Understanding Oracle ESL License

What is an Oracle ESL License

• ESL License: A restrictive license for ISVs to package and sell Oracle technology with their applications.
• Eligibility: ISVs must be Oracle Partners.
• Discount: 90% off Oracle technology price list.
• Usage: Specific to the application package; no direct end-user access.
• Support: Provided by the ISV, not Oracle.

Introduction to Oracle ESL License

The Oracle Embedded Software License (ESL) is a highly restrictive license offered to Independent Software Vendors (ISVs). This license allows ISVs to package and sell Oracle technology with their application or solution.

To qualify for an ESL license, the company developing the application must become an Oracle Partner. The Oracle database and its options are the most common products in an ESL license. Due to its restrictive nature, Oracle offers ISVs a 90% discount on their technology price list for an ESL license.

Oracle ESL License vs. ASFU and Full Use

There are key differences between an Oracle ESL license and Oracle’s Full Use and Application Specific Full Use (ASFU) licenses:

• Technical Support: Oracle technical support is not required for an ESL license, and most ISVs do not maintain technical support for embedded licenses.
• Listing Oracle Database: ISVs cannot list the Oracle database as a separate component on their price list or contract when reselling an ESL license.

Oracle ESL License Models

Oracle offers two license models for its Embedded Software License:

Standard Oracle Licensing Metrics

• Named User Plus and Processor: Includes a 90% discount from Oracle.
• Usage: Based on standard Oracle licensing metrics, similar to other Oracle licenses.

Royalty-Based Model

• Percentage of Sales: Oracle takes a percentage (usually 10%) of the ISV’s price list.
• No User/Processor Count: ISVs do not need to count users or processors.

ESL Licensing Limitations

The Oracle ESL license comes with several limitations:

• Specific Application Package: The license is only allowed for use with a specific application package defined in the APRF agreement between the Oracle ISV and Oracle.
• Silent Mode Installation: The Oracle database must be installed as a component and run in silent mode with no end-user configuration allowed.
• No Direct Access: End users cannot access Oracle programs directly; all database management must be done through the ISV application interface.
• Administrative Tasks: Must be managed through the ISV application interface, including startup, shutdown, and backup.
• No Third-Party Access: The database cannot have direct access to any third-party application, and the application package must have APIs to manage this.
• No Upgrades: End users cannot patch or upgrade the embedded database or create users, tables, or other objects.
• No SAM Tools: Software asset management tools cannot be used to manage an embedded license.
• No Conversion: ESL licenses cannot be upgraded to Oracle ASFU or Full Use licenses.

Oracle ESL Licenses and Audits

• No End-Customer Audits: Oracle ESL licenses are not subject to Oracle end-customer license audits.
• ISV Audits: If Oracle decides to audit the ISV that resold the ESL license, only ESL licenses are audited.
• Compliance Responsibility: End customers are not responsible for ensuring compliance with Oracle ESL licenses.

Practical Considerations for Oracle ISVs

Becoming an Oracle Partner

To obtain an ESL license, the ISV must join the Oracle Partner Network and comply with Oracle’s requirements. This involves:

• Signing Agreements: Agree to the Oracle Partner Network Master Distribution Agreement and the specific ESL agreement.
• Application Package Registration: Register each application package with Oracle, detailing the application’s specifics.

Managing ESL Licenses

ISVs must ensure they adhere to the strict guidelines associated with ESL licenses:

• Installation and Configuration: Ensure the database is installed in silent mode and managed entirely through the application interface.
• Support and Maintenance: Provide technical support and manage maintenance tasks as per Oracle’s guidelines.
• Compliance: Maintain compliance with Oracle’s rules, especially regarding virtualization and third-party access.

Benefits of Oracle ESL Licenses

• Cost Savings: ISVs receive a 90% discount on Oracle technology, making it a cost-effective solution.
• Embedded Technology: Allows ISVs to offer robust applications with embedded Oracle technology.
• Simplified Licensing: The royalty-based model simplifies the licensing process by avoiding the need to count users or processors.

Challenges with Oracle ESL Licenses

• Highly Restrictive: The limitations on usage and access can be restrictive for some applications.
• Support Responsibility: ISVs are solely responsible for providing technical support to their end customers.
• No Upgrades: ESL licenses cannot be upgraded to ASFU or Full Use licenses, limiting flexibility.

Case Study: Implementing Oracle ESL Licenses

ISV Perspective

Implementing Oracle ESL licenses as an ISV can significantly enhance your application offerings. However, it is crucial to:

• Understand Licensing Restrictions: Familiarize yourself with the limitations and ensure your application complies.
• Provide Robust Support: Establish a solid support system for your end customers, as they cannot contact Oracle directly.
• Plan for Audits: Be prepared for potential Oracle audits by maintaining thorough records and compliance documentation.

End Customer Perspective

For end customers, using an application with an embedded Oracle ESL license can be advantageous, but it’s important to:

• Understand Usage Restrictions: Be aware of the limitations of accessing and managing the Oracle database.
• Rely on ISV Support: Depend on the ISV for all technical support and maintenance needs.
• Comply with Licensing Terms: Ensure all usage complies with the terms set by the ISV and Oracle.

Steps to Obtain an Oracle ESL License

1. Join the Oracle Partner Network: Essential for qualifying for an ESL license.
2. Agree to Required Agreements: Sign the necessary agreements with Oracle.
3. Register Applications: Detail the specifics of each application package with Oracle.
4. Adhere to Licensing Restrictions: Ensure compliance with all usage and management restrictions.

Conclusion

The Oracle Embedded Software License (ESL) is a valuable licensing model for ISVs looking to embed Oracle technology into their applications. It offers significant cost savings and access to powerful Oracle software.

However, ISVS needs to understand the strict limitations and responsibilities associated with ESL licenses. Working with experienced Oracle licensing consultants can help navigate these complexities, ensure compliance, and optimize the use of Oracle ESL licenses.

By carefully selecting the right license model, thoroughly understanding usage restrictions, and maintaining clear agreements with Oracle, ISVs can maximize the benefits of Oracle ESL licenses while minimizing potential risks.