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Anxious users await Oracle's hardware licensing policies

As Oracle's takeover of Sun's hardware business approaches, some users fret over how much more money it will cost them in hardware licensing fees.

With Oracle's formal takeover of Sun creeping closer, trepidation among some users is growing about how Oracle will handle licensing issues involving Sun's server hardware and its software running on those systems.

Under the best of circumstances, corporate IT shops have found Oracle's software licensing agreements overly complex and its enforcement of those agreements a little too aggressive. But as Oracle enters the hardware business for the first time and begins to deal with issues such as the growing acceptance of virtualization software – both its own and that of competitors – users of Oracle and Sun products wonder how much more it will cost them.

"From my observations, every time Oracle gets its hands on something, it turns a marginal property into a much bigger money maker, and licensing has a lot to do with it," said Dean McAuliffe, a database administrator with a large Charlotte, N.C.-based bank. "The record shows, when you are dealing with Oracle licenses, you end up paying more."

Some view Oracle's approach to licensing involving multi-core systems, of which Sun has a rich array, as not just confusing but out of date when compared with archrivals IBM and Hewlett-Packard. Oracle still favors licensing on a per-core and/or per-processor basis rather than licensing by the server. While the company has added some flexibility to its multi-core licensing policies, some observers feel it needs to go further as it enters the hardware arena.

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"I feel pretty strongly that Oracle will come out with a 'Sun-specific' alternative to cores licensing such as 'all inclusive licensing' per Sun server or term licensing for certain Sun servers regardless of CPU or virtualization," said Eliot Arlo Colon, president of Miro Consulting, a company that helps users analyze and negotiate Oracle enterprise software contracts.

Colon believes Oracle users would see "huge" upside to this approach because each server they buy would be compliant from the date of purchase, eliminating the need for auditing or tracking of deployment. Another advantage for users, he believes, is that they need not worry about any changes of license definition from Oracle.

Oracle officials declined to comment on what modifications it might make to licensing involving Sun's multi-processor systems, because the deal is not completed. The company expects the deal to be completed sometime this summer.

One analyst believes that one guiding principle Oracle will use to further modify its approach to multi-processor systems revolves around hard partitioning.

"The fundamental principle I see Oracle holding to is hard partitions," said Ray Wang, vice president and principal analyst with Forrester Research Inc. in Cambridge, Mass. "If there's a way to clearly define which processors on a box will be utilized, then Oracle will be inclined to license this way."

What adds to this complexity, Wang notes, is the potential for chip companies to also turn on cores as needed. This could happen as a way to be greener as well as "light up" only those processors that are needed, Wang said.

Hard partitioning refers to physically taking a large server and dividing it up into smaller systems. Each system can then act as its own self-contained unit complete with its own processor, operating system, memory and network resources.

Oracle officials in the recent past said they are quite aware of the industry trend of paying for server time based on the number of processors turned on, commonly referred to as the capacity-on-demand approach. They believe they are in step with changes occurring in the hardware industry, making sure users license only the number of processors turned on to run Oracle.

But some think virtualization technologies, along with what is not typically spelled out in a licensing contract about what is designated as a logical processor, could make life difficult, if not expensive, for some Sun IT shops.

"[Sun's] Niagra T2 chip has 64 logical processors, and it is multi-threaded as well as multi-core. So it makes a difference whether you are talking logical cores or processors and if they are hyper-threaded," said Adam Kerrison, CTO of Tideway Systems, a London-based company that makes software to help IT shops track instances of software on servers. "This could have a significant impact on how big your bill will be."

Kerrison said the cores/logical processors issue gets further muddied in a virtualized environment. For instance, if a Sun system has 16 CPUs and 32 cores, users can partition it out under multiple virtual machines where a number of hypervisors are set up, he explained. Consequently, each virtual machine can appear to have more virtual processors than physical processors in the same machine.

"So users can wonder, 'Am I paying for the number of virtual processors – because those are the core the machine sees and what my database runs on -- or do you actually get all the way down to the actual physical device it runs on?' This is certainly not clear from most maintenance or licensing agreements. It is a can of worms," Kerrison said.

What makes it difficult for some to accept Oracle's licensing on server hardware in virtualized environments is its policy of tying a database to a single processor, which takes away a lot of the advantages of moving a virtual server from one physical machine to another. Users either do this or buy a license for every processor on every physical server that could possibly run that database.

Yet another complicating factor involving virtualized environments on the software side is that Oracle has yet to certify its products to run on any hypervisor other than its own. In IT shops where there are likely to be hypervisors from VMware, Microsoft or the open source Xen hypervisor, users may decide to go with a hardware-software server combination offered by IBM or HP.

"If Oracle is going to be hard-core on some of these issues like tying cores and processors to single machines or working with other hypervisors, they are going to lose some [Sun] hardware sales," McAuliffe said.

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