What is an Oracle ASFU License?

Oracle ASFU license is short for Oracle Application Specific Full use license. This is an Oracle ISV license model that can only be sold by Oracle ISV/OEM partners who have built solutions or applications that utilizes Oracle technology. Oracle Application Specific Full use license model can utilize all Oracle technology software, including Oracle database and Oracle middleware products such as WebLogic. The ISV purchases the license from Oracle and then resells the license to the end customer and the end customer will be listed as the owner of the ASFU licenses. Oracle has 2 different license models available for ISVs or partners who wants to use Oracle software in their solutions. The other very popular license model is the ESL-embedded license with a 90% discount.

Oracle ASFU License Terms

Below is a screenshot from an ASFU Oracle license terms  (Oracle Distribution agreement) you can find copies of this publically available:

Oracle ASFU licensing limitations

• Oracle Application Specific Full use license can only be used for the specific solution or application that is defined in the agreement, one common solution is SAP. SAP customers often have Oracle ASFU licenses, and those licenses cannot be utilized for any non SAP applications.
• The Oracle Application specific license is limited to a specific ISV/OEM application/solution.
• The ASFU license limitations are defined in a contract (APRF) between Oracle and the Oracle ISV that has entered into the Oracle agreement.
• You are allowed integrate non-Oracle Application Specific applications to the solution that are using Oracle ASFU licenses, but any connection to the Oracle software must be done via an ISV provided API. No direct links to the Oracle software and third-party software is allowed in the Application Specific Full use license model.

Oracle Application Specific Full use end customers can for a fee migrate/upgrade the  licenses to full use licenses and re-use the licenses for other applications.

Oracle ASFU technical limitations

• It is not allowed to store any third party data in the Oracle database.
• It is not permitted to build customized code or applications and use the Oracle database license.
• It is not permitted to let any third party programs run its business logic and or storage any data in the Oracle database.
• You can let non ASFU application – read data from the database using ODBC or similiar access methods.
• You cannot let a non Application Specific Full Use application write data directly to the database using ODBC or similiar.

Oracle ASFU vs Oracle Full use

• The App Specific Full use license is discounted at 60% from Oracle pricelist.
• App Specific FU end customer cannot contact Oracle technical support directly, 1^st line of contact is the ISV/OEM partner who in return should contact Oracle if the end customer needs technical support.
• Oracle technical support for App Spec FU is then 19% to the ISV – as Oracle expects the ISV to act as the first line of support.
• Oracle ASFU licenses does not always following standard Oracle licensing rules by counting named user plus users or processors. Oracle ASFU is occasionally using royalty license models Where the ISV can resell Oracle licenses and Oracle get a % from the ISV price list every time there is a sale. There is then no need to count processors or users.
• If you enter an Oracle Unlimited license agreement, you will need to migrate and include the ASFU licenses.

Oracle ASFU vs Oracle PAH, we see that for different sales compensation packages Oracle positions the incorrect license model to its ISV/partners. The main difference is that Oracle PAH licenses are to be used for many end customers. Application specific full use license model is for 1:1 companies. If you are an Oracle ISV its very important to understand the differences in license models to avoid costly license fees if Oracle audits your business.

Two Oracle ASFU license models

There are 2 different license models that the App Specific FU license is available under. The most common 95%+ is the standard Oracle license metric, named user plus and processor licenses. If you have that license model you need to license the Application Specific Full Use licenses the same way as you would for normal full use licenses but with the application package restrictions. The second ASFU Oracle license model, which is rare but exists in the royalty license model. In this model the ISV provices Oracle with its current price list and they agree on providing Oracle a % of all sales. In return the ISV can resell App Specific FU licenses without any consideration of the number of users and processors.

Oracle ASFU and Audits

• Oracle ASFU license deployments should not included in end customer Oracle license audits.
• Any audit of Oracle software for Application Specific Full Use must be done via the ISV/OEM partner who resold the license. (Oracle audits the Oracle ISV and not the end customer)
• The end customer is not liable towards Oracle for any non-compliance with the Oracle license.

Oracle ISV Audits

• Oracle has in the past few years been increasing the number of audits they are conducting on its ISVs.
• ISVs who have resold licenses to its customers, are often targetted in audits and if its customers are found to be non compliant the partner is liable to pay Oracle for unlicensed software.
• Oracle ISVs or end customers who (incorrectly) have purchased PAH or hosting licenses are a priority target for Oracle audit organization.

ASFU Oracle License – Pros and Cons

Oracle ASFU Pros

• The ISV receives a 63% discount on license purchase and can either share that margin with the end customer or make more margin on reselling Oracle.
• The Oracle App Specific FU license is not included in a normal software audit by Oracle. Any audit of the specific environment must be done by Oracle on the reselling partner/ISV.
• Non-compliance for the Application Specific full use license is paid by the ISV and not the end user. That means its good for the end user but can be a risk for the ISV.

Oracle Application Specific Full use – Cons

• It is restricted to usage for the application package. You cannot re-use the  license in for any other third party application.
• If you want to recycle the Oracle  database, you must pay an upgrade fee to full use.
• There is more work to make sure you are not compliant with the agreement if you perform integrations and customizations to the application page that uses the Oracle database storage.
• If the end customer needs technical support or updates, they cannot contact Oracle directly. Any contact with Oracle support must be done by calling the ISV who resold the license.

Expert Advice

If you are an Oracle ISV and are considering entering an App specific FU Oracle agreement, you should first determine which license model that fits your company and solution. Remember that you can have different license models for different solutions. One solution where you may have one  agreement, you can license with Named User Plus and Processor and if you have another solution that doesnt require you to use the same license model, you may preferr the royalty based model. It is also very wise to leave the APRF very vague, as you want to not box your into too many details describing your application package. In case you make smaller changes or upgrades you may want to avoid renegotiating the APRF agreement with Oracle. If you are an end customer and have an Application specific full use license, our expert advice is to make sure you understand who is liable if Oracle audits the ISV and indirectly you. If you have deployed the ISV environment in a way that is not according to the ASFU license terms, can the ISV claim you for the penalty fees? Oracle will not claim you for those fees, but it is important to have the responsibility clear between you and the reselling application vendor.

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Are you an ISV interested in signing an ASFU agreement with Oracle? Or end customer who wants help with Oracle  licensing?  We are independent Oracle licensing consultants who are helping companies globally with Oracle licensing and cloud challenges. Schedule an consultation to find out more about our services that are designed to help ISV who wants to negotiate ASFU Oracle license models but also end customers who needs support.