> I'm now hearing requirements that the application will be on its own,
> dedicated, instance.
> We are trying to keep away from that.

Why? This is actually a Good Thing in most cases. It also allows you to
individually throttle badly behaved applications when necessary, and
makes accounting for rotten code a lot easier to do. 

> Or course, if the database structure and/or the queries are poorly
> designed, then having most of the database in the SGA, can hide a lot
of
> performance problems. <G>

Most Oracle apps are poorly designed or tuned, or both. Isolating each
app into separate servers gives you demonstratable proof of which part
is going bad. Reduces finger-pointing by significant margin -- although
keep in mind that it also exposes who's been hiding badly designed apps
in the hardware budget, and those people won't be happy. 

> So, who has some guesses on valid reasons for having one application
per
> Oracle instance.  Again, a dozen or so users, the tables occupying
about
> 1-2 GB in total.

There's no licensing issue to do it (in fact, that's a good factor to
feed into the cost case). Most cases, the virtual machines don't need to
be as big as they were before, so you can squeeze the requirements
significantly (subject to your performance monitor results), and you get
the simplicity of managing one app per server without competing resource
demands. 

You have to pick your battles. This is one where it's not worth
fighting, and you get benefits by giving in. Give it to them. 

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