JD Edwards licensing works as follows:
- Named User License: Specific individual users are licensed.
- Concurrent User License: Based on the number of users accessing the software simultaneously.
- Processor License: Based on the number of processors used by servers where the software is installed.
- Enterprise License: A broader licensing option covering larger organizational needs.
- Metered License: Usage-based licensing, typically involving measurement of specific usage metrics
Oracle JD Edwards on-premise licensing is built around perpetual use rights with annual support, utilizing metrics such as Application User licenses, Custom Application Suite (CAS) bundles, and enterprise-wide metrics.
Understanding the cost structure and risks associated with each license model requires obtaining the best value.
To avoid unbudgeted fees, CIOs and IT leaders should regularly audit their JD Edwards usage, negotiate favorable terms (such as caps on support uplift), and ensure compliance with Oracle’s strict audit clause provisions.
JD Edwards On-Premise Licensing Basics
JD Edwards EnterpriseOne (on-premise) is typically sold as a perpetual license – a one-time fee per user or metric granting indefinite usage rights.
After licensing, customers pay annual support fees (about 22% of the license price) for updates and support.
For example, a module costing $100,000 in licenses would incur roughly $22,000 per year in support. Oracle also offers term licenses (time-limited usage for ~20% of the annual perpetual cost).
Still, most enterprises choose perpetual licenses with ongoing support to run on-premises JD Edwards systems in the long term.
In on-prem deployments, you license JD Edwards by counting users and/or business metrics rather than server CPUs. Everyone accessing JD Edwards needs a license under one of Oracle’s defined metrics.
Common JD Edwards license types include Application User (named user), Concurrent User (legacy), Custom Application Suite (CAS), and Enterprise metrics (company-wide measures).
Understanding these models is crucial before negotiating your contract, since each model affects cost, flexibility, and compliance tracking differently.
Below, we discuss the major JD Edwards license models and their implications.
Read Preparing for an Oracle JD Edwards License Audit: A CIO’s Compliance Guide.
Application User Licensing Model
The Application User license (Named User) is the most common JD Edwards metric.
Each named individual using the JD Edwards system requires an Application User license for each module or bundle they access.
In practical terms, if you have 50 employees needing the Financials module, you must buy 50 Financials Application User licenses.
Licenses are tied to the user’s name (not concurrent sharing), so even infrequent users count toward the total if they have an active login.
It’s important to ensure the number of active user IDs never exceeds the purchased licenses. If 55 people use the system but only have 50 licenses, you’re out of compliance.
Application User licensing is straightforward and best suited for environments where each user needs full access to specific modules.
It gives clarity (one license per person per module) and is easy to track via user lists. However, costs scale linearly with user count, which can become expensive as your organization grows.
For example, Oracle’s price list shows core JD Edwards modules, such as Financial Management or Manufacturing, at around $4,595 per Application User license (list price), so 100 module users would cost $459,500 plus 22% annual support.
Every additional user adds an incremental cost.
The organization must also carefully manage user access, disabling accounts that no longer need access, to avoid “shelfware” (paying for support on unused licenses).
Historical note: Oracle no longer sells new JD Edwards licenses by concurrent user, but some older agreements still include concurrent user metrics.
A concurrent user license allows a pool of users to share a limited number of simultaneous sessions (e.g., 100 concurrent users might cover 150 named people if only 100 are ever online at once).
This model can save money in shift-based workplaces, but it requires strict monitoring of peak usage.
If your contract has legacy concurrent user rights, be mindful that exceeding the concurrent count (even briefly) violates compliance.
Oracle expects named Application User licensing in new deals, so most customers moving forward will use the named user model.
Custom Application Suite (CAS) Licensing
Oracle’s Custom Application Suite (CAS) licensing allows customers to bundle multiple JD Edwards modules into a single custom suite, licensed per user.
Instead of buying separate licenses for Financials, Inventory, Manufacturing, etc., you negotiate one combined license that entitles a set number of users to use all modules in the bundle.
These users are typically referred to as “Custom Suite Users.”
For example, an enterprise might license 100 CAS users for a bundle that includes Financials, Procurement, and Inventory modules, granting those 100 people access to all included functions under a single license umbrella.
If you need many modules for the same user population, the CAS bundle approach can simplify administration and reduce costs.
Oracle often provides a bulk discount when packaging modules in a CAS deal (versus buying each component a la carte).
It also means you only track one user count across the suite, rather than ensuring compliance module by module.
However, CAS licenses require careful scoping:
- Not every JD Edwards module may be eligible for a CAS bundle (some highly specialized products might still need separate licensing).
- You pay for broad access even if some users don’t utilize every module. If 100 CAS users are licensed for a bundle but only 60 use the Manufacturing module, you’re still paying for 100 users for that module in the bundle. This can lead to over-licensing if not tailored to actual needs.
When considering CAS, analyze the overlap of users across modules.
CAS shines when the same users require multiple modules (e.g., an operations team that needs Finance, Supply Chain, and Manufacturing enabled for each person).
It is less cost-effective if your user groups for different modules hardly overlap. In those cases, separate Application User licenses targeted to each group could be more cost-effective.
The Oracle audit clause will still treat each CAS user as a named user, so keep the total CAS user count compliant with regular user licenses.
Enterprise Metric Licensing
Some JD Edwards products can be licensed on an Enterprise metric instead of per-user.
This model allows unlimited users, with fees based on a business size metric, such as the number of employees, annual revenue, or Cost of Goods Sold.
Essentially, you pay for the scale of the organization rather than individual users.
For instance, Oracle’s price list shows the Human Resources module is priced at $125 per “Employee” (meaning all employees are counted) rather than per user.
If you have 5,000 employees, an enterprise metric license for JD Edwards HR would cost $625,000 (plus 22% support yearly) for 5,000 employees.
In return, any number of HR users or transactions are allowed, as the license covers the entire enterprise.
Enterprise metrics are ideal for functions that involve the entire company or large populations (such as HR, payroll, and self-service portals), or when user counts are difficult to track.
They also future-proof licensing against user growth – you don’t need to buy more user licenses as headcount or revenue increases, until you cross into a new metric tier. However, there are important considerations:
- The defined metric must be diligently tracked. For an employee metric, Oracle broadly defines “Employee” (including full-time, part-time, contractors with access, etc.). If your employee count grows beyond what you licensed, you must inform Oracle and purchase additional licenses (often sold in predefined increments). Similarly, a revenue-based license (e.g., $M in Revenue) would require a true-up if corporate revenues rise above the licensed amount.
- Enterprise licenses can carry steep expansion fees. Oracle’s terms often require buying incremental blocks at full price when you exceed the original metric. For example, if you licensed up to $500M in revenue and your company grows to $600M, you might have to purchase an extra block (say 100 × $1M revenue units) to cover the overage, possibly at list price.
Despite these risks, enterprise metrics can simplify compliance since you won’t need to track individual user counts for that module.
Just be aware of your growth. An Oracle audit will review your current metrics (headcount, revenue, etc.) against what’s licensed.
If you exceed it, the audit risk is similar to user overage: you’ll be asked to purchase the additional amount retroactively.
Enterprise licensing offers flexibility for stable or predictable environments.
For rapidly growing businesses, consider building expansion costs into your long-term IT budget.
Comparison of JD Edwards License Models: The table below illustrates how the models differ in structure and cost:
| License Model | Metric Basis | Usage Scope | Example Cost Scenario |
|---|---|---|---|
| Application User | Named user per module | Only licensed users can access that module. Need license per user per module. | 100 Financials users × $4,595 each = $459,500 one-time license (plus $101k/yr support). If users increase, cost grows linearly. |
| CAS Bundle | Named user for a suite of modules | Each CAS user can access all modules in the custom bundle. | 100 CAS users for Financials+Inventory bundle = negotiated package (e.g. $X total). Often discounted vs buying modules separately, but all 100 pay for all modules. |
| Enterprise Metric | Entire organization size (e.g. all employees, revenue) | Unlimited users/usage for that product across org within metric limits. | HR module at $125 per Employee: 5,000 employees = $625,000 license (covers all HR users). Must true-up if employees exceed 5,000. |
Note: All costs listed above are Oracle list prices for illustration purposes. Enterprises usually negotiate discounts off the list.
However, Oracle may calculate your annual support uplift based on the original list price or the discounted net. Please clarify this during negotiation.
Additionally, if an audit reveals unlicensed use, Oracle can charge the full list price for those licenses, plus backdated support fees, effectively nullifying any discounts you may have received.
Audit and Compliance Risks in JD Edwards Licensing
Managing JD Edwards licenses isn’t just about budgeting but also compliance.
Oracle’s contracts include a rigorous audit clause giving Oracle the right to audit your usage with 45 days’ notice.
In practice, an Oracle License Management Services (LMS) audit will require you to report on user counts and modules in use and possibly run Oracle scripts to capture actual usage data. Non-compliance can result in hefty, unplanned costs.
Key risk areas and best practices include:
- Excess Users or Metrics: If your active user count exceeds the number of purchased licenses (or your employees/revenue exceed an enterprise metric), you are out of compliance. Oracle will require you to purchase additional licenses at the listed price to cover the difference, which may also include backdated support fees for the unlicensed period. If usage drifts upward, this can result in a surprise bill in the millions. Proactively monitor the number of JD Edwards users and compare it to their entitlements on a regular basis.
- Unlicensed Modules: JD Edwards systems sometimes enable additional modules in the software you haven’t formally licensed. During audits, Oracle can inspect which modules have been accessed. For example, if a user inadvertently accesses the Advanced Pricing module but it hasn’t been licensed for that user count, that’s a compliance gap. Lock down and disable any modules you didn’t purchase. Oracle auditors will check your module usage logs.
- CAS and Bundle Pitfalls: With CAS bundles, ensure you do not exceed the total licensed CAS user count. Adding more users to the system than your CAS license covers is a violation, even if they only use one of the bundled modules. Similarly, for enterprise metrics like employees, track changes – a merger or hiring spree could silently put you over your licensed metric. In many contracts, Oracle’s audit clause requires you to self-report such changes (and purchase more licenses accordingly).
- Inactive or Generic Accounts: Every named user ID counts as a licensed user, even if they use the system minimally. Generic accounts (e.g., a shared login) are generally not permitted and can lead to compliance issues, as one login may represent multiple individuals. It’s best practice to purge or deactivate unused accounts and ensure each user login is tied to a valid license. During an audit, Oracle may request a user list and compare it to your licensed quantities.
- Limited Use or Legacy Licenses: If you have any limited-use licenses (for example, JD Edwards used under special terms or older agreements), ensure you honor those restrictions. Using a restricted license beyond its scope (e.g., a “Self-Service” user license being used for full functionality) will be flagged in an audit. Oracle’s audit teams are trained to find any such variance.
Read Oracle JD Edwards Licensing Explained: User Types, Metrics, and Common Pitfalls.
Support and Maintenance Costs
When budgeting for JD Edwards, license fees are only part of the equation. Oracle’s annual support and maintenance fee (typically 22% of your net license fees) is a significant ongoing cost.
This support provides you with access to patches, upgrades, and technical assistance. Oracle has committed to providing Premier Support for JD Edwards EnterpriseOne for on-prem customers through at least 2036.
A few key considerations for support:
- Support Uplift: Oracle usually increases support fees by a yearly standard uplift. Historically, this annual support uplift is about 3–4%, meaning your support bill grows slightly every year, even if you don’t buy new licenses. In recent years, some customers have seen higher increases (5–8%) depending on Oracle’s policies. Always budget for these uplifts. It’s possible to negotiate a cap or freeze on support increases – large customers, especially during new deals or renewals, have secured multi-year support price freezes. If cost predictability is important, raise this issue during contract negotiations.
- Repricing and License Terminations: If you drop certain JD Edwards modules or reduce licenses to save on support, be careful. Oracle’s support policies include a repricing clause: when you terminate support on part of your licenses, Oracle will likely reprice the remaining support at current list prices, eroding the expected savings. In short, you often cannot proportionally scale down support costs – Oracle ensures a minimum spend. For example, if you had 100 user licenses and drop 50, you won’t simply cut the support bill in half; Oracle may reprice the support on the remaining 50 at a higher unit rate so that you save little or nothing. Plan any support termination moves with this in mind, and obtain quotes from Oracle on the post-termination support cost (“repriced support”) before making a decision.
- Third-Party Support Options: Some JD Edwards customers explore third-party support vendors (like Rimini Street) to reduce costs by half or more. Third-party support can be a viable way to avoid Oracle’s high fees and uplift cycle if you run a stable JD Edwards instance and don’t need new Oracle patches. The trade-off is that you forgo Oracle’s official updates and possibly the right to upgrade to newer versions. This path also typically requires your JD Edwards system to be out of Oracle’s active support window (or you accept running without Oracle’s backing). If cost savings are critical and your on-premise JD Edwards is mature, third-party support is an option to evaluate, but weigh the loss of Oracle-provided upgrades.
- Maximize Value from Support: If you stay on Oracle support (as most do), make the most of it. Ensure you download updates, leverage Oracle’s knowledge base, and use the support services you’re paying for. Oracle will continue delivering enhancements to JD Edwards (though the product is mature), especially in Tools releases. Your annual 22% fee should be treated as an investment – use those support resources to troubleshoot issues and keep your system on a supported, secure version.
In negotiations, remember that while Oracle rarely discounts the support percentage, it sometimes grants credit or delays first-year support billing as part of a deal.
Additionally, if you make a significant new purchase, you may be eligible for a support uplift waiver for a year or two.
For instance, some customers negotiating a major JD Edwards expansion secured an agreement from Oracle to forgo support uplift for three years, effectively freezing maintenance costs. Always ask—the worst Oracle can say is no.
Read our JD Edwards Licensing FAQ.
Recommendations
- Match Licenses to Usage Closely: Conduct a thorough inventory of JD Edwards users and modules to ensure accurate licensing. Remove or reassign unused licenses (to avoid paying support for shelfware) and purchase any additional licenses needed for current use before an audit forces you to do so. Regular internal true-ups prevent compliance surprises.
- Understand Your Contract and Audit Clause: Review your Oracle Master Agreement and ordering documents for specific details on the audit clause, defined metrics, and any special terms. Knowing that Oracle can audit with 45 days’ notice, it is essential to have an internal team and process ready to respond. Clarify internally who is responsible for managing an audit and ensure you can quickly produce evidence of compliance.
- Optimize License Model Selection: Select the licensing model that best suits your enterprise’s use of JD Edwards. Consider enterprise metric licenses to cover all users for broad, enterprise-wide functions. Negotiate a CAS bundle for efficiency if the same group needs many modules. Otherwise, stick to targeted Application User licenses. It’s common to use a mix of models – for example, user-based licensing for core ERP modules, but an Employee-based enterprise license for HR self-service. Tailor the model per module to minimize cost.
- Negotiate for Discounts and Caps: Oracle typically offers significant discounts off the list price, especially for larger deals. Push for bundle discounts in CAS, and multi-product discounts if you’re licensing many modules simultaneously. Also negotiate caps on support uplift – e.g., request a clause that limits annual support increase to 0-3% for a few years. If JD Edwards is a strategic platform for you, use it to negotiate more favorable terms in writing.
- Budget for Long-Term Support: Plan for the Cumulative Effect of Support Increases. Over 5-10 years, an automatic 4% annual increase compounds to over 20% higher fees. Factor this into TCO calculations when adopting JD Edwards. If the costs become too high, consider exploring third-party support, but do so only with a thorough understanding of the trade-offs. Maintaining Oracle support provides upgrades and peace of mind, so justify the expense by utilizing those benefits.
- Implement Strong Internal Controls: Establish processes to ensure that new JD Edwards users or module activations undergo license compliance checks. For example, if a new department wants to use a JD Edwards module, involve IT Asset Management to confirm available licenses or procure more if needed. This prevents well-meaning teams from accidentally exceeding entitlements. Train admins and business units on the rules (e.g., every JD Edwards login must correspond to a paid license).
- Monitor and Record Usage Continuously: Leverage JD Edwards auditing tools or third-party tools to track actual usage of the system. Keep logs of peak concurrent users (if applicable), user login counts, and transaction volumes for modules licensed by metrics (e.g., number of expense reports if licensing Expense Management by reports). These data serve two purposes: ensuring compliance and providing evidence for optimizing or renegotiating licenses. If you can demonstrate to Oracle that your usage patterns have changed, you may be able to negotiate a license reduction or a different model in the future.
- Engage Oracle Proactively: Maintain an open dialogue with Oracle or your JD Edwards vendor partner. If you anticipate a growth (new users or a merger increasing employees) talk to Oracle about additional licenses in advance, often you can negotiate a better price in a planned purchase than during an audit fight. Similarly, if parts of the system are being retired, discuss potential options (like migrating credits to other Oracle products) rather than simply terminating and losing value.
- Stay Current on Licensing Policy Changes: Oracle occasionally updates its licensing policies or price list metrics. For example, if Oracle introduces a new metric or modifies CAS bundle offerings, being aware of this can present opportunities to save. Subscribe to Oracle’s official communications or work with a licensing advisor to stay informed and avoid being caught off guard by policy shifts. This is especially important as Oracle’s cloud offerings evolve – while JD Edwards remains on-premises, Oracle may offer incentives to transition to cloud ERP, which could impact your licensing strategy.
Read Optimizing Oracle JD Edwards Licensing Costs: Negotiation and Cost-Saving Strategies.
Oracle JD Edwards Licensing FAQ
Q: How is an “Application User” license counted in JD Edwards?
A: It’s counted per named individual. Every unique person who logs into JD Edwards (for production use) requires an Application User license for each module they use. Shared or generic logins are still considered separate users for licensing purposes.
Q: What is a JD Edwards Custom Application Suite (CAS) bundle?
A: CAS is a licensing option where multiple JD Edwards modules are bundled into one custom suite, licensed per user. A CAS user license entitles that person to use all modules in the bundle. Companies negotiate a single price for the bundle (often at a discount), rather than buying each module separately.
Q: What are “Enterprise metric” licenses in JD Edwards?
A: These licenses cover an entire organization based on total employees, revenue, or similar metrics. Instead of counting users, you pay according to the business size. For example, licensing by Employee count allows unlimited JD Edwards users, as long as your total employee number is within the licensed amount.
Q: How do we choose between Application User vs CAS vs Enterprise licensing?
A: It depends on usage patterns. Use Application User licenses when distinct groups use specific modules (so you pay only for those who need them). Consider a CAS bundle if the same set of users requires many different modules – it simplifies licensing and might be cheaper in bulk. Enterprise metric licensing makes sense if practically all employees need access to a function, or tracking individual users is impractical. A hybrid approach is often optimal, using different models for different JD Edwards components.
Q: How much do JD Edwards licenses cost per user?
A: Oracle’s list prices vary by module. Core ERP modules (such as Financials and Manufacturing) are priced at around $4,000–$5,000 per named user license. For instance, financial management costs roughly $4,595 per user. Some add-on modules are cheaper, and others (like industry-specific ones) could be higher. Note, these are list prices – actual prices after negotiation can be significantly lower.
Q: What is JD Edwards’ annual support cost?
A: Standard Oracle support is 22% of the yearly license fees. So, if you spent $1 million on licenses, support would be approximately $220,000 per year, and can increase by about 3-4% annually under Oracle’s support uplift policy. This fee gives you access to updates and technical support. It persists as long as you want Oracle’s support; if you stop paying, you lose update rights.
Q: What audit risks should we watch for with JD Edwards?
A: The biggest risk is unlicensed usage – more users or modules are being used than you have the right to. Oracle can audit with notice and will require the purchase of any shortfall (plus back support). Also, ensure you’re not using any JD Edwards components beyond what you bought (e.g., using a module or feature that wasn’t licensed). Regular internal audits and compliance checks are the best defense.
Q: What happens if Oracle finds us out of compliance in an audit?
A: You’ll be asked to immediately purchase the necessary licenses at the listed price and potentially pay backdated support fees for the period of unlicensed use. Oracle may also charge interest or penalties as allowed by your contract. Non-compliance means an unplanned bill, often much higher than if you’d been properly licensed in advance. It’s far cheaper to remain compliant proactively than to settle a compliance gap after an audit.
Q: Can we reduce JD Edwards licensing or support costs?
A: Yes, several strategies: negotiate a good license discount upfront (Oracle expects this for large deals). Only renew support on licenses you truly need – consider terminating support on shelfware, but be mindful of Oracle’s repricing policies. If support costs become too high, third-party support firms can take over support at lower fees (though you won’t get Oracle upgrades). Additionally, optimizing your user counts (turning off access for those who don’t need it) can help avoid unnecessary license/support costs.
Q: Are JD Edwards on-premise licenses perpetual, and is the product still supported?
A: Yes, on-premise JD Edwards licenses are generally perpetual – you buy them once and can use the software indefinitely. Oracle continues to provide Premier Support for JD Edwards (EnterpriseOne 9.2) through at least 2036, so it is fully supported for the foreseeable future. This long support timeline means enterprises can safely invest in JD Edwards on-prem, as long as they stay current on support or updates. Always verify your version and patches to ensure you remain in a supported configuration.
