Microsoft SQL Server has historically been known as the budget database in IT circles. When compared to offerings from Oracle, it was widely and fairly accurately accepted that Microsoft SQL Server was a less expensive database option for many mid-sized organizations.
Until a few years ago, it was usually fairly accurate to expect that Oracle Database products would be much more expensive than Microsoft’s SQL Server and this was the result of what I can only assume to be a deliberate Microsoft pricing strategy. When Microsoft first entered the database marketplace, there was really no question that their product lacked Enterprise feature parity with Oracle’s database products. Since Microsoft SQL Server could not compete head to head on features, it appears that Microsoft priced the product very aggressively in order to be competitive. This created a situation in which SQL Server was indeed usually less expensive than Oracle Database for many years.
Prior to the launch of Microsoft SQL Server 2012, you could license Microsoft SQL Server in two manners:
You could license each Microsoft SQL Server and then buy Client Access Licenses (CALs) for each user or device that could access the Microsoft SQL Server.
Simply license each physical CPU in the Server and an unlimited number of users/devices could access the Microsoft SQL Server.
The result was an affordable licensing model which quickly gained traction in the enterprise space both due to pricing and and the fact that over time SQL Server became a much more robust and mature product. One other factor that helped to drive the price down was the fact that most enterprise clients had existing licensing agreements which based their pricing discounts on the client’s desktop count (and took into account their all up Microsoft spend). This allowed clients to easily add SQL Server to their existing Microsoft licensing models such as Enterprise Agreements and leverage the existing volume licensing discounts.
With the launch of Microsoft SQL Server 2012, Microsoft radically changed the licensing model for Microsoft SQL Server. At a high level here are the key changes:
- CPU based licensing was replaced with Core based licensing. Clients with existing core based licenses were transitioned at a 4:1 ratio to the new model.
- Microsoft SQL Server Enterprise Edition can no longer be licensed via the server Server/CAL model unless grandfathered in via a legacy licensing model
- Microsoft SQL Server Enterprise Server/CAL is limited to less than 20 cores.
- Microsoft SQL Server Standard edition is limited to 16 physical cores.
For many clients this resulted in dramatically increased licensing costs. Mike Austin who leads our services team wrote a piece about how some clients could expect to experience 1500% price increases upon renewing their existing Microsoft SQL Server estate. You can read the full detailed blog post and I do recommend reading it.
How does this new Microsoft model compare to Oracle licensing costs?
What many clients don’t realize is that this new licensing model has resulted in Oracle licensing becoming a comparatively more cost efficient option. The best way to illustrate this is to examine a client scenario and compare pricing options.
Our client has one CS7000 chassis with nine blades. Each of the blades have two twelve core processors. This gives them a total of 18 processors and 432 cores.
Microsoft SQL Server Enterprise: $12M
Oracle Database Enterprise: $10.2M
To further understand the numbers, we then took the total licensing spend and broke it out further to understand what this would look like in a 6-year model which includes ongoing support/Software Assurance.
|Total 6 Year Cost||$16.1M||$19.2M|
As you can see, the Oracle solution is clearly the more cost effective option. The discounting is important as even a standard Oracle discount will far outstrip what Microsoft generally is willing or able to offer. This is due to different discounting policies and levels of individual empowerment within each organization. In this particular scenario, the Oracle pricing could potentially be driven down even further by the considering if Oracle Enterprise was really required or if Oracle Standard edition would be sufficient. In many ways Microsoft SQL Server Enterprise is similar from a Transaction Processing (TP) perspective to Oracle Database Standard edition.
What does this mean to you?
We recognize that most organizations are unlikely to embark on a re-platforming exercise from Microsoft SQL Server to Oracle Database for a large variety of reasons. However, we recommend that organizations consider Oracle Database for net new projects. Also, in net new database situations there may be additional savings to be found in which it is possible to utilize Oracle Virtualization instead of alternative virtualization technologies. This is a result of Oracle allowing clients to not license additional virtual instances as long as Oracle Virtualization is the underlying technology.
MetrixData360 specializes in helping our client’s take control of their Microsoft licensing negotiations. We teach clients to negotiate effectively with Microsoft in both audit and renewal situations with an eye to reducing costs. MetrixData360 is also an Oracle Gold Partner and works to provide creative Oracle licensing solutions. Contact us today for a free initial consultation and discover how we can reduce your costs.