Oracle Embedded License – Oracle most limited license type

Introduction to Oracle Embedded License

This article provides an in-depth understanding of the Oracle ESL license, a highly restrictive license for independent software vendors (ISVs) embedding Oracle software in their applications.

The key takeaways include:

• Oracle ESL License: A highly restrictive license that can be packaged and resold by Oracle ISVs along with their application or solution.
• License Models: Two license models are available – standard Oracle licensing metrics with a 90% discount and a royalty-based model.
• Oracle ESL License Restrictions: Usage is restricted to the specific application package and cannot be used for third-party applications. The end user cannot directly access Oracle programs, patch, or upgrade the embedded database.
• Oracle License Management & Audit: Oracle ESL licenses are excluded from Oracle end-customer Oracle license audits. The ISV is allowed to access the Oracle embedded programs only for technical maintenance.

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?

An Oracle ESL (Embedded Software License) is a type of Oracle license that is highly restrictive and can be packaged and resold by Oracle ISVs along with their application or solution. To become eligible to resell Oracle ESL, the company developing and owning the IP embedding Oracle must become an Oracle Partner.

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 and 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.

There are two license models available for Oracle embedded license: standard Oracle licensing metrics, such as Named User Plus and Processor, where Oracle grants the ISV a 90% discount, and a royalty-based model, where 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

• Usage is restricted to the specific application package and cannot be used for third-party applications. The application package is described in the APRF, a contract item between the Oracle ISV and Oracle.
• The Oracle database must be installed as a component and run silently when installing the ISV application package. No configurations are allowed by the end user during the installation.
• The end user will own the license but cannot access Oracle programs directly. Oracle management, such as database management, must be done via the ISV application interface.
• The end user cannot patch or upgrade the embedded database or create users, tables, or database objects such as tables, indexes, or views.
• The ISV application interface must manage all administrative tasks, such as startup, shutdown, and backup.
• The database is not allowed direct access with any third-party application; the application package must have pre-made APIs to manage this.
  The end user cannot use third-party tools to access the Oracle database.
• You cannot use a SAM tool to manage an embedded license.
• If you enter an Oracle ULA, the ESL licenses will not be converted into the new support contract.
• The ISV is allowed to access the Oracle embedded programs only for technical maintenance.
• It is impossible to upgrade the embedded license to Oracle ASFU or Oracle Full use licenses.

Oracle Embedded License – APRF FORM

The below picture 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 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 is with the royalty-based license model, you move away from this licensing challenge.

FAQ on Oracle ESL License

Our Oracle ISV License Optimization Service

Our Oracle ISV License Optimization Service is designed to help Oracle ISVs achieve compliance and optimize partner agreements with Oracle. Here are some key benefits of the service:

• We can assist you in designing ESL (Embedded Software License) agreements at the lowest possible cost for your business, ensuring that you only pay for the licenses you need.
• Our team of experts can help you incorporate Oracle technology into your ISV agreement, providing you with the tools and resources necessary to meet Oracle’s licensing requirements.
• We offer best practices for managing ISV licensing, including advice on how to track license usage and ensure compliance with Oracle’s licensing policies.
• In the event of an ISV audit, we can provide ISV audit defense services to help you prepare for the audit and ensure that you can defend your licensing practices.

Our Oracle ISV License Optimization Service provides a comprehensive solution for Oracle ISVs who want to achieve compliance, optimize their partnership agreements with Oracle, and minimize the risk of license compliance issues. Contact us today.