The Oracle Partitioning Policy and VMware: Why the Policy Is Not Your Contract

The short answer: the Oracle Partitioning Policy is a policy document, not part of your contract. Oracle’s policy says VMware and other soft partitioning are “not permitted as a means to determine or limit the number of software licenses”. But the document itself says it is “for educational purposes only” and “may not be incorporated into any contract”. Unless your signed agreement points to it by name, you are not contractually bound by it. What you must license is decided by your contract.

By Sheshagiri Anegondi, Managing Partner of Rythium Technologies

What the Oracle partitioning policy says

The policy sorts virtualization into two kinds. Hard partitioning physically separates a server into smaller systems, and Oracle accepts it for limiting the licenses you need. Oracle names the technologies it accepts, among them IBM LPAR and DLPAR, capped IBM Micro-Partitions, capped Solaris Zones and Fujitsu PPAR, plus Oracle Linux KVM and Oracle VM Server when specific cores are allocated, and says no other technology or configuration qualifies. Everything else is soft partitioning, VMware included, which the policy says is not permitted as a means to limit the number of licenses.

What the policy costs if you accept it

Take one Oracle Database Enterprise Edition virtual machine with 4 vCPUs. Read Oracle’s way, on a shared VMware cluster of 3 hosts and 96 cores it needs 48 processor licenses: US$2,280,000 at list. Moved to 2 dedicated hosts with 32 cores, it needs 16: US$760,000. Both use the 0.5 core factor and US$47,500 per processor from Oracle’s price list of 15 September 2026, as on our Oracle on VMware page. The 4 vCPUs never come into it. That gap is what the contract question below is worth.

Oracle’s partitioning policy and your contract

For many years Oracle has used a document called the “Oracle Partitioning Policy” to claim that customers using VMware must license every processor core in every server in their vCenter, or even their entire data center.

As a former Vice President at Oracle, I have seen how this document is used as a main revenue lever during audits. There is a fundamental gap between Oracle’s sales policy and your legal contract.

The disclaimer Oracle does not mention

The policy states that it is for educational purposes only and that it may not be incorporated into any contract. Despite this, Oracle auditors frequently present these guidelines as if they were binding. If your contract (the OMA or OLSA) does not explicitly point to the policy, you are not contractually bound by it.

“Installed and/or running” versus “could run”

The Oracle Master Agreement (OMA) defines the Processor metric by where the Oracle programs are “installed and/or running”.

• Oracle’s claim: because a VM could migrate to any host in a cluster, the software is “installed” on all of them.
• The forensic reality: in a court of law, “installed” has a technical definition: the binaries are present on a storage volume associated with a specific CPU. The possibility of migration is not a licensable event under standard contract law.

A forensic defense strategy

When we face a VMware-based audit claim with a client, we advise three steps.

• Isolate the data. Provide only the data for the specific hosts where Oracle is actually running. Do not volunteer the global vCenter map unless you are contractually compelled to.
• Challenge the authority. Ask the auditor: “Can you point to the specific clause in our signed OMA that incorporates the Partitioning Policy document by name?”
• Document the kill-switch. Show that while migration is possible, your internal governance (affinity rules, for example) prevents the software from running on non-licensed cores.

For the practical steps of licensing Oracle on VMware, see Oracle on VMware licensing. If you are already in an audit, see Oracle license audit defense.

Questions we are asked about the Oracle partitioning policy

What is the Oracle partitioning policy?

It is an Oracle document that lists which partitioning technologies Oracle accepts for limiting licenses. It treats soft partitioning, including VMware, as not acceptable for that purpose.

Is the Oracle partitioning policy part of my contract?

Only if your signed agreement incorporates it by name. The policy itself says it may not be incorporated into any contract.

Does VMware count as hard partitioning for Oracle?

No. Oracle’s policy treats VMware as soft partitioning, so in an audit Oracle starts from every core of every host the virtual machine can move to. Whether that holds depends on your contract, not on the policy.

Sheshagiri is the author of Licensing Oracle (ISBN 9781639046881).