Oracle TERM License vs. Oracle Perpetual
Oracle has two different license metrics, Oracle TERM licenses, and Oracle perpetual licenses. This article will explain the differences and your options to license Oracle.
The short answer:
- An Oracle perpetual license allows a user to access software indefinitely.
- An Oracle term license allows a user to access software for a specific period.
- Before September 1, 2020, Oracle offered term licenses for its on-premises programs ranging from one to five years.
- As of September 1, 2020, Oracle stopped selling term licenses for most of its on-premises programs but will continue to sell a one-year term license for a limited number of its “Technology programs.”
The long answer
Oracle generally sells software licenses with a permanent duration (Perpetual) but also did offer an option to purchase licenses for a specific term. Oracle had Oracle TERM licenses ranging from one to 5 years.
The price for a term license was based on a percentage of the price for a perpetual license and was available for terms ranging from one to five years:
- One year: 20% of the list price
- Two years: 35% of the list price
- Three years: 50% of the list price
- Four years: 60% of the list price
- Five years: 70% of the list price
It is important to note that – Technical support for term licenses is equal to 22% of the perpetual net fee.
Oracle made a change to the availability of term licenses.
As of September 1, 2020, Oracle has stopped selling on-premises term licenses (with terms ranging from one to five years) for most of its on-premises programs. However, Oracle will continue to sell a one-year term license for a limited number of its “Technology programs,” including:
- Oracle Database Standard Edition 2
- Oracle Database Enterprise Edition
Options for Oracle Database Enterprise Edition:
- Oracle Active Data Guard
- Oracle Advanced Compression
- Oracle Advanced Security
- Oracle Database In-Memory
- Oracle Database Vault
- Oracle Multitenant
- Oracle OLAP
- Oracle Partitioning
- Oracle Real Application Clusters
- Oracle Real Application Clusters One Node
- Oracle Real Application Testing
Oracle Database Enterprise Management Packs:
- Oracle Diagnostics Pack
- Oracle Tuning Pack
- Oracle Forms & Reports
- Oracle Internet Application Server Enterprise Edition
- Oracle WebLogic Server Enterprise Edition
- Oracle WebLogic Server Standard Edition
- Oracle WebLogic Suite
Options for Oracle WebLogic Suite:
- Oracle SOA Suite for Oracle Middleware
Oracle Data Integration Programs:
- Oracle Golden Gate
Oracle Exadata Programs:
- Exadata Storage Server Software
What does it mean for you?
Organizations with existing term licenses that are currently paying support for these licenses will continue to be supported until the end of their term.
Term licenses are typically relevant to end users in two specific situations:
- Infrastructure Change: When an end user is changing their infrastructure (e.g., upgrading hardware or moving from on-premises to the cloud), the Oracle software will be installed and used on both the current and new infrastructure for a limited period of time. This period of dual use is often licensed through term licenses. However, if the migration involves Oracle programs for which only a one-year term license is available, the end user will need to complete the infrastructure change within that one-year period. If the migration involves programs for which no term licenses are available, the end user will need to purchase more expensive perpetual licenses for both the current and new infrastructure.
- Non-Compliance Resolutions: In cases where an end user is found to be “non-compliant” due to “unintended use” of specific Oracle software programs during an audit, they may not wish to continue using the program and, therefore, may not want to purchase an expensive perpetual license. In the past, commercial settlement discussions in such situations would often result in the end user purchasing a retroactive term license for the period of unlicensed use. This term would typically be two to three years, based on the start date of the unlicensed use as determined by the output of audit scripts. However, as of now, if an end user is found to be non-compliant for a program that was used for more than one year, they will need to purchase more expensive perpetual licenses (or enter into an Unlimited License Agreement) to resolve the non-compliance.
Oracle TERM license FAQ
- What are Oracle term licenses? Term licenses are a type of Oracle software license that allows the user to access the software for a specific period of time rather than indefinitely, as with a perpetual license. Term licenses were previously available in terms ranging from one to five years, but as of September 1, 2020, Oracle stopped selling term licenses for most of its on-premises programs.
- What programs are still eligible for term licenses? Term licenses are currently only available for a limited number of Oracle “Technology programs,” including certain Oracle Database, Oracle Middleware, Oracle Data Integration, and Oracle Exadata programs.
- What happens to organizations with existing term licenses? Organizations with existing term licenses that are currently paying support for these licenses will continue to be supported until the end of their term.
- Why did Oracle stop selling term licenses? It is not clear why Oracle made the decision to stop selling term licenses for most of its on-premises programs. It is possible that the company wanted to encourage users to switch to perpetual licenses or to its cloud-based offerings.
- How can organizations license Oracle software if term licenses are no longer available? Organizations can still license Oracle software on a perpetual basis, or they can consider using Oracle’s cloud-based offerings. It is important for organizations to carefully review their specific needs and budget to determine the best licensing option for them.
- Is there any other way how to obtain a two or 3-year license? You can negotiate with Oracle and buy a two or 3-year license. It’s not on the price list, but you can negotiate such a license with Oracle.