Oracle Licensing on AWS
- vCPU-Based: Licenses based on the number of vCPUs.
- Multi-Threading: Two vCPUs count as one license if enabled.
- Instance Limits: SE2 is limited to 8 vCPUs per instance.
- Compliance: Follow Oracle’s cloud policies and review agreements.
- Options: Use EC2 with BYOL or RDS with License Included
Oracle Licensing on AWS
Executive Summary: Oracle licensing on Amazon Web Services (AWS) is complex and fraught with pitfalls, often resulting in unexpected costs.
This guide provides a clear overview of how Oracle licenses work on AWS, outlining the different licensing models (bring-your-own-license vs. AWS-provided) along with their associated cost implications.
It offers best practices and recommendations to help organizations stay compliant and optimize Oracle costs in the cloud.
Oracle License Metrics and vCPU Counting in AWS
Oracle licensing in AWS is tied directly to the number of virtual CPUs in use:
- Processor License Rule: In AWS, Oracle counts two vCPUs as one Oracle Processor license (with hyper-threading on by default). If hyper-threading is disabled, then one vCPU equals one license.
- No Core Factor Discounts: Oracle’s on-premises Core Factor discounts do not apply in the cloud. Every vCPU (or pair of vCPUs) must be fully licensed; therefore, moving to AWS can roughly double the licenses required compared to on-premises for the same workload.
- Standard Edition (SE2) Limits: Oracle Standard Edition 2 (SE2) is licensed per “socket” in AWS. Up to 4 vCPUs = one socket (one SE2 license). If an instance has more than four vCPUs, additional SE2 licenses are required (each covering up to 4 vCPUs). Oracle also limits SE2 usage to instances with eight vCPUs or fewer on AWS; instances with more than eight vCPUs must use Enterprise Edition.
AWS Deployment Options: BYOL vs. License-Included
When running Oracle on AWS, you have two primary licensing models:
- Bring Your Own License (BYOL): Use licenses you’ve already purchased from Oracle. This applies to self-managed Oracle on Amazon EC2 or to Amazon RDS instances in BYOL mode. This approach keeps AWS costs lower if you already own licenses, but you’re responsible for ensuring you have enough licenses for all vCPUs in use.
- License Included (AWS-provided): Purchase Oracle usage on demand through AWS. This model is available for Amazon RDS (managed database service) for Oracle Standard Edition. The Oracle license cost is built into the hourly rate (no separate purchase needed), offering convenience at a higher hourly price.
Cost Considerations and Examples
Oracle licensing costs can significantly outweigh AWS infrastructure costs, making it essential to compare options.
The example below illustrates a multi-year cost comparison for running an Oracle database on AWS under different models:
| Deployment Option | Compute Cost (monthly) | Oracle License Cost (monthly) | Approx. Total Cost (monthly) |
|---|---|---|---|
| Self-Managed on EC2 (BYOL) | ~$193 (EC2 instance) | ~$525 (SE2 license amortized) | ~$718 |
| Managed on RDS (BYOL) | ~$293 (RDS instance) | ~$525 (SE2 license amortized) | ~$818 |
| Managed on RDS (License Incl.) | ~$671 (instance + license) | $0 (included in price) | ~$671 |
In this example, the license-included option has the lowest monthly cost because it eliminates the need for an upfront purchase. However, for long-running workloads, especially those with multi-year plans or Oracle discounts, BYOL can become more cost-effective over time.
Keep in mind that Oracle Enterprise Edition licenses are significantly more expensive (approximately $47,500 per processor license list price), so scaling up with Enterprise Edition on AWS can result in license costs that far exceed the cloud infrastructure costs.
Recommendations
- Calculate and track licenses accurately: Always use Oracle’s official formula (2 vCPUs = one license) for each deployment, and document the license assignment for every AWS instance. Audit your AWS deployment periodically to ensure your Oracle license count matches usage.
- Match the license model to the workload: Use BYOL for long-running production workloads (and all Enterprise Edition deployments) to leverage existing licenses and reduce cloud costs. Use AWS’s license-included model on RDS for short-term, dev/test, or intermittent workloads to avoid buying full licenses for servers that aren’t always on.
- Stay within Standard Edition limits: Keep Oracle Standard Edition 2 deployments on instances with 8 vCPUs or fewer (by Oracle’s policy). If a database workload grows beyond that, plan to switch it to Enterprise Edition or distribute the load across multiple smaller instances.
- License DR and test environments: Don’t overlook standby and non-production databases in your licensing plan. If a standby or test instance on AWS is ever activated, it must have a license.
- Train and consult: Train your IT staff on Oracle’s AWS licensing rules to prevent mistakes, and consult an expert for help if you face complex scenarios or audits.
Checklist
- Inventory all Oracle on AWS: List every AWS instance (EC2 and RDS) running Oracle, including its vCPU count and which Oracle edition it runs.
- Verify license coverage: Confirm you have sufficient Oracle licenses for each deployment (including any standby/DR and test instances). Remediate any shortfalls proactively.
- Enforce instance limits: Avoid any deployment that violates Oracle’s policies (for example, do not run SE2 on instances with more than eight vCPUs). Use internal approval checks or AWS controls to enforce this.
- Power off unused instances: Stop Oracle databases on AWS when they aren’t needed (especially dev/test) to avoid paying for license-included hours you don’t use.
- Review contracts and policies: Read your Oracle licensing agreements and Oracle’s cloud policy. Update internal guidelines accordingly, and ensure all stakeholders are aware of these requirements for running Oracle on AWS.
FAQ
Q1: How do I count Oracle licenses on AWS?
A: Oracle’s rule is 2 AWS vCPUs = 1 Oracle processor license (e.g., a four vCPU instance requires two licenses).
Q2: Can I reduce license requirements by disabling cores or hyper-threading?
A: No—Oracle requires licensing the instance’s full vCPU count regardless of settings, so disabling hyper-threading doesn’t reduce the requirement. To reduce licensing requirements, use a smaller instance type (fewer vCPUs).
Q3: Do I need to license a passive disaster recovery database on AWS?
A: Generally, yes. If a standby/DR database is ever powered on (even for testing), it must be fully licensed. Only a completely idle, powered-off DR instance might not require a license.
Q4: What if Oracle Enterprise Edition on AWS is too expensive?
A: Try to reduce your Oracle footprint: use Standard Edition 2 for smaller workloads, or split workloads across multiple smaller instances to avoid one huge licensed server; also, evaluate Oracle Cloud (OCI), which offers more capacity per license and potential cost benefits.
Q5: Can I use an Oracle ULA (Unlimited License Agreement) on AWS?
A: Yes—but Oracle’s policy prevents counting any AWS usage at ULA termination, meaning Oracle workloads on AWS during the ULA won’t convert into perpetual licenses; you will need to license those AWS workloads separately after the term.
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