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August 17, 2016

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Bart Sjerps

Hi Chad,

Awesome post and I couldn't agree more! As an Oracle specialist at EMC, I can testify that many customers indeed resent Oracle (except sometimes the people who made a career based upon Oracle technology).

To my big surprise - many customers are not willing to avoid the Stockholm Syndrome. They often even admit the situation but are unwilling to do anything about it. Mostly because they think the risk of losing the battle and having to pay even more in the end is too high.

Reality check: customers can not easily move away completely from Oracle. So my recommendation to them is to minimize the exposure at least. So if you need the database, then buy database licenses (but only the stuff you need and not packed with a bunch of VERY expensive options) but don't buy into the whole Red Stack as it may be near impossible to ever get rid of it.

The reason why (IMHO) Oracle is so strongly opposed to VMware is because it threatens their revenue stream. Let me explain why.

The average physical deployed database server (including the vast majority of Oracle engineered systems) are running at very poor utilization. I wrote a post on why that happens: https://bartsjerps.wordpress.com/2013/12/05/getting-most-of-server-resources/

Combined with the fact that licensing usually makes up roughly between 75 and 80% of the TCO (see http://wikibon.org/wiki/v/Virtualization_of_Oracle_Evolves_to_Best_Practice_for_Production_Systems) customers are basically burning lots and lots of license money without getting any business value in return.

Test question: given an average 2-socket 18-core per socket x86 machine, what's the license cost for, say, Oracle Enterprise Edition + partitioning + active data guard + diag/tuning pack (pretty basic license set)? You will be totally shocked if you hear the price (even after discount).

Now, if you can use live migration and workload management features (CPU shares) on VMware to move workloads around and guarantee minimum performance SLAs - then suddenly you can increase the database-per-server density by maybe a factor 4 or so. Given that Oracle is licensed per physical host, and as said, makes up >75% of the TCO, you can see that there's a HUGE savings potential.

These savings are directly taken from Oracle's revenue stream. If you want to know why people or organizations behave in a certain way, just follow the money.

Looking back at ourselves at VCE/EMC, I still wonder why we are nearly always trying to secure the technical deal (and we hardly ever lose that one) but mostly ignore this licensing component (which allows Oracle to sell whatever they like, despite being the lesser of available solutions).

If we are effective in explaining this to customers and what role EMC/VCE can play, I believe there's a massive opportunity. And customers couldn't be more happier if we help them move away from their Stockholm Syndrome.

Regards,
Bart

Dominic

Great post and white paper Chad, I have lots of discussions with customers on this very topic concerning HPE hardware not EMC. It does depend on your Oracle sales guy a lot as some are good and help the customers but a large portion don't.

Dvellante

This is a hard problem for customers. Bart is right on - Oracle customers know that conversion is far too risky so they continue to pay up for Oracle - heavily skewing TCO toward licenses. In fairness, while I don't hear many customers say "I love Oracle" the discussions we have with Oracle customers (and we have many) quickly move beyond infrastructure into business value. And they rationalize the license gouging because of the business impact.

That said they (all) want help with license costs.

My advice is learn how to negotiate with Oracle. Nathan and his team at House of Brick are savvy and definitely worth meeting. Treat Oracle negotiations like a project and give yourself enough runway to understand the structure of Oracle contracts. Bring your best people because Oracle knows its contracts inside and out - and all too often customers don't understand the "trip wires" in Oracle contracts and don't cast a wide enough talent net (internally) to compete with Oracle's knowledge of the agreement. Sometimes, what seem to be little factors - like the SoW often trumps the MSA - are overlooked by many customers and come back to bite you. And many smaller and mid-sized customers will wait until the end of the quarter to try and negotiate (thinking it's the best time to get a deal) and then can't get an Oracle rep's attention b/c they're all hunting bigger fish (above $2-3M deals)...sometimes leading to frustration and poor decision making.

Finally, with so-called Trusted Partitions, Oracle is using it’s licensing might to enter the converged infrastructure market by making database pricing extremely attractive for its own systems, while locking out competitive offerings through onerous licensing terms for those platforms. This both lowers the customer's costs (because it attacks the licensing problem) and it forces customers into OVM.

Chad - I'm not sure this is "nuts" (especially to Larry) but it sure seems unfair.

I wrote this doc three years ago (pre hyperconverged and pre oracle's new licensing practices) but some of the negotiation tips still apply:
http://wikibon.org/wiki/v/Oracle_Negotiation_Tips:_Focus_on_Reducing_License_and_Maintenance_Costs

Nathan Biggs

Thanks for the shout out Chad. I am glad to have more voices in the conversation. Just one thing to remember for all you Oracle users...if you were doing something outside of your agreement with Oracle, you can be assured that they will bring everything to bear to hold you to that agreement. That is all you are doing to them. Just stick to the agreement, and don't let them try to redefine things that are not in your best interest.

See you at VMworld!

Norman

People should avoid Oracle as much possible, and eliminate any Oracle stuff in their Datacenter sooner or later, with their CEO threatened to shoot his competitor, you know this Larry Ellison is an IT terrorist.
Oracle employee: listen up and jump ship to join other firms NOW!

Connor

Blog with integrity ? LMAO. Very funny.

This pro EMC and pro VMware blog is so biased, I've never seen anything like it.

EMC is bound to disappear and to be absorbed by Dell.
As for VMware, it will be sold and spun off for a great profit for Dell.
You should also ask yourselves questions about the mid-term viability of Dell and the sustainability of this crazy acquisition that won't work. There is no clear strategy and no sustainable cloud offering.

In the mean time, you EMC/VMware/Dell employees writing and commenting on this blog can spread all the FUD and biased crap as you wish with this so called "Blog with Integrity" approach. LOL.

Mark

Bryan Cantrill of Joyent formerly of Sun, wrote something back in 2004 on Oracle licensing and the "FYO Point":

http://dtrace.org/blogs/bmc/2004/08/28/the-economics-of-software/

CJ

Wow Connor - Troll much? LOL.

Oracle's licensing "scheme" is terrible and locked in a circa 1990's era model. Its only a matter of time until educated consumers figure this out and move on to a better product that provide more flexibility and strategies for dealing with virtual and cloud based realities.

thorsten

thanks for that post. let my add my rant.

i`m a sysadmin from germany and at my former employee that oracle licensing thing sucked so much, for me nearly 50% of the reason to quit that job was just because of all the licensing fud , the oracle hassle and bloat and the religous belief that "the best is just good enough for us".

that`s what also made oracle big and that`s how things work in public service: decision makers throwing out the money because it`s easy to do if it`s not their own one`s, and make sure nobody could ever complain,that they have done a bad job by chosing an inferior product for the project.so they always chose that one with the best reputation. i even heard some of those decision makers whine that oracle is so expensive and such an awful company so you have a point there with the "stockholm syndrome" theory...

i`m doing 25yrs in IT now and from my sysadmin perspective there is no company which sucks that big like oracle. i don`t like microsoft either - but compared to oracle arrogance, i love them...

besides all their arrogance and customer impoliteness (often closely tied to the arrogance of decision makers who buy this bloat), mind that this company also sucked up and destroyed one of the coolest IT company in history: sun microsystems

thank god there is ZFSonLinux, though.

every time i use it, i raise my hat off to the brilliant people at sun and i shed some crocodile tears. that was a company driven by engineers. not by marketing & sales. R.I.P

Glen

A company I was formerly with was dragged through the Oracle licensing gauntlet last year, with an audit and subsequent massive retroactive bill, that in the end, appeared to be nothing more than (attempted )coercive extortion on Oracles part.

Here's a condensed version of what happened:

Several years ago sysadmin and I discussed moving some production Oracle databases to Vmware, since a couple of test prod databases had been running flawlessly for some time. I contacted our Oracle rep via phone and informed them and wanted clarification on processor counts since we were on NUP licenses that limited us to 18 processors. Oracle rep told me that the processor count on the vmware host had to include all the processors on that host, whether used or not.

Told sysadmin then to make sure the host we'd be running on only had X processor count (using core x .5 formula as per Oracle) to keep us in compliance. This was done and for years ran all Oracle databases in the vmware environment except one still on physical server. Combined processor count was just at the number we were allowed with our NUP licenses.

Oracle decides to audit after questions were posed to them about processor counts when migrating to newer vmware version. They come back with huge retroactive bill saying that we should have counted all of the processors on all of the hosts vmware was using, because we "could" have used them, even though no oracle binaries were ever installed on anything other than host Oracle databases resided on.

I dug in and asked Oracle reps during a conference call to point out exactly where and what part of our OLSA we were breaking, particularly where it said we could not partition the way we were. They obfuscated and mentioned their doc's on the web etc. and I pointed out the articles they referenced all said at the bottom were they not contractual. They continued to obfuscate and we were getting nowhere so turned it over to legal dept and told Oracle we (IT) were out of the conversation and to take it up with legal team.

I have since moved on, but last I heard Oracle had countered with several deeply discounted counter "offers", all of which were turned down on lawyers advice, and licensing status is back at the same status quo it was before the audit. In other words, Oracle backed off completely.

I will also mention we brought on board a 3rd party that specialized in these issues for advice, I will not name them here should it be construed that I am shilling for them, which I am not.

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