For example, Oracle may accommodate discounted licences in limited use test/development environments or even sometimes allow for lower metrics (e.g. 10NUP per processor instead of the standard 25 for test/dev.), which can provide significant savings. Conversely, Limited Use (L/U) environments need to be monitored closely. If you put an instance of a database on a L/U licensed server that does not conform, you will have to pay for a full use licence. Having the ability to compare what s in use (inventory) against the Oracle orders is essential to managing this process effectively. Oracle Licence Inventory Any organisation that has licensed Oracle should take care to ensure that it has a clear overview of the products it has licensed, on what metrics and in what numbers preferably all in a single view. Instant access to other metrics such as which licences are currently under support and whether there are any non-standard terms in the agreement are also important to track. Ideally this knowledge should not reside with one individual, but should be accessible to a team across the enterprise. Another reason to build a single Oracle licence repository is to understand which products are tied together. If an organisation purchased products together on the same order, then they have to all remain supported or the customer will face stiff penalties. Even if an organisation stopped the support on just one of 100 tied products, the cost of support for the remaining 99 products would jump to 22% of list price, rather than the discounted price. It s easy for larger organisations to cost themselves millions of dollars by failing to manage this properly. To check that the organisation s records are in good order, it is best practice to request an Oracle licence inventory from the vendor from time to time. Oracle Server Worksheet (OSW) Although it can look complex and cumbersome, an Oracle Server Worksheet (OSW) can be both one of the best ways to get a single view of a lot of information. The problem with the OSW is that it can take a long time to create and keep up-to-date without an automated tool to collect all the required data it can easily take more than 60 minutes per server. Having a solution that can automatically populate the majority of required fields in an OSW is therefore a distinct advantage. 8

9 Top Tips for Managing Oracle Database Licensing Check the hardware running Oracle It is important for organisations to reassess their licence requirements after a hardware refresh. Most Oracle licensing metrics are linked to hardware, so any change in hardware can have licensing implications. In addition, core factors may have changed since the time the licence was originally purchased. So even if new hardware has the same processor, a different core factor may need to be applied (Oracle will look at the moment the new server was acquired, and will calculate the new core factor for that server). Virtual environments Ensure that only an Oracle-accepted hard partitioning method is used. This allows a customer to only licence the allocated hardware, for instance an IBM LPAR or Solaris Container/Zone. Where soft partitioning is used (for example: Oracle considers any kind of virtualisation using VMware to be soft partitioning ), you must make sure that all the underlying hardware running the virtual environment has a licence. A common situation we come across is a VMware cluster consisting of multiple physical servers only licensed for a subset of those servers. Note that this not only applies to the Database, but also for any used Options or Management Packs. Limiting the number of physical servers, for instance by splitting off a separate Oracle Cluster, can dramatically reduce the required number of licenses. Licence the correct number of Named Users All authorised persons AND non-human operated devices need to be licensed. Problems arise when a customer has not taken into account multiplexors (which must always be counted at the multiplexing front end), non-human operated devices or users of other databases that have a direct link to an Oracle database. Perhaps an organisation has grown since acquiring the original licenses and now has more authorised individuals than before. As such, it is important to revisit your Named User Plus (NUP) licences periodically. Another common problem is related to hardware, because you always need to licence the higher number of either authorised Individuals or minimum NUPs. The minimum can change because of hardware refreshes and differs by Edition installed. 9

10 Optimise by grouping instances with similar Options/ Management Pack usage on same servers Only those Options and Management Packs that are actually in use need to be licensed. Grouping these together allows you to only licence just one option per server instead of three. When you know what to look for, this is something which can be viewed quite easily on an Oracle Server Worksheet. Disaster Recovery It is important to periodically review whether Disaster Recovery methods have changed since you initially purchased your Oracle licence. Check that remotely-mirrored or standby environments are fully licensed (and according to the same metric as the production environment they are supporting). Is Enterprise Edition necessary? Given the cost implications, it is always important to scrutinise whether an Enterprise version of Oracle is the most cost effective choice. If there is no need for Options or Management Packs or other Enterprise Edition features, then Standard Edition (one or two) are much cheaper versions to use and licence than Enterprise Edition. Keep on top of Unlimited Licence Agreements (ULAs) It is important to keep track of what is included within your ULA, what volumes have been negotiated and when your ULA expires. Although defined as an unlimited license, ULA is most definitely limited to a number of products, often capped. Any installs outside the ULA will be at an extra cost. Is it possible to avoid an Oracle Audit? Although there s no such thing as a guarantee against being audited by any software vendor, it is possible to dramatically reduce the chance of Oracle conducting a full audit. According to an ex Oracle LMS consultant: The first step in the Oracle audit process is usually to ask the customer to provide an Oracle Server Worksheet (OSW). How long it takes the customer to respond to this request is a good indication of how well they are managing their Oracle estate. If the customer takes weeks to respond, it s a good bet that they re out of control and thus it will be profitable for us to undertake a more in-depth review of their software usage and entitlement. If, however, the customer can respond to such a request instantly, we would generally assume that they have good processes and controls in place, which would make continuing the audit much less likely to generate a significant return. 10

11 The advice appears to be clear cut: maintain an up-to-date Oracle Server Worksheet and be prepared to deliver this to Oracle at short notice. As our insider concludes: Oracle doesn t audit customers for punitive reasons or to cause disruption; it wants to protect its intellectual property and ensure it is not missing any revenues owed. If a customer can exhibit good governance of their Oracle estate, there s little point in forcing an audit. Why use Nymad and Snow to optimise Oracle Licensing? The advice is clear; not only is it good governance to establish and maintain full visibility and control over Oracle database licencing, it s also very likely to deliver cost savings as well as avoiding the disruption caused by an audit. Increased rigour from Oracle during licence audits is resulting in a much more in-depth audit process. As a result, Snow have joined forces with Oracle experts Nymad to help organisations prepare for the deep dive to avoid incurring large financial penalties. Nymad s Oracle optimisation service enables you to take control of your software licence estate by providing you with a precise view of your current Oracle estate. Our team of licensing experts will ensure your compliance with Oracle licensing rules and the most cost effective deployment footprint encompassing application performance, resilience, availability, security and cost profile. Software Asset Management (SAM) technologies like Snow Software offer end user organisations access to the same information usually only visible to Oracle LMS auditors. Snow s Licence Manager, combined with the Oracle Management Option (Snow OMO) enables Oracle administrators and licence owners to easily track, manage and optimise the configuration of Oracle databases. With the ability to create on-demand Oracle Server Worksheets, administrators can avoid compliance risks, unnecessary costs and save time. 11

12 Snow OMO gives organisations control of their Oracle estate thanks to the ability to collect data and report on all server hardware and configuration, database products and editions, database Options and associated usage, Management Packs and associated usage, feature usage and named users. About Nymad Nymad is an Oracle Specialised Gold Partner with core competencies in database management, managed services and consultancy across the Oracle and Microsoft stacks. Whatever the size and nature of your business Nymad will work with you to maximise application investment, by reducing your operating costs whilst improving your business performance. Follow us: About Snow Software Snow Software ( is a global leader in the delivery of on premise and cloud-based Software Asset Management solutions, including multi-platform inventory and advanced software licence management technologies. Every day, organisations ranging from small businesses to multinational corporations and governments use Snow solutions to analyse and manage more than 1.7 billion software records. Since 1997, Snow Software has sold over 9 million licenses to thousands of end user organisations and service providers worldwide who rely on Snow s SAM expertise to manage compliance, optimise software availability and drive cost savings. Privately-funded, Snow Software is headquartered in Stockholm, Sweden, with international offices located in the United States, United Kingdom, Germany, China, The Netherlands, Norway, Denmark and Brazil. Follow us: