What is an Oracle PAH License ?

Oracle PAH is short for Oracle Proprietary Application hosting license. Oracle PAH has replaced generic hosting licenses that Oracle used to resell in the early 2000-2010. This is a license model available only to Oracle ISVs. Oracle PAH license model can utilize all Oracle technology software, including Oracle database and Oracle middleware products such as WebLogic. Oracle PAH license model is designed for ISVs or companies that build and develop their own IP running on Oracle technology, so they can create hosting environments (SaaS).

Oracle PAH License vs Full use

Full use licenses

Oracle end customers are purchasing full use licenses and they allow the end customer to use the Oracle software licenses for internal business operations and there are normally no restrictions for which applications you can use the Oracle licenses for.

From the Oracle OMA – rights granted:

“Upon Oracle’s acceptance of your order, you have the limited right to use the programs and receive any services you ordered solely for your internal business operations and subject to the terms of this agreement,(…)”

Oracle PAH licensing limitations

  • The Oracle ISV owns the license, the end customers signs no licensing agreements.
  • Oracle PAH license model can only be used if you own the IP that utilizes Oracle software.
    This means you cannot use an Oracle PAH license for third party applications.
  • Oracle PAH license must be used for environments one to multiple end customers. This is not a license model that you should use for 1:1 hosting.
  • The Oracle PAH license model is restricted to a specific solution/application, that is defined in the Oracle licensing agreement between Oracle and the Oracle ISV. It is called an Oracle APRF that is part of the licensing agreement that the Oracle ISV signs with Oracle.
  • The solution that is based on Oracle PAH licenses must be commercially available to multiple end customers. If you are an end customer who is being approached by Oracle to re-buy new PAH licenses to replace old internal use licenses, be careful before purchasing licenses that may make you non-compliant.

Incorrectly purchasing Oracle PAH license model

  • Oracle sales teams has aggressively been contacting customers and offering them to re-purchase their Oracle licenses under this Oracle PAH license model. However, this model is often the wrong license model, and you are exposing your company to financial risk.

What does it say in Oracle license agreements about hosting?

We see 2 different variations

  • One contract has “Internet hosting” term added to the Oracle Ordering Document. You may have purchased full use licenses and Oracle granted you extended usage rights to both use the licenses for internal business operations as well as external entities.
  • Oracle Proprietary Hosting – This is when you became an Oracle ISV and agreed sign Oracle partner agreements and completed the APRF form.

What is proprietary hosting?

Oracle prop hosting license model is a one-to-many license model. The ideal scenario is when company A wants to create a Software as a Service offering with their own ip and use Oracle technology, such as a database. Instead of every company purchasing their own licenses, the hosting and the owner of the solution software buys the licenses.

Oracle PAH licenses vs Oracle full use licenses ?

  • Oracle PAH – can only be used for one solution/service.
  • Oracle PAH –  Is a license model to allow third parties accessing Oracle software.
  • Oracle Full use – Is for your internal business operations, 1:1 license model.
  • There are full use Oracle ULA and there are full use for PAH license models as well.

Can any company sign a contract for Oracle hosting license ?

Yes, but you must pay attention to what the requirements/licensing rules that apply for this model. Due to Oracle Account reps wanting to “resell” the Proprietary application hosting licenses to you they often miss-represent what you can use the Oracle PAH licenses for.

oracle hosting license

Basic conditions to fulfil if you qualify for Oracle PAH licenses:

  1. You must own the IP/application that you are going to use the licenses for. You cannot use Oracle application proprietary hosting licenses for a third-party application.
  2. It must be commercially available (for sale to other end customers, price list or sales material qualifies as commercially available)
  3. You must make the licenses available to multiple end customers (It’s not only for your own internal operations, but it must also be for external customers that have signed a purchasing agreement with your company).Oracle hosting licensing document, you can find here.

FAQ on Oracle PAH licensing

Is the pricing the same for Oracle hosting license the same as for Oracle full use licenses?

You may pay a slightly higher price for Oracle proprietary application hosting licenses then the normal internal use, but this needs to be negotiated with Oracle.

Oracle Account team wants me to buy Oracle hosting license and replace my old licenses and lower my support fees over a few years. What should I do?

Do not trust on what the Oracle account team is telling you, review the licensing terms for PAH licenses. The account team will collect their sales commission and leave Oracle, but it is your company that will face the legal and financial risk if you are audited. Ultimately it is you who signs the contract and makes the decision that your company can use Oracle PAH license model.

Do I need to license my test and development environments if I am developing an application that will in the future go into PROD?

No, if you are OPN member, you have the right to prototype and test your applications. However when you have the solution in prod, test and dev needs to be licensed.

If our prop hosting application is in production, do I need to license my test and dev environments?

Answer: Yes as soon as your application is in production you need to license all your test and dev environments.

How do Oracle define what I can use my Oracle hosting license for ?

This is defined in an APRF (Application Package Registration Form) this is a template that you as an ISV/Partner to Oracle will be required to complete. It describes the name of your application, its architecture, where your end customers, your application name etc.

This is APRF needs to be approved by Oracle and will then be part of your PAH licenses agreemens.

What is your advice on how to complete the Oracle APRF?

Be as vague as possible if you put too many details such as application version. You may need to negotiate a new APRF agreement with Oracle if you perform any changes/develop your application further. It is in your interest to keep it vague to provide flexibility for future updates. We used to design and negotiate ISV contracts for Oracle, and this is our best advice. If you are an Oracle ISV and wants our expertise we are ready to help.

What if I already purchased Oracle hosting license and I have the incorrect Oracle licensing model ?

Ultimately, it is your responsibility to understand and agree to what you have signed. If you have signed Oracle PAH agreement and are using it for your own internal use, not multiple end customers. You have a financial risk if Oracle will audit you.

How does the licensing metrics work with Oracle hosting license ?

It’s the same as Oracle standard licensing metrics, named user plus and processor based.

The difference is in the contract and who, and how you may use the licenses. That is defined by the license model as well as the APRF form.

Can I convert my internal use (Full use) licenses to PAH?

Yes, but it requires a negotiation with Oracle, you will need to sign an amendment and make a payment for Oracle to grant you these extra rights. What happens is that you get extended usage rights and the full use is generally kept.

Can I sign a prop hosting ULA?

Yes, you can but Oracle usually puts on much more restrictions prop hosting Oracle ULAs vs normal ones –  and you need to undergo the difficult exit process.

oracle pah hosting

Read more on our blog

Oracle license compliance scripts
Oracle ASFU license model – Explained

If you are an Oracle ISV or an end customer and are discussing with Oracle about hosting licenses, Oracle PAH, Oracle PAH or oracle proprietary hosting licenses we can help. When we worked at Oracle we designed hosting agreements for Oracle partners and we can clarify all the Oracle licensing rules associated with hosting licenses as well as help you design a hosting agreement with minimal compliance risk. If you want to find out more about our services, schedule an consultation.