Licensing Oracle Software in the Cloud

Oracle recently published a policy document entitled “Licensing Oracle Software in the Cloud Computing Environment” which sets out specific requirements on customers when licensing various Oracle programs and using them in the following cloud computing environments:

• Amazon Web Services
• Amazon Elastic Compute Cloud (EC2)
• Amazon Relational Database Service (RDS)
• Microsoft Azure Platform.

Oracle refers to these as “Authorized Cloud Environments.” The policy applies to a long list of Oracle programs (the list stretches over five pages), which you can review at this link, and applies to any of the listed software products when hosted in an Authorized Cloud Environment. The policy sets out some very specific requirements with potential licensing fee impacts.

For example, when using the products in Amazon EC2 and RDS, and Amazon Azure, a customer must count two virtual central processing units (vCPUs) as equivalent to one Oracle Processor license if hyper-threading is enabled, and one vCPU as equivalent to one Oracle Processor license if hyper-threading is not enabled.

A second example: for Oracle Linux purposes, each Authorized Cloud Environment instance is counted as a “System” and “Basic Limited” and “Premier Limited” support is not available for Authorized Cloud Environment instances with more than eight Amazon vCPUs or eight Azure vCPUs.

The document’s footer includes the following statement:

“This document is for educational purposes only and provides guidelines regarding Oracle’s policies in effect as of January 23rd, 2018. It may not be incorporated into any contract and does not constitute a contract or a commitment to any specific terms. Policies and this document are subject to change without notice.”

Describing the document as having “educational purposes” and denying that it may be incorporated into any contract strongly suggests that the policy is not intended by Oracle to have any contractual effect. However, as discussed, the main part of the document deals with some very specific requirements on its customers when licensing any of these Oracle programs and using them in an Authorized Cloud Environment. This sets up tension between that bold disclaimer statement and what appears to be the underlying purpose of the policy, which is to articulate specific requirements which go to the heart of the underlying software license agreement between Oracle and its customers since counts will often impact pricing (although this can depend on the licensing model). Whatever the actual status of the policy, contractual or otherwise, cloud users of these products need to review it very carefully with a close eye on their existing Oracle licensing arrangements.