Introduction to Oracle EBS Licensing Models
This article provides a detailed overview of Oracle EBS Licensing.
Here are the key points:
- Understanding Oracle EBS Licensing: Oracle EBS Licensing is a complex process that requires organizations to identify all individuals with authority to use the E-Business Suite programs, regardless of their active users. Many organizations overlook the need to actively manage their user population, including identifying new users who require access and removing users who no longer need it, such as those who have changed roles or left the organization.
- Oracle EBS Licensing Models Evolution: Oracle EBS licensing models have significantly changed. The article briefly overviews these changes, including the Concurrent User License, Professional User License, Component License, Custom Application Suite License, and Enterprise License.
- Common License Compliance Risks with Oracle EBS: The article highlights common compliance risks with Oracle EBS, such as not end-dating users after they leave your organization or no longer need access to EBS, assigning users to roles and responsibilities that you don’t have a license for, and not fully aware that some EBS application modules have minimum requirements.
- Oracle EBS Licensing Models
- Enterprise-Wide Licensing
- The Evolution of Oracle EBS Licensing Models
- Understanding Oracle EBS Licensing Metrics
- Concurrent Usage
- Professional User
- Component Application User
- Component Usage-Based License Metrics
- Custom Suite User
- Enterprise License Metrics
- Common License Compliance Risks with Oracle EBS
- FAQ on Oracle EBS Licensing
- How Redress Compliance Can Help With Oracle E-business suite licensing
Oracle EBS Licensing Models
Oracle EBS Licensing is a complex process that requires organizations to identify all individuals with authority to use the E-Business Suite programs, regardless of their active users.
Many organizations overlook the need to actively manage their user population, including identifying new users who require access and removing users who no longer need it, such as those who have changed roles or left the organization.
Even if an individual no longer uses the software, they must be licensed if they are authorized to do so.
To comply with Oracle’s licensing requirements, organizations should perform data cleanups on EBS instances and end-date individuals who no longer need to use the software.
It’s crucial to remember that every individual who is authorized to use the software on single or multiple servers must be licensed.
Oracle Enterprise software’s licensing model is based on “Enterprise metrics” determined by an organization’s size regarding factors such as the number of employees, revenue, or revenue under management.
These metrics do not depend on the number of users or systems where the Oracle software is installed. While this may seem straightforward, many companies encounter difficulties when fulfilling their annual reporting obligations.
To minimize the risk of non-compliance with Oracle policies and contractual rules, it is essential to clearly understand the Enterprise licensing model and address any related details or issues.
This will enable end-users to manage their software licenses and reduce noncompliance risk properly. Products licensed under the Oracle Enterprise model may include PeopleSoft, JD Edwards, Siebel, Hyperion, Agile, Demantra, and Oracle eBusiness Suite (EBS).
The Evolution of Oracle EBS Licensing Models
Oracle EBS licensing models have seen significant changes over the years. Here’s a brief overview of these changes:
- Concurrent User License: This model was based on the peak concurrent usage of all users accessing the system at a particular time. It benefited global companies with different shifts, as they only had to license based on peak concurrency.
- Professional User License: Introduced as Oracle released new product capabilities, this model was designed to grow Oracle’s install base with small and medium-sized companies. It required companies to maintain professional user licenses for at least 10% of the employee population and a combination of professional users and employee user licenses for at least 20%.
- Component License: This model broke apart the suite, requiring a separate license for each module a user accessed. It was a per-use license consumption model with distinct license metrics for each product.
- Custom Application Suite License: This model allowed customers to create their custom application suites, acting as a single license model. If users had access to any of the modules in the suite, they were counted as one usage.
- Enterprise License: This all-you-can-eat model was based on a company’s revenues and other factors, not actual usage. It had five licensing metrics for usage-based metrics and an enterprise employee metric.
Understanding Oracle EBS Licensing Metrics
The concurrent user is the maximum number of users accessing at any time. This metric focuses on the peak usage to measure license requirements rather than tracking individual access to the respective modules. It’s essential to actively manage this metric to avoid Oracle requiring migration to current license metrics that may be less favorable.
Introduced around 2000, the e-business suite professional user licensing model was maintained until March 2003. This model was designed for individuals authorized to use application programs installed on a single server or multiple servers, regardless of whether they actively use the programs. As the employee population grows, the minimums need to be maintained.
Component Application User
The component application user is authorized to use the applicable licensed programs installed on a single server or multiple servers, regardless of whether the individual is actively using the programs at any given time.
This metric is component-based, meaning it is licensed based on specific modules.
Component Usage-Based License Metrics
This metric applies to Oracle order management, where the license is based on the number of application users and electronic order lines entered from any source other than those documented by Oracle management order management users.
It’s crucial to measure both the access from an application perspective and the usage of order management functionality in APIs, interfaces, etc.
Custom Suite User
Oracle introduced the custom suite user licensing model to allow customers to create a custom bundle of modules to meet their needs.
This model is for companies standardizing on Oracle and having specific users requiring access to various modules within the Oracle e-business suite.
Enterprise License Metrics
The enterprise model has five licensing metrics: enterprise revenue, enterprise operating budget, cost of goods sold, freight under management, and enterprise employee metric.
These metrics allow for internal and external usage. Still, as the business grows, you will be obligated to uplift your license fees, even if your user population hasn’t grown.
Common License Compliance Risks with Oracle EBS
- Not end dating users after they leave your organization or no longer need access to EBS.
- Assigning users to roles and responsibilities that you don’t have a license for or assigning them by mistake.
- Some EBS modules have prerequisites, meaning if you license one product, you must purchase another regardless of use or requirements.
- Not fully aware that some EBS application modules have minimum requirements and that you can not have five users when you need a minimum of 100.
- Not licensing database and middleware products with full-use licenses because you have made customizations that trigger full-use licenses.
- You may have old EBS legacy metrics with definitions in the contract specifying how many users you need based on employee population or legal entities using EBS.
- You may not follow the restrictions about EBS read-only licenses.
FAQ on Oracle EBS Licensing
What is Oracle EBS Licensing?
Oracle EBS Licensing determines the licenses required to use the Oracle E-Business Suite (EBS) software. Two primary licensing models exist: Application User Licensing and Enterprise Wide Licensing. Application User Licensing requires organizations to identify all individuals with permission to use the EBS programs. At the same time, Enterprise Wide Licensing is based on an organization’s size regarding factors such as the number of employees or revenue.
What are the common compliance risks associated with EBS licensing?
Some of the most common compliance risks include failing to end-date users who no longer require access to the software, mistakenly granting access to EBS modules that an organization is not licensed for, and failing to license pre-requisite products properly.
How can organizations review their EBS licensing to ensure compliance?
Organizations can review their EBS licensing by performing regular data cleanups of their EBS instances and end-dating individuals who no longer need to use the software. They can also optimize their software licensing by using responsibilities and logical groups within the software that allows users to access different functions, data, and windows. Additionally, organizations can work with an EBS licensing expert to review user names and determine which licenses are required.
What are some tips for avoiding non-compliance with EBS licensing?
To avoid non-compliance with EBS licensing, it is important to clearly understand the licensing model being used and to actively manage the user population by identifying new users who need access and removing users who no longer require it. It is also important to properly license pre-requisite products and to work with an EBS licensing expert to ensure compliance.
What is the importance of data cleanups in EBS licensing?
Data cleanups are important in EBS licensing because they help organizations identify users who no longer require access to the software and end-date them. Even if users no longer actively use the software, they may still be authorized to do so and therefore require a license. By performing data cleanups, organizations can ensure that they are not paying for unnecessary licenses and can avoid non-compliance with Oracle policies and contractual rules.
What are some tips for managing EBS licenses effectively?
To manage EBS licenses effectively, organizations should regularly review their license agreements and stay up-to-date on any changes to licensing policies or models. They should also document their licensing agreements and keep track of license keys and usage metrics. Additionally, organizations should work with an EBS licensing expert to ensure compliance and optimize their software licensing.
What are the different types of EBS licenses?
What is end-dating in EBS licensing?
End-dating is deactivating user accounts in EBS for individuals who no longer require access to the software. This is important for compliance with Oracle licensing policies, as organizations must license every authorized individual to use the software on single or multiple servers. End-dating users who no longer require access can help organizations avoid paying for unnecessary licenses and reduce the risk of non-compliance.
What is a pre-requisite license in EBS licensing?
A pre-requisite license is a license that is required to use a specific EBS module or product. For example, suppose an organization uses sourcing in EBS. In that case, they must also license Purchasing. Failing to license pre-requisite products properly can lead to non-compliance with Oracle policies and contractual rules.
How to audit Oracle EBS Licensing?
We recommend using the Oracle LMS Collection Tool, Oracle’s audit method. Firms like Redress Compliance have the expertise to analyze the outputs from those scripts.
What is an Oracle EBS Bundle?
Oracle EBS Bundle is a Custom Application Suite where you add different EBS modules into a customized license based on the end customer’s requirements. The customer then receives a “unique” license name.
How Redress Compliance Can Help With Oracle E-business suite licensing
Our EBS license review includes the following:
- A comprehensive review of your EBS licenses to ensure compliance with Oracle’s licensing policies and agreements.
- Use Oracle license compliance scripts to analyze and validate your EBS license usage data, ensuring you accurately report the required licenses.
- Contract analysis of your entitlement to identify discrepancies between your license agreements and your actual use, ensuring that you only pay for what you need and avoid unnecessary expenses.
- License optimization recommendations to help you reduce your licensing costs while maintaining compliance with Oracle’s policies and agreements.
- A detailed report summarizing the findings of the license review, including any areas of noncompliance or potential cost savings opportunities.
- Consultation with our licensing experts to discuss the information and provide guidance on addressing any identified issues.
Contact us Today to get help with Oracle EBS Licensing!