As the dust settles on Microsoft's decision to house Oracle hardware in its datacenters, experts keeping a close eye on Big Red's commercials are warning customers to tread carefully when choosing the transition.

In September last year, the two tech giants announced some of Oracle's hardware would live in Azure datacenters for a service called "Oracle Database@Azure." The plan was, they said, to reduce latency when users shift data between Oracle databases and Azure services and/or infrastructure.

Speaking at the time of the news, Oracle founder and CTO Larry Ellison said: "We've made it one seamless thing: you go to the Azure portal, you can provision an Oracle Autonomous Database, our very latest technology on an Exadata server, our very fastest technology. You can then marry that to OpenAI technology, [Microsoft collaboration platform] Teams. You can marry that to this incredible library of Microsoft technology: it's all now one multi-cloud system."

But in the documentation [PDF] describing guidelines for licensing its products in the cloud, Oracle says it counts "two vCPUs as equivalent to one Oracle Processor license if multithreading of processor cores is enabled."

The outcome is that, as Oracle sees it, customers pay double to move their database license to Azure. In the main news, Oracle said customers could use their Bring-Your-Own-License scheme or Unlimited License Agreements (ULA), to make the purchases in Azure.

Oracle licensing expert Craig Guarente, Palisade Compliance founder and CEO, told The Register:

"They say you need twice as many licenses over there [in Azure], but none of this is contractual; it's just stuff Oracle makes up. I think it's going to be an expensive solution. You have to buy some stuff from Oracle, and you have to log into Microsoft marketplace and buy some stuff from Microsoft. It's not one vendor. Now you're dealing with two."

Guarente said customers considering the move should look at their contracts with Oracle for the terms detailing different ways to license in cloud versus on prem, such as processor definitions.

"It's the same issue with virtualization and VMware that has been going on for years and years. It's not a negotiation. If you're running on-prem and you want to move to Azure, the last thing I would do is go to Oracle and say, 'Am I allowed to do this?'"

However, notwithstanding commercial considerations, for some users, the Oracle-Microsoft tie-up could work well, he said. "These are embedded Oracle users using Exadata on-prem, and… [if] you're an Azure fan, then this could be a really good fit for you."

The Register has asked Oracle for a statement.

Eric Guyer, founding partner with software asset management advisory firm Remend, said interest from Oracle customers had been muted since the announcement of Oracle Database@Azure. "[Nonetheless] I'm confident it comes at a premium. Larry Ellison said in the announcement that Exadata is the model, and the part numbers affirm this. Our customers seek to commoditize database services and save money; Exadata runs the opposite direction, the most expensive deployment model, no matter whose cloud," he said.

Another licensing expert who spoke to The Register and asked not to be named said he had seen many cases where companies lift and shift their infrastructure to the cloud to reduce their IT costs or to use new technical advantages presented by advancing cloud technology - only to find that their migration now requires double the amount of Oracle licenses previously required.

"The cost of enterprise software simply cannot be ignored when making the decision to move to the cloud. My advice to any organization considering Oracle Database@Azure would be to make sure that their Oracle licensing experts are sitting at the table throughout the decision-making process," he said. ®

https://www.theregister.com//2024/02/05/oracle_database_deal_in_azure/