Understanding Oracle Hosting Licenses – Proprietary Application Hosting (PAH) License
Oracle Hosting licenses are called Oracle Proprietary Application Hosting (PAH) License is a unique licensing option designed for Independent Software Vendors (ISVs) who wish to use Oracle technology software such as databases and middleware for building and running their intellectual property as software-as-a-service (SaaS) in hosting environments. This licensing model has replaced the generic hosting licenses previously offered by Oracle from the early 2000s to the 2010s.
As a legal representative, it is essential to understand the differences between Oracle PAH licenses and Full-use licenses to help clients make informed decisions while acquiring Oracle licenses. This article discusses in detail what Oracle PAH licenses entail, their differences from full-use licenses, licensing limitations, associated risks, and frequently asked questions.
Differences between Oracle PAH License and Full-Use Licenses:
Full-use licenses grant end customers the right to use Oracle software licenses for internal business operations without restrictions on the applications used. On the other hand, Oracle PAH licenses are only available to Oracle Independent Software Vendors (ISVs) who use all Oracle technology software in hosting environments to build and run their intellectual property as a software-as-a-service (SaaS).
ISVs own Oracle PAH licenses, and end customers do not sign any licensing agreements. These licenses can only be used by ISVs who own intellectual property utilizing Oracle software, and not for third-party applications. They must be used in environments with one or more end customers and not for 1:1 hosting. The Oracle PAH license model is restricted to a specific solution/application as defined in the Oracle licensing agreement between Oracle and the ISV.
Oracle sales teams may aggressively offer customers the opportunity to repurchase their Oracle licenses under the Oracle PAH license model. However, this model may not suit the customer’s needs and could expose the company to financial risks. Customers must independently review the PAH license metric and decide if it suits their usage.
It is important understanding the different licensing options available for Oracle software can help your clients make informed decisions while acquiring software licenses. This article has discussed the differences between Oracle PAH licenses and full-use licenses, licensing limitations, associated risks, and frequently asked questions. We hope that this guide will be helpful in making informed decisions about Oracle PAH licensing.
FAQs on Oracle Hosting Licenses
Q: Is the pricing for Oracle hosting licenses the same as for Oracle full-use licenses?
A: You may pay a slightly higher price for Oracle proprietary application hosting licenses than normal internal use licenses, but this must be negotiated with Oracle.
Q: What should I do if an Oracle account team asks me to buy Oracle hosting licenses and replace my old ones in exchange for lower support fees over a few years?
A: Be cautious and review the licensing terms for PAH licenses before making a decision. The account team will collect their sales commission and leave Oracle, but the customer’s company will face legal and financial risk if audited. It is the customer’s responsibility to understand and agree to the terms they are signing.
Q: Do I need to license my test and development environments if I am developing an application that will eventually go into production?
A: No, as an Oracle Partner Network (OPN) member, you have the right to prototype and test your applications. However, test and development environments must be licensed once the application is in production.
Q: If our proprietary hosting application is in production, do I need to license my test and development environments? A: Yes, as soon as your application is in production, you must license all your test and development environments.
Q: How does Oracle define what I can use my Oracle hosting license for?
A: This is defined in the Application Package Registration Form (APRF), which the ISV/partner must complete and have approved by Oracle. The APRF describes the name and architecture of the application, the end customers, and other details. It becomes part of the PAH license agreement.
Q: What is your advice on how to complete the Oracle APRF?
A: Be as vague as possible, as including too many details, such as application versions, may require negotiating a new APRF agreement with Oracle for future updates. It is in the ISV’s best interest to keep the APRF vague to allow flexibility.
Q: What if I already purchased Oracle hosting licenses but have the incorrect Oracle licensing model?
A: It is the customer’s responsibility to understand and agree to the terms they signed. If the customer signed an Oracle PAH agreement and is using it for their internal use rather than for multiple end customers, there is a financial risk if Oracle audits them.
Q: How do the licensing metrics work with Oracle hosting licenses?
A: The metrics are the same as Oracle standard licensing metrics, named user plus and processor-based. The difference is in the contract terms and how the licenses can be used, defined by the license model and the APRF.
Q: Can I sign a proprietary hosting Unlimited License Agreement (ULA)?
A: Yes, but Oracle usually puts more restrictions on proprietary hosting ULAs than normal ones, and the exit process can be difficult.
Q: Can I use PAH licenses in AWS or Azure?
A: Yes, but Oracle insists you need an amendment but we argue you do not.