What is Oracle PAH license ?
Oracle PAH License , or Oracle Proprietary Application hosting license, is a licensing option specifically for Oracle Independent Software Vendors (ISVs). It allows these ISVs to use all Oracle technology software, including databases and middleware such as WebLogic, in hosting environments to build and run their intellectual property as a software-as-a-service (SaaS). This licensing model has replaced generic hosting licenses previously offered by Oracle for use in the early 2000s to 2010s
The difference between Oracle PAH License and Full Use Licenses
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 own intellectual property as a software-as-a-service (SaaS).
Oracle PAH licensing limitations:
- The Oracle ISV owns the license; end customers do not sign any licensing agreements.
- Oracle PAH licenses can only be used if the ISV owns the intellectual property utilizing Oracle software.
- Oracle PAH licenses cannot be used for third-party applications.
- Oracle PAH licenses must be used for environments with one or more end customers, 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. This agreement includes an Oracle APRF document.
- The solution based on Oracle PAH licenses must be commercially available to multiple end customers. If an end customer is considering purchasing new PAH licenses to replace old internal use licenses, it is important to ensure compliance before purchasing.
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 be suitable for the customer’s needs and could expose the company to financial risk.
- Oracle customers should independently review the PAH license metric and make a decision if this is indeed aimed at their usage.
Oracle license agreements regarding hosting:
- There are two variations:
- One contract includes the term “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 refers to 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 own 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?
- You may pay a slightly higher price for Oracle proprietary application hosting licenses compared to normal internal use licenses, but this must be negotiated with Oracle.
- If an Oracle account team asks me to buy Oracle hosting licenses and replace my old licenses in exchange for lower support fees over a few years, what should I do?
- 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 it is the customer’s company that will face legal and financial risk if audited. 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?
- No, as an Oracle Partner Network (OPN) member, you have the right to prototype and test your applications. However, once the application is in production, test and development environments must be licensed.
- If our proprietary hosting application is in production, do I need to license my test and development environments?
- 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?
- 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 is your advice on how to complete the Oracle APRF?
- 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.
- What if I already purchased Oracle hosting licenses but have the incorrect Oracle licensing model?
- 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 own 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?
- 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, which are defined by the license model and the APRF.
- Can I sign a proprietary hosting Unlimited License Agreement (ULA)?
- Yes, but Oracle usually puts more restrictions on proprietary hosting ULAs compared to normal ones, and the exit process can be difficult.
- Can I use PAH licenses in AWS or Azure?
- Yes, but Oracle insists you need an amendment but we argue you do not.