As per a recent study, a significant portion of an organization’s IT budget—up to 60%—can be spent on licensing fees, particularly for companies using Oracle. This often-overlooked cost can drain resources that could otherwise be allocated to other business needs. The exact percentage varies depending on factors such as organization size, database usage, and licensing models.

But what if there is a way to reduce these costs without compromising on performance or security?

This blog will explore strategies businesses can adopt to lower their licensing expenses, with a focus on how Ahana’s expertise can optimize database management and help save on these costs.

 

Types of Enterprise Licenses for Database Management

Understanding the various types of enterprise licenses is crucial, as each can significantly impact the overall cost of database management.

 

1. Standard vs. Enterprise Editions: 

While the enterprise edition offers a complete range of features such as advanced security, high availability, and scalability, many organizations can function effectively with the standard edition. The standard edition is often less than half the price of the enterprise edition, offering businesses a substantial cost-saving opportunity if enterprise-level features are not necessary.

 

2. User-Based, CPU-Based, and Site-Based Licensing: 

These licensing models are based on users, CPUs, or the entire site. Businesses must align their licensing model with usage patterns to optimize costs. For example, organizations with a high number of users may benefit from user-based licensing, whereas those with high workloads might find CPU-based licensing more economical.

 

3. Oracle ULA (Unlimited License Agreement): 

While the ULA allows unlimited usage during the contract period, it can lead to over-licensing, especially when workloads change. Companies should carefully assess their current needs and growth projections to determine whether a ULA will truly reduce costs.

 

Common Opportunities for Cost Savings

By making informed decisions about licensing models, businesses can achieve significant savings. Here are some common scenarios where savings can be realized:

 

1. Consolidating Oracle Databases: 

Many businesses maintain multiple Oracle instances that could be reduced through consolidation. This decreases the number of licenses required, as fewer CPUs or cores are needed, leading to direct cost reductions.

 

2. Migrating to Standard Editions:

For non-critical workloads, migrating from Oracle’s Enterprise Edition to the Standard Edition can lead to up to 40% savings in licensing costs. The Standard Edition offers sufficient functionality for many businesses without the additional features and costs of the Enterprise Edition.

 

3. Shifting to Open-Source Databases: 

Open-source databases like PostgreSQL and MySQL are gaining popularity as cost-effective alternatives to proprietary systems. These platforms offer similar functionalities at no licensing cost, and depending on the scale of operations, businesses can save up to 50%.

 

4. Corporate Licensing Agreements:

Large organizations often qualify for volume discounts through corporate licensing agreements, which can reduce costs by up to 30%. This strategy involves negotiating better rates for large numbers of users or instances.

 

Understanding High Licensing Costs and Optimization Strategies

In addition to direct licensing costs, businesses face hidden expenses, such as Annual Maintenance Costs (AMC) and Capital Expenditures (CAPEX), which can add up quickly and strain IT budgets.

 

1. AMC (Annual Maintenance Costs): 

Typically ranging from 15% to 22% of the total licensing cost, AMC covers ongoing support, software updates, and bug fixes. Companies should regularly evaluate the value they receive from these agreements and adjust their plans accordingly to reduce unnecessary expenses.

 

2. CAPEX (Capital Expenditures): 

The upfront costs associated with purchasing licenses and hardware can be considerable. To avoid over-investment in infrastructure, organizations should balance CAPEX with operational costs, ensuring efficient use of resources.

While optimizing licenses, businesses should also consider indirect savings, such as improvements in system performance, reduced downtime, and lower administrative costs. A more efficient database management system leads to better operational performance, which contributes to long-term cost savings.

 

Calculating Cost Savings & ROI

When calculating cost savings and ROI, businesses must consider both direct and indirect factors.

 

1. Direct Savings: 

These include immediate reductions in licensing fees, hardware costs, and infrastructure expenses. By consolidating databases, migrating to open-source solutions, or adopting cloud platforms, businesses can significantly lower recurring licensing and maintenance costs.

 

2. Indirect Savings: 

These savings are less immediate but can be just as impactful. Improved system performance, reduced downtime, and decreased administrative costs all contribute to the long-term value of optimized database management.

However, ROI calculations can be complicated by migration costs, the expense of running dual systems during transition periods, and the costs of training employees on new platforms. Despite these complexities, the long-term benefits of migrating to optimized solutions generally outweigh the initial investments.

 

How Ahana Drives Cost Savings on Enterprise Database Licensing

Ahana helps businesses reduce their annual licensing costs by 50-60%. Here’s how:

 

1. Comprehensive License Audits: 

Ahana’s experts perform thorough audits to identify over-licensed and under-utilized systems, enabling businesses to consolidate licenses and eliminate unnecessary costs.

 

2. Database Migrations: 

Ahana assists businesses in migrating from expensive proprietary systems like Oracle to more affordable options, such as open-source databases or cloud-based platforms. These migrations minimize disruption while optimizing both performance and costs.

 

3. Leveraging OEM Partnerships: 

As a gold member with major OEMs, Ahana has access to discounted licenses. By partnering with Ahana, businesses can secure better licensing terms, often resulting in 50-60% savings.

 

Client Success Stories

 

Ahana’s database migration expertise has helped numerous organizations achieve significant licensing cost reductions:

• Ahana’s Sybase to MS SQL Migration for a Fortune Global 500 Corporation Achieved a 40% Performance Increase and 60% Cost Reduction – Read More
• Ahana’s SAP ASE 15.7 to 16.0 Migration for a Leading Indian Stock Broking Company Delivered a 25% Performance Boost and 30% Savings in Licensing Costs – Read more
• Ahana Enabled a Leading SaaS Provider to Transition from MSSQL to PostgreSQL, Reducing Licensing Costs Significantly – Read more

 

Additional Areas for Cost Reduction

Beyond relational databases (RDBMS), there are other areas in data infrastructure where businesses can achieve cost savings:

 

1. Open-Source IDMS: 

Open-source database management systems like PostgreSQL and MySQL provide an excellent alternative to expensive proprietary systems, offering flexibility and scalability without licensing costs.

 

2. Cloud-Based Databases: 

Cloud solutions, such as AWS RDS or Azure SQL Database, offer cost-saving benefits by eliminating the need for physical hardware, data center space, and extensive maintenance.

 

3. Licensing Consolidation in the Cloud: 

Cloud platforms allow for licensing consolidation, often resulting in lower costs. With models that offer discounts based on usage and reserved capacity, businesses can further reduce both licensing and infrastructure expenses.

 

Conclusion

Enterprise licensing for data management can consume a significant portion of a company’s IT budget. However, through strategies like database consolidation, migration to open-source alternatives, and cloud solutions, businesses can achieve substantial cost savings.

Ahana specializes in guiding businesses through these transitions, offering expertise in cloud infrastructure, data schema conversions, and enterprise licensing. By partnering with Ahana, organizations can reduce operational and licensing costs, driving both short-term savings and long-term efficiency.

Contact Ahana today to learn how we can help you cut down on enterprise licensing costs and optimize your data infrastructure for improved efficiency.