VMware and your Oracle licensing: an update

2 September 2024
VMware and your Oracle licensing image

Inoapps Oracle Licensing Series: Part Nine

By Hazel Hopes
Licensing Consultant at Inoapps

As you may know, Oracle’s policy on VMware has always been controversial. The policy states that every data center host that could run an Oracle product should be licensed accordingly, regardless of whether or not they actually are.

The could element of that statement is where the issues arise, as VMware provides powerful tools to migrate virtual machines across data centers and networks.

In this blog, I’ll offer some insights into how this might apply to your environments and to look at recent developments with the 2023 Broadcom acquisition of VMware, along with the Oracle Cloud alternative.

Advice for on-premises deployments

If your business uses VMware virtualization in a data center/on-premises, then you should isolate and restrict the following areas to reduce your license consumption of Oracle products:

  • Hardware
  • Network
  • Storage
  • Migration capability

Ideally, you will have a separate VLAN (network) with its own storage for your Oracle environments, with all hosts (hardware) licensed accordingly and where migration is not possible.

Because Oracle audits will look at Oracle products hosted on VMware—particularly post v6.x releases, as these brought the biggest changes in migration capability—it is also recommended that you take screenshots and keep logs. This allows you to provide evidence of the isolation strategies you’ve used and shows how long the isolation has been in place. 

It will save time and resource to have these to hand to provide to an auditor, if needed and will satisfy Oracle’s requirements.

VMware and Broadcom

In 2023, Broadcom acquired VMware and set about making some changes to the way VMware is licensed.  The main points being:

  • Broadcom has reduced the VMware offering to two main bundles: one for vSphere and one for vCloud, with the latter targeted at its bigger customers
  • There is a model change in the channel partner structure with Broadcom focusing on a smaller number of resellers and targeting direct relationships with its larger customers
  • VMware is moving to a subscription model, meaning perpetual licenses are no longer available to purchase

The move to a subscription model is the clearest indicator yet of the direction to cloud. Our expectation is that some VMware customers will face new, subscription-based agreements with different partners once their existing agreements come to an end.

This may then include additional components in the bundling that are not required, depending on the VMware product consumption of each customer. Customers who are using a small proportion of the VMware products could experience price increases because of the bundling. However, customers using the complete portfolio of VMware products may see a reduction in support fees for the same reason.

Oracle Cloud VMware Solution

Oracle has introduced a cloud-based alternative in the shape of Oracle Cloud VMware Solution (OVCS). OVCS uses a mechanism called Hybrid Cloud Extension (HCX) to ease your migration into Oracle Cloud. This offers the means to restrict core consumption via software-defined data centers, cluster definition and scalability, which helps to meet the need to restrict consumption and therefore costs.

While any migration involves planning and effort, the resulting management and visibility that OCVS offers is unique in providing a low risk, low disruption and cost-effective migration alternative.  Because its cloud-based, it also means that you can increase or decrease your estate to fit your business strategy without the restrictions of a physical data center.

Subscriptions to OVCS can require hourly, monthly, one-year or three-year commitments, depending upon the SKU (Part number) deployed. Deleting any instances before the committed period is complete will not reduce the usage calculation or associated cost - so care is needed to choose the most appropriate SKU for your business.

Next steps

If you are an existing VMware and Oracle customer, your next steps depend on whether your appetite leans toward negotiating contractual details aligned to the new offerings with potential new partners or for migrating to Oracle Cloud. Whichever you choose, as you see, there are mechanisms to constrain your VMware deployments in a way that Oracle finds acceptable and keeps your Oracle licensing spend under control.

If you're uncertain about the best choice for your business context, reach out and the friendly team at Inoapps can help. 

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