Oracle licensing

Oracle Embedded License – Oracle’s most limited license type

The Oracle ESL (Embedded Software License) is:

  • A highly restrictive license for Independent Software Vendors (ISVs) embedding Oracle software in their applications.
  • ISVs can package and resell the license with their solutions or applications.
  • Usage is strictly limited to the specific application package and prohibits direct user access to Oracle programs.
  • Offers two license models: standard Oracle licensing metrics with a 90% discount or a royalty-based model.
  • Oracle ESL licenses are excluded from Oracle end-customer audits, focusing on the ISV instead.

Oracle Corporation offers Oracle ESL licenses for independent software vendors (ISVs) who embed Oracle software components in their applications.

As an ex-Oracle employee who used to work with ISV licensing,

I have gained significant knowledge and experience in licensing, requirements, and best practices.

In this article, I will share my expertise to help readers understand Oracle ESL licensing and how to navigate the licensing process effectively.

What is an Oracle Embedded License?

oracle embedded license

An Oracle ESL (Embedded Software License) is a highly restrictive type of Oracle license that can be packaged and resold by Oracle ISVs along with their application or solution.

The company developing and owning the IP embedding Oracle must become an Oracle Partner to become eligible to resell Oracle ESL.

The most common embedded product is the Oracle database and database options. Oracle provides the ISV with a 90% discount from the Oracle technology price list, which reflects the restrictive nature of the Oracle ESL license model.

A notable difference between Oracle ESL, Oracle Full Use, and Oracle ASFU is that there is no requirement to maintain Oracle technical support for Oracle ESL licenses.

Most Oracle ISVs do not maintain technical support for embedded licenses. Oracle ISVs who resell the ESL license cannot list the Oracle database as a separate component on their price list or contract.

Two license models are available for Oracle embedded license: standard Oracle licensing metrics, such as Named User Plus and Processor.

Oracle grants the ISV a 90% discount and a royalty-based model. In this model, Oracle takes a percentage (usually 10%) from the ISV’s price list, and the ISV does not need to count users or processors.

Which products can be sold/used with an embedded license?

  • Oracle Database
  • Oracle Middleware, such as Weblogic Server.
  • Oracle Java

Oracle ESL license restrictions

Oracle ESL license restrictions
  • Restricted Usage: The Oracle ESL license is limited to the application described in the APRF agreement between Oracle and the ISV. It can’t be used with other third-party applications.
  • Installation Requirements: The Oracle database must be installed as part of the ISV application and should run without user configuration.
  • End User License Ownership: Although the end user owns the license, they can’t directly access or manage Oracle programs. All management must be done through the ISV’s application interface.
  • No Modifications Allowed: End users can’t patch, upgrade, or make changes like creating users or database objects in the embedded Oracle database.
  • Administrative Control: The ISV application manages all database administrative tasks, including startup, shutdown, and backups.
  • Exclusivity of Access: Any third-party application or tool may not directly access the database. The ISV application must provide the necessary APIs for management.
  • SAM Tool Usage: Usage of SAM tools for managing the embedded license is not allowed.
  • No Conversion in ULA: ESL licenses won’t convert into the new support contract if you enter an Oracle ULA.
  • ISV Access for Maintenance: The ISV can access Oracle-embedded programs only for technical maintenance.
  • No Upgrade Path: Upgrading the embedded license to Oracle ASFU or full-use licenses is impossible.

Oracle Embedded License – APRF FORM

The picture below is part of the standard embedded license agreement that a company signs with Oracle when they want to have the rights to distribute Oracle software along with their software package.

For end customers, it has little value as they are not responsible for license compliance for the ESL deployment towards Oracle.

But for ISVs entering embedded licensing agreements, we recommend that you do not provide too many details, as you want to intentionally leave it vague to allow flexibility in changes to your application package.

If you make minor updates, you may not want to re-negotiate your licensing agreement every time.

Oracle ESL license

Oracle license management & license audit

  • Oracle ESL licenses are excluded from Oracle end-customer Oracle license audits.
  • Oracle ESL is only audited if Oracle decides to audit the Oracle ISV who resold the ESL license.
  • Oracle end customers are not liable for license compliance for Oracle ESL licenses.
  • If you are using a Software asset management tool, you are not allowed to manage Oracle-embedded programs.
  • Oracle-embedded licensing is bound by Oracle rules around virtualization, such as VMWare; however, if your license uses the royalty-based license model, you move away from this licensing challenge.

FAQ on Oracle ESL License

Is Oracle ESL licenses part of Oracle end customer audits?

No, Oracle has no contractual right to audit any ESL or embedded licenses. The contractual right to audit those deployments is via the ISV, which embedded Oracle technology into their solution.

Which license models are available for ISVs under the ESL model?

Your license with standard metrics, named user plus, or processor and receive 90% off the Oracle price list.

Alternatively, you agree on a royalty license model where you can license Oracle products the same way you license your solution. Oracle agrees after negotiating to take a % of your price list.

Can end customers call Oracle support for ESL installations?

No, all support requests must go via the ISV / application vendor.

Can the ISV application package be used for third-party applications?

No, usage is restricted to the application package described in the APRF, a contract item between Oracle ISV and Oracle.

How must the Oracle database be installed when installing the ISV application package?

The Oracle database must be installed as a component and run in silent mode. No configurations are allowed by the end user during the installation.

Is the end-user allowed to directly access Oracle programs?

No Oracle management, such as database management, must be done via the ISV application interface.

Who manages administrative tasks such as startup, shutdown, and backup?

The end-user cannot patch or upgrade the embedded database or create users, tables, or database objects such as tables, indexes, or views.

Can the Oracle database have direct access to any third-party application?

No, the application package must have pre-made APIs to manage third-party access.

Can a SAM tool be used to manage an embedded license?

No, a SAM tool cannot manage an embedded license.

Can ESL licenses be converted into full-use licenses?

No, they cannot.

When is the ISV allowed to access the Oracle embedded programs?

The ISV is allowed to access the Oracle embedded programs only for technical maintenance.

How much does an Oracle embedded license cost?

The ISV who buys the license from Oracle receives a 90% discount if using named user plus, royalty-based licensing Oracle takes a % of the ISV price list.

What is Oracle Embedded license?

An Oracle embedded license is an OEM license that Oracle solution partners can resell with their application/solution. It can only be used for a specific application or solution and is very limited in how it can be used compared to a full-use license.

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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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