Oracle PAH License: What ISV should know

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Understanding Oracle PAH License model: A Guide for Independent Software Vendors

Oracle PAH license is a licensing option available for Oracle Independent Software Vendors (ISVs), which enables them to use all Oracle technology software, including databases and middleware, to build and run their intellectual property as a software-as-a-service (SaaS) in hosting environments. This article will explore Oracle PAH licensing in more detail, including its limitations, risks associated with incorrectly purchasing these licenses, and the differences between PAH licenses and full-use licenses. Additionally, we will provide answers to some of the most frequently asked questions about Oracle hosting licenses. By the end of this article, readers will have a better understanding of the Oracle PAH license and whether it is the right licensing model for their needs.

The Difference between Oracle PAH License and Full-Use Licenses

The difference between Oracle PAH License and Full-Use Licenses lies in who is authorized to use them and for what purpose. Full-use licenses are purchased by Oracle end customers and allow them to use Oracle software licenses for internal business operations without any restrictions on the applications they can be used for. These licenses grant limited rights to use the programs and receive any ordered services solely for internal business operations, as outlined in the Oracle OMA agreement.

On the other hand, Oracle PAH licenses are available only to Oracle Independent Software Vendors (ISVs) and enable the use of all Oracle technology software in hosting environments to build and run their intellectual property as a software-as-a-service (SaaS). PAH licenses are owned by the ISV, not the end customer, and cannot be used for third-party applications. PAH licenses must be used for environments with one or more end customers, not for 1:1 hosting. The PAH license model is restricted to a specific solution/application, as defined in the Oracle licensing agreement between Oracle and the ISV.

Oracle PAH Licensing Limitations

There are some limitations to Oracle PAH licenses that companies should be aware of before opting for this licensing model. The license is restricted to a specific solution or application, as defined in the Oracle licensing agreement between Oracle and the ISV, which includes an Oracle APRF document. Additionally, the solution based on Oracle PAH licenses must be commercially available to multiple end customers.

It is worth noting that if an end customer is considering purchasing new PAH licenses to replace old internal use licenses, it is important to ensure compliance before purchasing. The solution must be commercially available, and the PAH licenses can only be used for environments with one or more end customers, not for 1:1 hosting.

Risks of Incorrectly Purchasing Oracle PAH Licenses

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 risk.

Oracle customers should independently review the PAH license metric and decide if this is indeed aimed at their usage. If a customer signs 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.

Oracle License Agreements Regarding Hosting

There are two variations of Oracle license agreements regarding hosting. One contract includes “Internet hosting” in the Oracle Ordering Document. This allows customers who have purchased full-use licenses to use the licenses for both internal business operations and external entities.

Oracle Proprietary Hosting is when a company becomes an Oracle ISV and agrees to sign Oracle partner agreements, including the APRF form. This allows the use of all Oracle technology software in hosting environments to build and run their intellectual property as a software-as-a-service (SaaS).

Frequently Asked Questions about Oracle Hosting Licenses

  • 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.
  • 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. It is the customer’s responsibility to understand and agree to the terms they are signing.
  • 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.
  • 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.
  • 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.
  • 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.
  • How do the licensing metrics work with Oracle hosting licenses?

Conclusion:

Oracle PAH licensing is a great option for Independent Software Vendors to run their intellectual property as a software-as-a-service (SaaS). However, it is essential to understand the limitations of PAH licensing and risks of incorrect purchasing. Oracle licensing agreements can be complex, and it is recommended to seek guidance from a seasoned Oracle licensing expert to avoid financial and legal risks.

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