Oracle licensing in the cloud can often feel like navigating a maze. The costs of licensing Oracle workloads on AWS or other cloud platforms can be substantially higher than on-premises environments, primarily due to differences in how computing resources are measured. This blog will explore how AWS Dedicated Hosts can help organizations significantly reduce their Oracle licensing costs and regain control of their IT budgets.

The Licensing Challenge in the Cloud

When running Oracle software on cloud infrastructure, one significant hurdle is identifying the underlying physical hosts where workloads are installed. Unlike on-premises environments, where you can pinpoint the exact physical cores and calculate licensing needs accordingly, cloud environments often require licensing based on virtual CPUs (vCPUs). This shift is governed by Oracle’s Cloud Computing Policy - a guideline that is not part of the Oracle Master Agreement.

Under this policy, vCPUs must be converted to Oracle processor licenses, typically by dividing the total number of vCPUs by two (assuming hyper-threading is enabled). While this approach provides a measure of standardization, it often results in inflated licensing requirements and costs. For example, an x2iezn.2xlarge instance with 8 vCPUs would require 4 Oracle processor licenses under this model. Multiply this across multiple instances, and the costs quickly escalate.

The On-Premises Licensing Model

In an on-premises environment, Oracle licensing is based on physical cores, not vCPUs. For x86-based processors, which are commonly used in data centers, Oracle applies a 0.5 Core Processor Licensing Factor. This allows organizations to calculate their licensing requirements more efficiently. For example, a physical server with 24 cores would require only 12 Oracle processor licenses (24 × 0.5).

This distinction highlights the disparity between traditional and cloud licensing models. When you can count physical cores, you’re leveraging a model that’s cost-effective and rooted in Oracle’s own contractual definitions. However, the cloud’s reliance on vCPU-based calculations often leads to unnecessary expenditure.

How AWS Dedicated Hosts Create Efficiency

AWS Dedicated Hosts provide a unique solution to this licensing challenge. By leasing a physical host dedicated exclusively to your workloads, you regain the ability to count physical cores instead of vCPUs. This aligns your cloud licensing strategy with the efficiency of an on-premises model.

Consider the following example:

• You deploy 6 x2iezn.2xlarge instances, each with 8 vCPUs, on a shared tenancy. Using Oracle’s cloud policy, you’d need 24 Oracle processor licenses ((6 × 8) ÷ 2).

• Now, imagine you lease an AWS Dedicated Host for the same workload. The x2iezn Dedicated Host has 24 physical cores. With the 0.5 Core Processor Licensing Factor, you’d require only 12 Oracle processor licenses (24 × 0.5).

The difference is substantial. By using Dedicated Hosts, you cut your licensing requirements in half, resulting in significant cost savings. At a list price of $47,500 per Oracle Database Enterprise Edition processor license, this translates to a savings of $570,000 for this scenario.

Cost Analysis: Dedicated Hosts vs. Shared Tenancy

While Dedicated Hosts may have a higher upfront cost compared to shared tenancy instances, the licensing savings often outweigh the additional expense. For example, in the US East (N. Virginia) region:

• A Dedicated Host for x2iezn instances costs $3,095.93/month (3-year Compute Savings Plan).

• Six x2iezn.2xlarge instances cost $2,814.60/month (3-year Compute Savings Plan).

The difference is $281.33/month, a modest increase when compared to the potential savings in Oracle licensing.

Beyond Licensing: Architectural Considerations

It’s essential to note that licensing efficiency is just one factor in choosing AWS Dedicated Hosts. Architectural considerations, such as redundancy, high availability, and workload distribution, remain critical. However, the potential savings on Oracle licensing should be a key element in your decision-making process.

Partnering with Cintra for Oracle Optimization

Navigating Oracle licensing complexities can be daunting, but it doesn’t have to be. At Cintra, we specialize in helping organizations optimize their Oracle environments, whether on-premises or in the cloud. By leveraging our deep expertise, you can unlock significant cost savings and build a robust, scalable IT architecture.

If you’re currently running Oracle workloads in the cloud or planning a migration, let’s talk. Our team can guide you through the process, ensuring you achieve maximum licensing efficiency and long-term value.

Reach out to us today to learn more about how AWS Dedicated Hosts can transform your Oracle licensing strategy.