Oracle Licensing

Oracle ASFU License Model – Learn About The Limitations

What is an Oracle ASFU License?

  • What is it? The Oracle ASFU (Application Specific Full Use) license is a resellable model for Oracle OEM partners.
  • How can it be used? ASFU licenses are specifically designed to be used with third-party applications.
  • What’s the cost? Oracle offers heavy discounts on the ASFU license model. (60%+)
  • Need Oracle Technical Support? You must use the Independent Software Vendor (ISV) for Oracle support.
  • What about audits? With the ASFU license model, end customers are not liable for Oracle audits related to license compliance.

With over ten years of experience working for Oracle, including time spent in the Oracle auditing department and in Oracle ISV organizations, we have become experts in Oracle ISV and OEM license models and contracts.

What is an Oracle ASFU License?

What is an Oracle ASFU License

The Oracle ASFU license, short for Oracle Application Specific Full Use license, is a unique model designed for Oracle ISV/OEM partners. These partners have developed solutions or applications that leverage Oracle technology.

Key points to note about the Oracle ASFU license:

  • Usage: The ASFU license model can utilize all Oracle technology software, including the Oracle database and Oracle middleware products like WebLogic.
  • Reselling: The ISV purchases the license from Oracle and then resells it to the end customer, who is listed as the ASFU license owner.

Oracle ASFU License Terms

Below is a screenshot of the ASFU Oracle license terms  (Oracle Distribution agreement). You can find copies of this publically available:

oracle asfu license terms

Oracle ASFU licenses come with specific terms and conditions that limit how they can be used:

  • Specific Use: The ASFU license can only be used with the specific software solution or application defined in the agreement. For instance, if an ISV builds an application that uses the Oracle Database, the license only allows that application to use the Oracle database.
  • Integration Limitations: Oracle ASFU licenses can be used to integrate with non-Oracle applications. However, the connection must be made through an API provided by the ISV.
  • Contractual Boundaries: Terms are clearly defined in a contract between Oracle and the ISV. The license is strictly limited to the ISV/OEM application for which it was acquired.

Example: Many SAP users use Oracle databases under ASFU licenses. These databases are strictly used for SAP operations, meaning they can’t be repurposed for other applications. Can migrate/upgrade their licenses to full-use and reuse them for other applications.

Oracle ASFU Technical Limitations

oracle asfu

ASFU licenses come with specific technical restrictions:

  • Third-Party Data: Storing third-party data in the Oracle database is not allowed.
  • Customized Code: Creating custom applications using Oracle Database with ASFU licenses is prohibited.
  • Application Access: Non-ASFU applications may read data from the database but cannot write data to it unless using the defined methods like ODBC.

These limitations ensure that the Oracle database remains strictly tied to the original purpose as intended by the ISV.

Oracle ASFU vs Oracle Full Use

Oracle ASFU vs Oracle Full Use

It is important to understand the distinctions between ASFU licenses and Full Use licenses:

FeatureOracle ASFUOracle Full Use
DiscountSignificant discount (60% or more)Standard Oracle pricing
Technical SupportVia ISV partnerDirect from Oracle
Usage ScopeSpecific application onlyAny application without restriction
Audit LiabilityISV is liable for auditsCustomer is liable for audits

Oracle PAH vs ASFU: Oracle PAH licenses are intended for shared usage across multiple customers, whereas ASFU licenses are for a 1:1 relationship between ISV and the end customer. Understanding these differences can save costs during Oracle audits.

Two Oracle ASFU License Models

There are two distinct models under the ASFU licensing scheme:

  1. Standard License Model
    • User Plus or Processor: The ISV must license users or processors, similar to Oracle’s full-use license, but restricted to specific application packages.
  2. Royalty-Based Model
    • Royalty Agreement: Instead of licensing individual users or processors, the ISV provides Oracle with a price list and pays a royalty on a percentage of sales. This allows the ISV to resell ASFU licenses without tracking individual users or processors.

Example: Under the royalty model, if an ISV sells licenses worth $100,000, they may need to pay Oracle a fixed percentage of this as a royalty.

Oracle ASFU and Audits

Oracle ASFU and Audits

ASFU licenses have specific auditing procedures that differ from regular Oracle licenses:

  • No Customer Audits: End customers are not liable for Oracle audits related to ASFU licenses. Instead, the ISV is responsible.
  • ISV Audits: Oracle can audit ISVs who resell ASFU licenses. If the ISV’s customers are non-compliant, the ISV bears the penalty.

Pro Tip: This can be a major advantage for end customers, as they do not have to deal directly with Oracle during an audit.

Oracle ASFU Pros and Cons

Oracle ASFU Pros and Cons

Pros

  • Cost Savings: Significant discounts (up to 63%) compared to full-use Oracle licenses.
  • No Direct Audit Pressure: Oracle does not directly audit the end customer.
  • ISV First-Line Support: Customers get support through the ISV, which can be beneficial if the ISV provides more tailored help.

Cons

  • Restricted Usage: The license is tied to specific application packages. No flexibility to use it for different purposes.
  • Indirect Technical Support: End customers must seek support from the ISV, which can be slower than direct Oracle support.
  • Customization Restrictions: Building custom code using Oracle technologies is prohibited, limiting flexibility.

Example: If an end customer has an Oracle ASFU license for an accounting software solution, they cannot later decide to use the Oracle database for a marketing application without upgrading the license.

Expert Advice on Oracle Application-Specific Full-Use License

For ISVs

  • License Model Selection: Choose the appropriate model for your business. If your customers require flexibility, the royalty model might work better as it reduces the need to count users or processors.
  • Broad APRF Agreements: When entering into an Application Package Resale Full Use (APRF) agreement, keep the contract details broad to accommodate any future product changes or upgrades without renegotiation.

For End Customers

  • Understand Audit Liability: Although Oracle does not directly audit you, understand your indirect liability through the ISV.
  • Clear Contracts: Ensure there are explicit terms between you and the ISV regarding support, upgrades, and potential audit penalties.

FAQs on Oracle ASFU License

What is an Oracle ASFU License?

Oracle ASFU license is an Oracle ISV license model that allows the sale of solutions or applications utilizing Oracle technology. It can only be sold by Oracle ISV/OEM partners who have built such solutions or applications.

What does ASFU stand for?

ASFU stands for Oracle Application Specific Full use license.

What products can be utilized under ASFU license model?

The ASFU license model can utilize all Oracle technology software, including Oracle database and middleware products like WebLogic.

Who purchases the ASFU license from Oracle?

The ISV/OEM partner purchases the license from Oracle and then resells the license to the end customer.

What are the limitations of Oracle ASFU licensing?

The limitations of Oracle ASFU licensing are defined in a contract (APRF) between Oracle and the Oracle ISV that has entered into the Oracle agreement.

The application-specific full-use license model does not allow direct links to Oracle and third-party software.

Can an end customer migrate/upgrade the ASFU license for other applications?

Yes, an end customer can migrate/upgrade the ASFU licenses to full-use licenses for a fee and re-use the licenses for other applications.

What is the difference between ASFU and ESL-embedded license models?

The ASFU license model is specifically designed for Oracle ISV/OEM partners who have built solutions or applications that utilize Oracle technology. In contrast, the ESL-embedded license model provides a 90% discount for ISVs or partners who want to use Oracle software in their solutions.

What is the cost of Oracle technical support for App Spec FU?

Oracle technical support for App Spec FU is charged at 19% to the ISV, as Oracle expects the ISV to act as the first line of support.

Are ASFU licenses always counted using the named user plus or processors model?

No, Oracle ASFU licenses do not always follow standard Oracle licensing rules by counting named users, users, or processors.

Sometimes, royalty license models are used. In these models, the ISV can resell Oracle licenses, and Oracle receives a percentage from the ISV price list every time a sale is made. In this case, processors or users are not counted.

What is the difference between Oracle ASFU and Oracle PAH licenses?

The main difference between Oracle ASFU and Oracle PAH licenses is that Oracle PAH licenses are to be used for many end customers, while the Application Specific Full use license model is for 1:1 companies.

Are Oracle ASFU license deployments included in end-customer Oracle license audits?

Oracle ASFU license deployments should not be included in end-customer Oracle license audits.

The ISV/OEM partner who resold the license must conduct any audit of Oracle software for application-specific full use.

What are the pros and cons of an Oracle ASFU license?

The pros of an Oracle ASFU license include a 63% discount on license purchase, not being included in a typical software audit by Oracle, and non-compliance paid by the ISV and not the end-user. The cons include usage restrictions, full-use upgrade fees, and limited technical support.

What is the Oracle ASFU License Price?

The ISV determines it, however the discounts that the ISV receives are usually above 50%.

What is Oracle ISV?

An Oracle ISV (Independent Software Vendor) develops and sells software that runs or integrates with Oracle’s platforms.

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Author
  • Fredrik Filipsson has 20 years of experience in Oracle license management, including nine years working at Oracle and 11 years as a consultant, assisting major global clients with complex Oracle licensing issues. Before his work in Oracle licensing, he gained valuable expertise in IBM, SAP, and Salesforce licensing through his time at IBM. In addition, Fredrik has played a leading role in AI initiatives and is a successful entrepreneur, co-founding Redress Compliance and several other companies.

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