Oracle has once again updated its Cloud Licensing Policy, refining the rules for deploying Oracle software in Authorized Cloud Environments: AWS, Azure, and now, Google Cloud Platform (GCP).

For organizations running Oracle in the cloud, this policy is key. While it’s a non-contractual document, Oracle has historically enforced it during audits, making it an important reference point for compliance and cost management. But as always with Oracle, the fine print matters. Understanding these updates and their implications can mean the difference between a cost-effective cloud deployment and an unexpected licensing headache.

What’s Changed?

The latest revision (June 12, 2024) introduces one major update: official support for Google Cloud Platform (GCP). While Oracle software was always technically deployable in GCP, the lack of clear licensing guidelines made compliance uncertain. Now, GCP follows the same vCPU-based licensing model as AWS and Azure, giving businesses more flexibility when choosing cloud providers.

Beyond that, the document remains largely the same, reinforcing Oracle’s established licensing structure for cloud deployments.

Why This Policy Matters

For years, Oracle’s licensing model has been built around physical processors. In cloud environments, where infrastructure is abstracted, this approach doesn’t work. To address this, Oracle introduced vCPU-based licensing, outlined in this policy.

While this offers a standardized way to license Oracle software in AWS, Azure, and now GCP, there are critical details and hidden limitations that organizations must navigate carefully.

Key Clauses from Oracle’s Cloud Licensing Policy

1. It’s non-contractual but Oracle enforces it anyway

The policy itself states:

“This document is for educational purposes only and provides guidelines regarding Oracle’s policies. It may not be incorporated into any contract and does not constitute a commitment to any specific terms.”

While Oracle claims this document isn’t legally binding, they frequently reference it in audits and compliance checks. However, your actual Oracle Master Agreement (OMA) and ordering documents take precedence, so organizations should carefully assess their contracts before assuming this policy dictates their licensing rights.

2. The core factor table doesn’t apply, which increases cloud costs

In traditional on-premises environments, Oracle’s Core Factor Table applies, reducing the number of licenses required for certain processor architectures. But for cloud licensing, Oracle removes this benefit, meaning every two hyper-threaded vCPUs count as a full processor license.

This exclusion effectively doubles the licensing cost compared to many on-prem environments, making cost modeling essential before migrating workloads to the cloud.

3. "Maximum vCPUs" rule means no cost savings from disabling cores

The policy states:

“Customers are required to count the maximum vCPUs of an instance type.”

This means you cannot reduce licensing costs by disabling vCPUs on cloud instances. If an instance type has 64 vCPUs, Oracle requires licenses for all 64, even if fewer are actively in use. Businesses must carefully select their cloud instance types to ensure they are not overpaying for unused capacity.

4. Standard Edition (SE) has a unique licensing structure

For Standard Edition (SE, SE1, SE2), Oracle defines licensing per virtual processor "socket", where four vCPUs count as one socket. Oracle Database SE2, for example, is limited to 8 vCPUs in total under this policy.

Additionally, hyper-threading is not mentioned, meaning disabling hyper-threading can maximize performance without increasing license requirements.

5. ULA licensing in the cloud comes with hidden risks

The policy states that licenses acquired under Unlimited License Agreements (ULAs) may be used in cloud environments, but cannot be counted in ULA certification at the end of the term.

In reality, ULA certification rules are defined in the ULA contract itself, not this policy. This means organizations should carefully review their ULA terms rather than assume this policy dictates ULA licensing rights in the cloud.

How to stay ahead of Oracle’s licensing changes

Oracle’s licensing model is constantly evolving, and while this latest update may not introduce major shifts, it reinforces the need for proactive compliance strategies. Here’s what businesses can do:

• Review licensing agreements carefully – Don’t assume Oracle’s policies override your actual contract terms.

• Model cloud costs before migration – With the core factor table excluded, cloud deployments can be more expensive than expected.

• Select cloud instances strategically – Choose right-sized instances to minimize licensing waste.

• Monitor for policy updates – Oracle updates this document every few years, often in ways that favour Oracle rather than its customers.

While Oracle’s latest policy update brings clarity to GCP licensing, it maintains the status quo in other areas. Don’t assume Oracle’s policies work in your favour. Businesses must remain vigilant, optimize their cloud strategies, and ensure compliance on their own terms, not just Oracle’s.

At Cintra, we help organizations cut through the confusion, assess licensing risks, and build cost-effective, compliant Oracle cloud strategies. Want to ensure your Oracle cloud deployments remain cost-efficient and audit-ready? Get in touch today.