Oracle EBS

5 Oracle EBS licensing models – How to audit EBS in 2024

Oracle EBS (Enterprise Business Suite) is licensed as follows:

  1. Identification of Authorized Users: Organizations must identify all individuals authorized to use EBS programs, regardless of actual usage​​.
  2. Evolved Licensing Models: Includes Concurrent User License, Professional User License, Component License, Custom Application Suite License, and Enterprise License​​.
  3. Enterprise Metrics-Based Licensing: The licensing is determined by an organization’s size, considering factors like the number of employees and revenue

Oracle EBS Licensing Models

Oracle EBS Licensing Models

Managing Authorized Users

  • Oracle EBS licensing necessitates identifying all individuals authorized to use E-Business Suite programs, active or not.
  • Organizations must regularly update user access, adding new users and removing those who no longer need access.
  • Licensing is required for any individual authorized to use the software, irrespective of actual usage.
  • Regular data cleanups and end-dating individuals who do not need software access are vital for compliance.

Enterprise-Wide Licensing

  • Based on “Enterprise metrics” related to an organization’s size, including employee count and revenue.
  • Independent of user numbers or installation systems.
  • Annual reporting is critical to avoid non-compliance.
  • Understanding this model is key for managing licenses and minimizing risks.
  • Applies to Oracle products like PeopleSoft, JD Edwards, Siebel, and more.

Multiple legacy licensing metrics, including Concurrent Licenses and Professional users, are no longer sold.

The Evolution of Oracle EBS Licensing Models

oracle ebs licensing

Oracle EBS licensing models have seen significant changes over the years. Here’s a brief overview of these changes:

  1. 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.
  2. 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%.
  3. 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.
  4. 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.
  5. 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

oracle ebs licensing metrics

Concurrent Usage

  • Measures peak usage of users accessing the system at any time.
  • Managing this metric is vital to prevent unfavorable migrations to current license metrics.

Professional User

  • Active from 2000 to March 2003.
  • Applied to individuals authorized to use applications on single or multiple servers.

Component Application User

  • Authorized for specific licensed programs on any server.
  • Component-based metric tailored to individual modules.

Component Usage-Based License Metrics

  • Relevant to Oracle order management.
  • The license is based on application users and electronic order lines, excluding certain Oracle-managed sources.

Custom Suite User

  • Allows custom module bundling for specific company needs.
  • Designed for companies standardizing on Oracle with diverse module requirements.

Enterprise License Metrics

  • Five metrics: enterprise revenue, operating budget, cost of goods sold, freight under management, and enterprise employee metric.
  • Permits internal and external usage.

Common License Compliance Risks with Oracle EBS

oracle ebs compliance risks
  • 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 approve 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 allow 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 essential 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 essential 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 necessary for 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?

Several types of EBS licenses exist, including Application User, Employee User, and Enterprise-Wide licenses. Legacy licensing metrics, such as Concurrent and Professional User licenses, are no longer sold.

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

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Author

  • Fredrik Filipsson

    Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, enhancing organizational efficiency.

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