Oracle Licensing on Azure: A Cloud Licensing Guide

Oracle Licensing on Azure

  • Recognized Platform: Azure is an authorized public cloud for Oracle licensing.
  • vCPU-Based: License based on virtual CPUs (vCPUs); 2 vCPUs equal 1 processor license.
  • Constrained vCPU: Use constrained vCPU to optimize licensing costs.
  • Compliance: Ensure compliance with Oracle’s cloud licensing policies to avoid audit risks.
  • Supports: Both Oracle Database and WebLogic Server licensing.

Introduction Oracle Licensing on Azure

licensing Oracle on Azure

Oracle’s software licensing policies are notoriously complex, and the intricacies multiply when deploying Oracle solutions on cloud platforms like Microsoft Azure.

This guide provides a detailed overview of how Oracle licensing works on Azure, highlighting the benefits, potential pitfalls, and optimization strategies.

Whether you’re considering migrating to Azure or looking to optimize your current Oracle deployments, understanding these nuances can help you avoid costly mistakes and ensure compliance.

Understanding Oracle Licensing on Azure

Oracle recognizes Azure as an authorized public cloud platform, allowing users to leverage Oracle’s software with specific licensing rules that differ from on-premises deployments. The core principle of licensing on Azure revolves around using virtual CPUs (vCPUs).

  • Recognized Cloud Platform: Oracle acknowledges Azure as an authorized public cloud provider.
  • vCPU-Based Licensing: Licensing is based on the number of virtual CPUs (vCPUs) used, not the physical cores.
  • Processor License Calculation: If multi-threading is enabled, two vCPUs count as one processor license.
  • Compliance Requirements: Stringent compliance is necessary to avoid audit risks and additional costs.

How Does Oracle Licensing on Azure Work?

Oracle’s cloud licensing policy allows customers to license their software based on the number of vCPUs rather than physical cores. This policy simplifies the process and can potentially reduce the required licenses, making it more cost-effective for businesses.

  • License Calculation: The number of vCPUs used determines the licenses required. For example, if multi-threading is enabled, two vCPUs equate to one processor license.
  • Cloud-Specific Rules: Oracle applies unique licensing rules for Azure that are distinct from on-premises requirements.

Calculating Oracle Licensing on Azure

calculating Oracle licensing on Azure

To determine the number of Oracle licenses needed on Azure, follow these steps:

  1. Count vCPUs: Identify the number of vCPUs your Oracle software will use.
  2. Apply Multi-Threading Factor: Two vCPUs equal one processor license if multi-threading is enabled.
  3. License Requirements: Based on the vCPUs, calculate the required processor licenses.


  • Oracle Database Enterprise Edition:
    • 2 vCPUs = 1 processor license
    • 4 vCPUs = 2 processor licenses
    • 8 vCPUs = 4 processor licenses
  • Oracle Database Standard Edition 2:
    • 2 vCPUs = 1 processor
    • 4 vCPUs = 1 processor
    • 8 vCPUs = 2 processors

Benefits of Licensing Oracle on Azure

Licensing Oracle on Azure offers several advantages:

  • Flexible Capacity Licensing: Only license the capacity you need based on CPU usage.
  • Simplified Virtualization Rules: Oracle’s stringent physical host licensing rules do not apply.
  • Cost Efficiency: Potential for cost savings through optimized licensing strategies.

Common Oracle Licensing Problems on Azure

Oracle licensing problems on Azure

Despite the benefits, there are common pitfalls to watch out for:

  • Territory Restrictions: Ensure your Oracle Ordering Document allows deployment in the Azure region.
  • Contractual Limitations: Review your licensing agreement for any restrictions on Azure deployments.
  • Standard Edition Limits: Oracle Database Standard Edition 2 is limited to a maximum of 8 vCPUs on Azure.
  • ULA Exclusions: Oracle Unlimited License Agreements (ULA) often exclude Azure deployments from certification counts.

Constrained vCPU on Azure for Oracle License Optimization

Microsoft Azure offers constrained vCPU options to optimize Oracle licensing. This approach benefits Oracle workloads that require high memory, storage, and I/O bandwidth but are not CPU-intensive.

  • Reduced vCPU Count: Constrained vCPU allows the vCPU count to be reduced to a fraction of the original VM size, thus minimizing the number of Oracle licenses required.
  • Policy Compliance: According to Oracle’s cloud licensing policy, you only need to license the available vCPUs.


  • A constrained vCPU model with a reduced count ensures compliance while optimizing costs.

Avoiding Oracle Audit Risks

Facing an Oracle audit can be daunting, but there are strategies to mitigate risks:

  • Limit Information Sharing: Only disclose the number of vCPUs, not the instance type.
  • Highlight Non-Contractual Policies: The Oracle cloud licensing policy document is non-contractual and should be treated as such.
  • Focus on Available vCPUs: License only the maximum available vCPUs per Oracle’s guidelines.

Oracle Database@Azure: A Quick Overview

Oracle Database@Azure is a collaborative offering from Oracle and Microsoft that combines Oracle’s database services with Azure’s cloud infrastructure. This solution provides flexibility in licensing and deployment, catering to various business needs.

  • Deployment in Azure: Oracle Database services run within an Azure region.
  • Licensing Flexibility: Choose between BYOL (Bring Your Own License) or the license included option.
  • Billing Integration: Purchases and payments are managed through Azure, simplifying the process.

Real-Life Use Cases for Oracle Database@Azure

Here are ten scenarios where Oracle Database@Azure proves beneficial:

  1. Short-Term Licensing Needs: Pay for the license duration you need.
  2. Migrating Existing Databases: Seamless migration with added features like diagnostics and tuning.
  3. Support Cost Reduction: Qualify for support cost reductions by transitioning to Oracle Database@Azure.
  4. OCPU Flexibility: Customize instances to reduce licensing requirements.
  5. Audit Preparedness: Address licensing shortfalls by migrating to Oracle Database@Azure.
  6. ULA Shortfall Management: Rectify licensing deficits by transferring compliance issues to Oracle Database@Azure.
  7. Managing Unused Licenses: End redundant support contracts by migrating to Oracle Database@Azure.
  8. Post-Support Compliance: Stay compliant after terminating Oracle support by using Oracle Database@Azure.
  9. Balancing Third-Party Support: Opt for a hybrid approach with Oracle Database@Azure for critical support needs.
  10. Negotiation Leverage: Use Oracle Database@Azure as leverage in negotiations with Oracle.

Steps to Optimize Oracle Licensing on Azure

To ensure efficient Oracle licensing on Azure, follow these steps:

  1. Review Agreements: Thoroughly review all licensing agreements and support costs.
  2. Assess Licensing Position: Understand your current licensing status.
  3. Explore Benefits: Discover the advantages of Oracle Database@Azure.
  4. Analyze Contract Options: Determine which contracts to retain, transition as BYOL, or opt for the license-included option.

FAQs on Oracle Licensing on Azure

Can I buy an Oracle license from Azure?

  • Azure only supports the BYOL (Bring Your Own License) model. You must purchase your license from Oracle and then license it on Azure.

How does Oracle licensing work on Azure?

  • Count and multiply the vCPUs by 2 to determine the required licenses.

Is Oracle more likely to audit if we use Azure instead of OCI?

  • Oracle is more likely to audit companies using Azure than Oracle Cloud Infrastructure (OCI).

How can I migrate my Oracle database to Azure?

  • Use Azure Database Migration Service or third-party tools like Oracle’s Data Pump for seamless migration.

How can I optimize my Oracle licensing costs on Azure?

  • Choose the right size and type of Azure VMs, leverage Reserved Instances, and use Azure Hybrid Benefit if you have Software Assurance.


Navigating Oracle licensing on Azure requires a thorough understanding of both Oracle’s licensing policies and Azure’s cloud offerings. Organizations can optimize their licensing costs and ensure compliance by leveraging Azure’s flexibility and Oracle’s cloud licensing policies.

Whether migrating to Azure or optimizing existing deployments, this comprehensive guide provides the insights and strategies needed to make informed decisions and maximize the value of your Oracle investments on Azure.


  • Fredrik Filipsson

    Fredrik Filipsson is an Oracle licensing expert with over 20 years of experience in Oracle license management. He spent 10 years working for Oracle corporation and then 10 years at a consultant leading engagements on Oracle license assessments, audits, ULAs. He is a public speaker and author

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