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The Oracle License Audit and Review: Guide to the LMS Process

Oracle license audit and reviews can be frequent, interruptive, time consuming, and risky for customers.  Use this guide to stay informed on you license entitlements and usage.

Some things you should be particularly aware of are the processor core factor, price lists, partitioning policies, Oracle on VMWare, NUP Licensing, and ULA Agreements.

Enterprise Licensing

In a 2015 survey of 1,460 Enterprise IT and Data Center respondents conducted by Turbonomic, Oracle’s licensing model was deemed least fair across the polled respondents. Customers were asked to rank the fairness on a scale of 1 to 4 across enterprise software vendors including Oracle, Microsoft, IBM, and VMWare with 1 being least fair and 4 being the most fair.

  • VMWare 70% 70%
  • Microsoft 55% 55%
  • IBM 54% 54%
  • Oracle 45% 45%

Core Factor Licensing

With CPU core counts increasing each year, you may not be able to replace your hardware without increasing your Oracle licenses due to core factors.

Licensing VMWare

Virtualization is great for customers!  Oracle licensing on VMWare can apply to cores you don’t use.  Beware of sub-capacity and cluster licensing.

Disaster Recovery Licensing

DR is a necessity to business continuity but be careful how you configure your standby and mirrored environments as they must be fully licensed with the same core metrics, features, and options.

New Features

Oracle software installs with everything, including features and options which you may not be licensed for.  Use them without a license and you could end up owing.

Licensing Encryption

Another useful feature embedded into many commands, encryption may trigger the Advanced Security Option license.  Beware of ‘set encryption on’ in RMAN for example.

Compression Licensing

Oracle Advanced Compression is a useful feature, however, it can’t be de-installed or disabled.  If you use the compression clause in many SQL commands without a license, you won’t be in compliance.

Limited Use Licenses

If you’re running certain applications such as Oracle EBS, you may have a restricted use on the underlying platform software.  Make a required customization in E-Business and it could cost you.

SAN Failover Licensing

Using a SAN?  You can test failovers onto unlicensed harware up to four times per year, but not if you leave the binaries installed.

Licensing Multiplexed Connections

Concentrated connection pools, common in most web applications and IOT, can run afoul of Oracle licensing policies. Beware of shared accounts and generic user names.

What to do Next?


Don't wait for a License Review Letter

Prevention is the best cure for Oracle licensing compliance issues.  Conduct your own internal licensing review to lessen the risk and reduce the financial exposure of being found out of license compliance.


Understand your License Agreements

Collect your ordering documents that describe the quantities and prices.  There may be more than one set of docs, especially if you’ve had M&A activity.  Make sure you note any differences between the ordering documents, master agreements, licensing rules & definitions, and the licensing and services agreements.


Formulate a Mitigation Plan

Get your software inventory up to date.  Collect your license entitlement information and reconcile the two.  Once you understand the potential compliance issues, devise a plan of action.  This can include migration, consolidation and the cloud.


Engage a Trusted Advisor

An expert with licensing can help you understand exactly what information will be sent to any software vendors, giving you early visibility into possible compliance issues.



Don’t send any information until you identify and understand your exposure.  License reviews are requested more frequently than formal license audits.  If you are asked to fill out a worksheet or run a script, don’t do it until you’ve identified your exposure.  If you are uncertain, engage a qualified independent third party for assistance.

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License Review Letter

The audit will start when you receive a notification letter from Oracle license management services usually addressed to the CFO and/or CIO. You are not required to do anything at this point except to notify Oracle, after 45 days, that you received the letter.

Oracle Developer Licensing

Oracle may grant a 30- or 60-day developer license as part of its strategy to encourage developers to adopt Oracle products. Oracle’s premier low code platform, Oracle Apex is included at no cost with the Oracle Database.

Oracle License Audit Scripts

As the audit progresses, Oracle will ask you to complete a server configuration worksheet and ask you to run some measure scripts on each of your servers and databases.  The output of these scripts can be cryptic.  Basically Oracle is interested in what products you are running, on what operating systems, on what virtualization, and what hardware architecture and core counts.

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