Peoplesoft Licensing Guide – Four License Models

PeopleSoft Licensing

• Application User License: Assigned to authorized individuals to use the software.
• Employee License: Covers all employees, including contractors.
• Expense Report License: Based on the number of submitted expense reports annually.
• FTE Student License: Applies primarily to educational institutions based on student count.

PeopleSoft Licensing Guide – Four License Models

PeopleSoft is a powerful Oracle suite used worldwide for HCM (Human Capital Management) and FSCM (Financials and Supply Chain Management).

However, licensing PeopleSoft can be complex. Oracle offers multiple licensing models with different metrics, scope, and cost implications.

This guide demystifies the four primary PeopleSoft license models and provides practical insights for application owners and IT leaders managing global PeopleSoft environments.

We’ll explain each model – Application User, Custom Application Suite (CAS), Concurrent User, and Processor-Based licensing – and how they apply across major PeopleSoft product lines. ‘

You’ll learn how Oracle calculates user entitlements, how modules are licensed individually or in bundles, and what “System Foundation” means in this context.

Real-world scenarios, ranging from global HR deployments to shared services models, illustrate each model in action.

We also compare PeopleSoft’s approach to Oracle E-Business Suite and JD Edwards, highlighting license compliance risks, audit triggers, and Oracle’s annual support costs versus third-party support options.

By the end, you’ll clearly understand PeopleSoft licensing and actionable best practice Recommendations to optimize your PeopleSoft license strategy.

Read Oracle Licensing Guide for CIOs and Procurement..

PeopleSoft Licensing

PeopleSoft is sold as a collection of modules in various functional areas, including HCM (e.g., Core HR, Payroll, Benefits) and FSCM (e.g., General Ledger, Procurement, Inventory). Each module must be licensed for legal use.

Oracle typically licenses PeopleSoft modules on a per-metric basis – for example, by number of users or size of your organization.

It’s critical to align the license model with how your organization uses PeopleSoft.

User Entitlements:

In any model, an important concept is the entitlement – the quantity of usage you are allowed. This means the number of people authorized to use the software for user-based models. It could be the number of employees in your company for enterprise models. Oracle defines these terms precisely. For example, an “Application User” is any named individual authorized to use the PeopleSoft application, regardless of how often they use it.

An “employee” includes all your organization’s full-time, part-time, and temporary staff (often contractors). These definitions are important when calculating the number of licenses you need. Oracle will count every person who meets the definition, not just active logins.

Modular Licensing vs Bundling:

PeopleSoft modules can be licensed separately or bundled. If licensed separately, you purchase a license allotment for each module. For instance, you might license 50 users for PeopleSoft General Ledger and 20 for PeopleSoft Purchasing. In that case, the same person using both modules would consume one license for each module.

Oracle offers Custom Application Suite (CAS) licensing to simplify this: it allows you to bundle multiple modules under a single license pool. Bundling can reduce complexity and cost for users needing access to multiple modules, as each license covers the entire suite of chosen modules.

Prerequisites and Foundation:

Keep in mind that some PeopleSoft modules have prerequisites. For example, implementing an add-on like PeopleSoft Expenses might require first licensing a core Financials module. Additionally, all PeopleSoft environments require the underlying PeopleTools platform.

PeopleTools (the technical framework, including the application server and database schema) is essentially the “system foundation” for PeopleSoft.

The good news is that when you license any PeopleSoft application module, Oracle includes a restricted-use PeopleTools license.

This means you don’t pay extra for PeopleTools runtime—it covers the necessary PeopleSoft tech stack, including the Oracle database and middleware, for use only with PeopleSoft. You cannot use those included components for anything other than PeopleSoft.

For instance, the Oracle database license bundled with PeopleSoft can only host PeopleSoft schemas; if you add a non-PeopleSoft database to that server, you’d need to separately license Oracle Database for that usage.

The same principle applies to Oracle WebLogic Server or Tuxedo middleware bundled with PeopleSoft – they’re only licensed for PeopleSoft applications.

This “foundation” requirement ensures you have the technical base to run PeopleSoft, but also creates compliance obligations: using the tech stack outside the PeopleSoft scope violates the license.

Now, let’s explore each licensing model in detail.

Read Optimizing PeopleSoft Licensing Costs and Negotiations.

Four PeopleSoft Licensing Models

Oracle’s four main licensing models for PeopleSoft differ in how usage is measured:

1. Application User Licensing – per named user authorized.
2. Custom Application Suite (CAS) Licensing –a bundle of modules under a unified user or enterprise license.
3. Concurrent User Licensing – based on simultaneous users (legacy model).
4. Processor-Based Licensing – based on CPU capacity (rarely used).

Each model suits different scenarios. We’ll explain how each works and provide real-world examples.

1. Application User Licensing

Definition: Application User licensing means you pay per individual user. Every person authorized to access a PeopleSoft module requires a license. This is analogous to a “named user” model – licenses are tied to identities, not shared among many people. It doesn’t matter if a user logs in daily or once a month; if authorized, they count as one license.

How It Works: You purchase several Application User licenses for each PeopleSoft module or suite. For example, you might license 100 users for PeopleSoft Human Resources or 50 for PeopleSoft Financials.

This entitles many named individuals to have accounts in the system. If your organization grows and you need to add more users beyond the licensed count, you must acquire additional licenses. Conversely, suppose you have licenses for users who no longer need access. In that case, you can reallocate them to new users if the total number of active authorized users stays within your purchased quantity.

HCM vs FSCM usage:

Application User licensing is common in PeopleSoft FSCM (Financials and Supply Chain). Modules like General Ledger, Accounts Payable, or Procurement are typically used by specific roles (accountants, buyers, etc.), so you can count those people and license accordingly.

For example, if only 20 accountants use the General Ledger module, you license 20 Application Users. In PeopleSoft HCM, Application User licensing might be used for administrative modules or when only HR staff use the system. However, suppose you plan to extend PeopleSoft HCM self-service to all employees; licensing each employee individually as an Application User is impractical. In that case, the Employee-based model (discussed later under enterprise metrics) is usually chosen.

Cost Implications:

The cost scales linearly with the number of users. This model is straightforward and predictable – you can budget accordingly if you know how many people need access. The flip side is that it can become expensive for broad deployments. You pay full price for each user, even those who use the system lightly. Organizations often try to limit who gets access under this model to control costs. There is no concept of an occasional use discount – a user is either licensed or not.

Real-World Scenario – Financials Team: A global manufacturing company implements PeopleSoft Financials (FSCM). The finance department has 40 staff members, including accountants, controllers, and auditors, who require access to the system. The company licenses 40 Application Users for the core Financials modules (General Ledger, Accounts Payable, and Accounts Receivable). Only those 40 named individuals are set up with login accounts. Even if other employees occasionally need to view financial data, they are not given access unless they get a license. When one person leaves and is replaced, their license is reassigned to the new hire. This approach ensures compliance by strictly matching the number of users to the number of licenses.

2. Custom Application Suite (CAS) Licensing

Definition: Custom Application Suite licensing allows you to bundle multiple PeopleSoft modules into one custom suite and license it under a single metric. It is essentially a packaging model. Instead of licensing each module separately (with separate user counts), you create a suite of several modules and purchase licenses that cover the entire suite. Each license (often measured by user or enterprise) grants rights to use all modules in the bundle.

How It Works:

CAS, Oracle, and the customer agree on the modules to include in the suite. All those modules are then treated as one product for licensing. Typically, CAS is still quantified by several users (sometimes called “Custom Suite User”), or it could be tied to an enterprise metric like all employees if it’s an organization-wide suite.

Each Custom Suite User license authorizes one individual to use any module in the bundle. You don’t need separate user licenses for each component. This model simplifies license management – you track a single pool of licenses for the suite instead of multiple pools for individual modules.

Benefits:

The primary benefits are cost savings and simplicity. CAS can be a more economical option if the same group of users needs access to multiple PeopleSoft modules. For example, without CAS, if one employee needs to use four different modules, you would need to allocate four separate licenses—one per module—for that person.

Under a CAS bundle, that employee consumes just one license and can use all included modules. CAS also often comes with a discounted price compared to buying each module separately. It’s ideal for broad, multi-functional PeopleSoft deployments where module usage overlaps across departments.

Ideal Use Cases: CAS licensing is commonly used in enterprise-wide PeopleSoft rollouts or shared services models. For instance, a company might use an integrated PeopleSoft HCM and Financials suite to cover HR, Payroll, Finance, and Procurement processes on one platform. Many users, especially managers and IT staff, may interact with the HR and Finance modules. CAS lets them do so with one license. It’s also useful if you want a simple metric, like “per employee,” to cover everything. Oracle could create a CAS priced per employee that covers the full PeopleSoft suite for your enterprise (this essentially becomes an enterprise license).

Real-World Scenario – Shared Services Bundle: A large multinational company operates a shared services center that utilizes PeopleSoft for HR and Finance operations. Employees in this center need access to multiple modules: Human Resources, Payroll, General Ledger, and Purchasing. Rather than licensing each module separately, the company negotiates a Custom Application Suite license. The suite includes all four modules. They decide on an enterprise metric, for example, licensing the suite for up to 500 users across the organization. Those 500 “suite users” can be assigned to staff in HR, finance, or any department, and each such user can utilize any of the PeopleSoft modules in the suite. This greatly simplifies compliance tracking. If a new module, such as PeopleSoft Expenses, is later added to the suite, it automatically falls under the same 500-user license pool.

CAS vs. Individual Module Licensing:

One thing to note is that CAS is a custom arrangement—Oracle typically offers it to customers who request a bundled deal. A CAS might not save money if you use PeopleSoft with very siloed users (distinct users for each module).

But if you anticipate expanding PeopleSoft usage or want to future-proof your license for additional modules, CAS provides flexibility. It also reduces the risk of “forgotten module” compliance issues – you won’t accidentally use a module you didn’t buy, if it’s already in the bundle.

Always ensure the bundle covers the foundational modules first (e.g., include PeopleSoft HCM core if you plan to use any HR submodules, and include Financials core if you plan to use any finance modules).

3. Concurrent User Licensing (Legacy Model)

Definition:

Concurrent User licensing is a shared user pool model where licenses are based on the number of users actively accessing the system simultaneously.

Unlike the Application User model (which ties to named individuals), the Concurrent model allows any number of individuals to exist, but only a limited number may use the system concurrently.

If the licensed concurrent limit is 50, 50 users can be logged in simultaneously. The 51st user attempting to log on would be blocked (or would put you out of compliance if not technically enforced).

Status:

This is considered a legacy model in the Oracle world. Oracle used concurrent user licensing more commonly in older contracts and products, such as JD Edwards or Siebel. For PeopleSoft, Oracle prefers named user or enterprise metrics today.

However, some long-time PeopleSoft customers still operate under concurrent user agreements from the past, and Oracle honors those. It’s rare to see a new PeopleSoft deal with concurrent licensing in 2025. Still, it’s important to understand because it may apply in specific cases and is conceptually different from named user licensing.

How It Works:

If you have a concurrent license for N users, you can create as many user accounts in PeopleSoft as you want, but you must ensure no more than N users are using the system simultaneously. “Using” typically means logged in actively.

Sometimes this is managed by the application (through a login control mechanism), but often it’s an honor system backed by monitoring and your procedures to limit access. Oracle’s license definition of a concurrent user usually specifies that a concurrent user is an individual accessing the program simultaneously with others​.

Note that Oracle sometimes restricts concurrent users to specific roles (for example, in some Siebel CRM contexts, concurrent users must be external users, not employees). In PeopleSoft’s case, concurrent usage was historically offered for scenarios like self-service or campus solutions, where a large population might use the system, but not all at once.

Advantages:

Concurrent licensing can be very cost-effective if you have a large user base with sporadic access. For example, 1,000 employees might need to use PeopleSoft occasionally, but you know only about 100 are ever on simultaneously. Buying 100 concurrent user licenses instead of 1,000 named ones drastically cuts costs. It lets you “overprovision” user accounts if concurrent activity is limited.

Read PeopleSoft License Compliance and Audit Best Practices.

Risks and Downsides:

The challenge is managing concurrency. Usage patterns can spike, especially in global operations. If more users than anticipated log in concurrently (for instance, during payroll submission deadlines or open enrollment periods in HCM), you risk breaching your license terms. Unless controlled, concurrent licensing can lead to accidental non-compliance. It’s also harder to track – you need monitoring tools to count active sessions.

Oracle auditors will scrutinize system logs and usage statistics to determine peak concurrent counts. Another downside is that Oracle generally charges a premium per license for concurrent metrics compared to named users, as one concurrent license can potentially cover multiple individuals, making it more valuable.

Often, a rule of thumb was that one concurrent user license might cost roughly three times that of a named user license – the break-even point would be if each named user used the system only one-third of the time, for example.

Real-World Scenario – Global Self-Service Portal: A retail enterprise with 5,000 employees worldwide uses PeopleSoft HCM mainly for employee self-service functions (view payslips, update personal info) and for managers to approve timecards. All employees need access, but usage is infrequent – perhaps a few times a month per employee – and tends to cluster around certain days.

The company has a legacy PeopleSoft contract that allows Concurrent User licensing. Analysis shows that peak concurrent usage is about 300 users (during payroll week, when many employees view their payslips and managers approve time entries). The company, therefore, maintains 300 concurrent user licenses for PeopleSoft HCM self-service.

This covers the typical load with a safety buffer. All 5,000 employees have login credentials, but the system will restrict logins if more than 300 are active at once. The IT team monitors usage, and if peaks approach the limit, they either stagger access or consider increasing the licensed count. This way, the company avoids purchasing thousands of named user licenses while enabling broad access.

In this scenario, the concurrent model dramatically reduced cost, but it requires diligent monitoring. New customers might not get this option today, but it still applies to some who have it grandfathered in. If you are one of them, enforce the limits – e.g., via PeopleSoft configuration or external identity management rules – and document that usage never exceeded the licensed number.

Read PeopleSoft Licensing in Cloud and Virtual Environments.

4. Processor-Based Licensing

Definition:

Processor-based licensing is a model where you license PeopleSoft using the processing power of the servers rather than by users. It’s similar to licensing Oracle Database or other infrastructure software. Oracle defines a “processor” (for licensing purposes) as a physical or virtual CPU core, possibly multiplied by a core factor depending on CPU architecture. For PeopleSoft, a processor license allows an unlimited number of users on a server, constrained only by CPU count.

Usage and Rarity:

This model is uncommon for PeopleSoft. Historically, Oracle’s price lists for PeopleSoft (and other applications) have a processor licensing option, but it is rarely chosen because most PeopleSoft deployments fit well with user-based metrics. Processor licensing is typically seen when counting users is not feasible or PeopleSoft is part of a service offering. For example, an outsourced payroll provider running PeopleSoft might prefer to license the software by processor, since they serve many client organizations, tracking individual named users or employees across clients would be impossible.

How It Works:

You identify the servers where PeopleSoft will run and count their CPU cores (or virtual cores, if in a VM environment, following Oracle’s hard-partitioning rules, if applicable). Then, Oracle’s core factor is applied (for instance, x86 processors have a factor of 0.5 per core in many cases). The result is the number of processor licenses you must buy. For example, if running on an 8-core Intel server, eight cores × 0.5 factor = 4 processor licenses needed (Oracle usually rounds up fractional to the next whole number). Once licensed per processor, you can have any user accounts in PeopleSoft and concurrent sessions – those are no longer counted. The limitation is that you cannot exceed the licensed hardware footprint. If you add servers or increase the number of CPU cores, you will need to license more processors.

When to Use:

Processor licensing might be applicable in hosted or SaaS-like models and scenarios with a high volume of external users. If PeopleSoft is customer-facing (for example, a public-facing student registration system for a large university, or a supplier portal in a supply chain scenario) where tens of thousands of users might access, but you can’t practically license each individually, a CPU metric is a solution. Also, some organizations opt for processor licensing to avoid the administrative overhead of tracking user counts – they essentially “unlimit” the user aspect and manage capacity instead. This can make sense if user counts fluctuate greatly or if usage is spread across shifting populations.

Costs:

Processor licenses are expensive; Oracle prices them such that they equate to a certain high number of users. It ensures Oracle is compensated for broad usage. For example, one processor license might be priced roughly equivalent to 50 or 100 named users (exact ratios vary). The processor model could be a cost advantage if you truly have hundreds of users. However, if you have a small user base, processor licensing will likely be more expensive than buying named user licenses.

Real-World Scenario – HR Service Provider: Consider an HR outsourcing firm that hosts PeopleSoft HCM to manage HR processes for many client companies. Thousands of client employees and HR staff from various companies must access the system. The user population is extremely large and distributed, making it impractical to count each named user or each employee across all clients.

The provider opts for Processor-Based licensing. They deploy PeopleSoft on a cluster of 4 servers, each with 16 CPU cores. Given Oracle’s core factor (for example, 0.5 for modern Intel cores), this environment requires 32 processor licenses (4 servers × 16 cores × 0.5).

With those licenses, the provider can allow any users from the client companies to use the PeopleSoft system as long as they stay on that licensed hardware infrastructure. When capacity grows (say, they add another server), they true up by purchasing additional processor licenses. This model lets them scale service without worrying about tracking individual user licenses for each client.

Again, processor licensing for PeopleSoft is rare unless you specifically negotiate for it due to your business model. Most standard corporate PeopleSoft deployments use user or employee metrics. But it’s good to know this model exists, especially if you envision a large-scale or external user portal scenario.

PeopleSoft HCM vs FSCM Licensing Considerations

PeopleSoft’s two flagship product lines – HCM and FSCM – sometimes favor different licensing approaches:

• HCM (Human Capital Management): This includes modules such as Human Resources, Payroll, Benefits, Recruiting, and Talent Management. HCM must often be accessible to the entire workforce (for employee and manager self-service). In such cases, licensing by individual named users is cumbersome, as every employee might need a license. Thus, PeopleSoft HCM is frequently licensed based on an enterprise metric, such as employee count. Oracle’s employee licensing metric counts all employees (and usually contractors in scope) within your organization. For example, if you have 5,000 employees, an Employee-based license would cover the PeopleSoft HCM suite for all 5,000 individuals. This model scales with company size – if you hire more people, your license requirements increase correspondingly. Some HCM modules may be licensed based on specific metrics. For instance, Oracle had a metric for PeopleSoft Expenses based on the number of expense reports per year, or a Campus Solutions metric based on the number of students. These are specialized cases. Generally, for core HR and related functions, Employee-based licensing or a broad CAS covering HCM modules is common for large deployments. Smaller HCM deployments, for example, just an HR department using the system without giving access to all employees, can be done with Application User licensing, as only HR staff would be users.
• FSCM (Financials and Supply Chain Management): This suite includes modules such as General Ledger, Accounts Payable, Accounts Receivable, Purchasing, Inventory, Order Management, etc. These functions are typically used by specific professionals in finance or supply chain roles, not by every employee. Thus, FSCM modules are often licensed by the number of Application users. You identify how many people in accounting, procurement, warehouse, etc., need access and license them. Using the named user model is feasible since the user pool is bounded. One exception could be supplier-facing or customer-facing functionality (for example, a Supplier Portal in PeopleSoft might have many external users). If PeopleSoft is extended to external parties, those external user licenses may be handled via separate metrics or included in a larger CAS. But for internal usage, counting users works well. FSCM also lends itself to CAS bundling: many organizations purchase a bundle of Financials modules as a suite (e.g., GL, AP, AR) licensed per user or enterprise. Oracle’s Custom Application Suite is often used with Financials to bundle core financial modules or bundle Financials with Supply Chain modules if the same group uses both.

System Foundation Requirement:

In PeopleSoft, the “foundation” is PeopleTools and core technology, which (as noted earlier) comes with your application licenses as a restricted-use entitlement. You don’t purchase PeopleSoft PeopleTools separately for production use – it’s included. This is slightly different from Oracle’s JD Edwards, where the System Foundation is a separately priced prerequisite license required for all JDE installations. PeopleSoft doesn’t sell “PeopleTools license” separately from the apps, except if you wanted a full development license for PeopleTools alone (which a typical customer wouldn’t need unless building entirely new custom applications on PeopleTools).

The key takeaway is that you must have PeopleTools to run PeopleSoft, and Oracle ensures you do by bundling it. However, you must adhere to PeopleTools’ restrictions: use it only within the scope of licensed PeopleSoft modules and users.

The included foundation covers things like the application server component, the integration broker, and even Oracle BI Publisher for reporting within PeopleSoft – but if you use any of those tools (like BI Publisher) against non-PeopleSoft data, or if you use the included Oracle database for anything other than PeopleSoft, you’d step outside the license bounds. In short, your PeopleSoft license implicitly includes the system foundation to run it, but only for use with PeopleSoft.

Licensing Individual Modules vs Suites:

HCM and FSCM have numerous modules, and Oracle’s contracts will list each module, specifying its licensed metric. In an enterprise CAS deal, you may have a single line item, such as “PeopleSoft HCM Suite – Employee metric – 10,000 employees,” which covers multiple modules.

In a component deal, you might have separate line items: e.g., “PeopleSoft Payroll – 5,000 Employees”, “PeopleSoft Time and Labor – 5,000 Employees”, “PeopleSoft HR Core – 5,000 Employees”, etc., if employee count licenses each. Ensuring that all the modules you use are explicitly licensed is essential.

Oracle often sells bundles, such as “HCM Full Use,” including core modules. However, suppose you decide to implement an additional module (for example, you want to start using PeopleSoft Recruiting but haven’t licensed it).

In that case, you must obtain a license for it before use. Each module requires its license and sometimes requires you to own certain other modules (prerequisites). Always check Oracle’s PeopleSoft price list or ask Oracle reps about prerequisite products.

For example, suppose you want to license PeopleSoft Inventory (a Supply Chain module). In that case, you may also be required to license PeopleSoft Purchasing or another related base module, if it is not already in place. These requirements exist to ensure that functionality works (and, of course, to ensure Oracle sells the foundational pieces).

Comparison with Oracle E-Business Suite and JD Edwards

Oracle has multiple ERP product lines. If you’re familiar with Oracle E-Business Suite (EBS) or JD Edwards (JDE), you might wonder how PeopleSoft’s licensing differs.

Here’s a quick comparison for context:

• Oracle E-Business Suite (EBS): EBS is another Oracle ERP system that covers similar domains, including finance, HR, supply chain, and more. Licensing models for EBS are similar in concept to those for PeopleSoft. EBS also uses Application User licensing as the primary metric for most modules​. It offers a Custom Application Suite bundle that combines multiple modules in one license. It also offers an Employee-based licensing option for certain products or enterprise deals. One notable difference is in the technical stack: Oracle EBS has historically required a separate Oracle Database license – it is generally not bundled with EBS application licenses. So an EBS customer must license Oracle Database (by NUP or processor) in addition to EBS module licenses. PeopleSoft, by contrast, can leverage the included restricted database usage for its application (meaning if you run PeopleSoft on Oracle Database exclusively for PeopleSoft data, you may not need to buy a separate full-use DB license​). Many PeopleSoft customers run on other databases too (SQL Server, DB2), but if they run on Oracle DB, the license for Oracle DB is often provided as part of the PeopleSoft deal in a limited manner. EBS also has some unique metrics for certain modules (for example, EBS Procurement might be licensed by “# of procurement users” vs. EBS Projects might be by “Revenue” or “Employees”, etc.), but generally, EBS and PeopleSoft licensing metrics align closely (both use user and employee metrics). The biggest difference is which modules are available in each and the prerequisite structure – EBS modules are tightly integrated and usually sold in functional bundles. In contrast, PeopleSoft modules are loosely coupled and sold more à la carte (hence the need for CAS bundling to mimic a suite).
• Oracle JD Edwards EnterpriseOne: JD Edwards is another ERP suite that Oracle acquired. JDE’s licensing is also user-centric, but with some differences. JDE historically uses Named User licensing (comparable to PeopleSoft’s Application User) as the most common metric. It also supported Concurrent User licensing for some customers (especially in older deals or shops with many casual users). JD Edwards has a concept called System Foundation, a mandatory core license every JDE customer must have. This System Foundation covers the base software infrastructure for JDE. In PeopleSoft, as discussed, the base PeopleTools is included with each application license, so there isn’t a separately paid “foundation” license – you effectively get it by licensing any PeopleSoft module. Another difference is that JD Edwards modules can be licensed using different metrics, depending on the module’s nature. For example, some JDE manufacturing modules had metrics such as “per Concurrent Asset” or other industry-specific measures, whereas PeopleSoft modules generally use user or employee counts. Regarding bundling, Oracle also offers Custom Application Suite deals for JD Edwards (especially when customers use JDE modules across financials, manufacturing, etc., they might bundle them). Conceptually, CAS exists in all three systems (PeopleSoft, EBS, JDE)
  to simplify multi-module licensing. One practical difference often noted is that PeopleSoft and JDE customers can sometimes leverage the included database and middleware usage, while EBS customers typically budget for these separately. Also, Oracle tends to license its technology products, such as Database and WebLogic, differently for each application family. However, with PeopleSoft and JDE, Oracle often includes restricted-use licenses for those components, especially when running on Oracle’s technology stack.
• Product Scope: PeopleSoft is renowned for its Human Capital Management (HCM) capabilities; many Oracle customers choose PeopleSoft HCM over Oracle E-Business Suite (EBS) HR. In such cases, they license PeopleSoft HCM separately while perhaps using EBS for financials. In those scenarios, licenses are managed distinctly (you’d have EBS licenses and PeopleSoft licenses, each with its own metrics). If you ever integrate or migrate between these suites, be careful: moving from PeopleSoft to EBS or vice versa might not be a one-for-one license transfer; Oracle may require new licenses or conversions because the products differ. JD Edwards is often used in manufacturing industries and may have lower license costs per user than PeopleSoft for equivalent modules, but that can vary.

In summary, PeopleSoft, EBS, and JD Edwards share Oracle’s general licensing framework, which uses user or enterprise metrics and optional bundling. PeopleSoft and EBS have very similar license models on paper.

JD Edwards is similar to user licensing, with a notable required base license for the foundation. One practical tip: If you’re an Oracle customer with multiple ERP products (such as EBS, PeopleSoft, and JDE), manage each license set separately and ensure compliance within each set. Oracle audits them similarly, but the licenses for each product are not interchangeable.

License Compliance Risks and Oracle Audit Triggers

Managing PeopleSoft licenses isn’t just about initial purchase – it’s an ongoing responsibility. License compliance means using the software within the bounds of what you’ve purchased and agreed to.

Several risks can lead to non-compliance, which Oracle may eventually catch in an audit.

Here are some common risk areas and what often triggers Oracle audits:

• Exceeding User or Employee Counts: The most straightforward risk is simply using more users or employees than you purchased. For example, if you licensed 100 Financials users but gave access to 120 people, you are 20% underlicensed. This often happens inadvertently as companies grow or projects expand. If a company uses an employee metric in HCM, it might grow beyond the employee count if it is licensed and does not realize it needs to true up. Regular internal audits of active users vs. licenses can prevent this.
• Enabling Unlicensed Modules: PeopleSoft systems typically have many modules installed by default. A team can start using a module that wasn’t purchased. For instance, your PeopleSoft installation might include the Recruitment module, and an enthusiastic HR team turns it on for testing and then starts using it without a license. Another example is using PeopleSoft’s Interaction Hub (portal) or a mobile app framework you don’t have rights to. Oracle’s audit tools and scripts can detect usage of features and modules. Always ensure any module you use in production is covered in your contract.
• Indirect Access and Integrations: Be cautious about systems that feed data into PeopleSoft or pull data out, especially if non-PeopleSoft users indirectly interact with PeopleSoft data. Oracle’s licenses require proper licensing for anyone who uses the system, even if they use it indirectly. For example, if a third-party timesheet system updates PeopleSoft HR records through an interface, Oracle could argue that users updating these records need PeopleSoft licenses, depending on the contract wording. Or if you expose PeopleSoft data via a web portal to users who don’t have PeopleSoft accounts, that could be a gray area. This is a nuanced area – sometimes it’s fine if the integration is batch and no real-time user interaction; other times, Oracle might see it as a license stretch. Review your license terms regarding “access or use of the programs directly or indirectly.”
• Custom Applications on PeopleTools: Since PeopleTools is a powerful development platform, some customers build custom applications or extensions on top of it. Remember, the PeopleTools included license is only for use with modules that support PeopleSoft. Suppose you use PeopleTools to build an entirely new application, such as a custom CRM system, that serves a different non-licensed user group. In that case, that usage may require additional licensing. Oracle offers a separate PeopleTools development license if needed. The audit risk is if Oracle finds custom PeopleTools objects or databases that are not tied to the delivered PeopleSoft modules.
• Infrastructure Changes (Virtualization/Cloud): Oracle has strict licensing rules in virtualized environments and cloud platforms. Running PeopleSoft on VMware clusters or migrating it to AWS or Azure can trigger Oracle’s attention. Although PeopleSoft is fully supported on cloud infrastructure, Oracle might scrutinize whether the underlying Oracle Database or other tech licenses comply. For instance, if you expand an instance to more vCPUs for performance on AWS, did you correspondingly increase your processor licenses (if using Oracle DB full use)? Or, if you’re using Oracle’s provided database, are you ensuring it’s only used for PeopleSoft? Major cloud migrations often prompt Oracle to audit, as they want to ensure that no license terms were violated during the move (cynically, they sometimes see it as an opportunity to upsell cloud licensing).
• Mergers, Acquisitions, or Divestitures: Corporate changes frequently trigger audits. If your company merges with another, Oracle might audit to check if the combined usage exceeds the sum of licenses. Or if you spin off a division running PeopleSoft, Oracle will want to verify license entitlements don’t get improperly transferred or spread. Auditors look for any contractual transfer rights issues or simply for growth that wasn’t accounted for in licenses.
• Lapses in Support / ULA Expiry: If you’ve been steadily paying Oracle support and suddenly stopped or significantly reduced your support spending, Oracle often notices. This happens if companies drop certain licenses or move to third-party support (which we’ll discuss next). Such changes can signal to Oracle that they might be losing revenue, and audits sometimes follow to ensure you’re still using supported items. Similarly, if you had an Unlimited License Agreement (ULA) for PeopleSoft that expired, Oracle may audit to ensure you are now only using what you have certified.

Oracle Audit Triggers: Oracle’s License Management Services (LMS) or Global Licensing and Advisory Services (GLAS) teams typically initiate audits based on “red flags”. Common triggers include: rapid company growth (public news of hiring or expansion), industry consolidation, nearing the end of a fiscal quarter (Oracle has quotas to meet, audits generate revenue), or simply random selection.

Additionally, deploying Oracle software in virtualized or cloud environments outside Oracle Cloud is a known trigger. Oracle’s audit notice can come at any time – it’s often a formal letter citing the audit clause of your license agreement. They may also conduct softer’ license reviews” or compliance checks through your account manager.

Consequences:

If an audit finds you are out of compliance, Oracle will issue a report and bill for additional licenses and back support fees for the period of unlicensed use. This can be very costly, as list prices may be applied.

They might also impose penalties or require you to purchase at undiscounted rates. Non-compliance can thus unexpectedly blow up IT budgets.

In addition, audits are time-consuming, so it’s far better to proactively manage compliance and avoid triggers where possible.

Oracle Support Costs and Third-Party Support Options

When you license PeopleSoft (or any Oracle software), you will typically also pay annual support fees to Oracle.

Oracle’s standard support (called Oracle Premier Support) provides access to software updates, patches, fixes, and technical support services. Understanding these support costs and alternatives is crucial for long-term budgeting.

Oracle’s Annual Support:

Oracle’s support fee is usually calculated as a percentage of your software license fees. The industry-standard rate is 22% of the license price per year​. If you bought $1 million worth of PeopleSoft licenses (at the net price), you would pay about $220,000 yearly for support.

These fees typically increase slightly yearly (Oracle can apply inflationary adjustments). Importantly, support is tied to the original purchase price, minus any applicable discounts you received at the time of purchase.

Once you start support, Oracle expects continuous coverage; if you lapse and later return, they may charge back-support or reinstatement fees. For budgeting, note that over five years, support costs will roughly equal the license cost (5 × 22% = $ 110). Over a decade, you effectively pay twice the license cost again in support.

What do you get for this money?

Premier Support entitles you to all new PeopleSoft releases and updates. For example, Oracle delivers periodic update images for PeopleSoft 9.2 (the continuous delivery model) – you can only legally apply those if you’re under support.

You also get help for technical issues via Oracle’s support portal and the ability to log service requests.

Oracle also provides regulatory updates, such as tax updates for Payroll, to its supported customers. Support is needed to keep your PeopleSoft system updated and secure over time.

Lifetime Support and PeopleSoft:

Oracle has committed to supporting PeopleSoft 9.2 through at least 2034 under the Continuous Innovation model. This means that support customers will continue receiving updates without needing a major version upgrade.

Staying on support gives you a decade or more of new features and fixes. You cannot legally download or use those new updates without support.

Third-Party Support:

Some organizations consider third-party support providers to be a replacement for Oracle support. Third-party support companies, such as Rimini Street, Spinnaker Support, and Support Revolution, offer annual support services for Oracle products at a lower cost, often around 50% of Oracle’s support fee (sometimes even less).

For example, instead of paying 22%, you might pay 11% of the license cost to a third-party provider. For a large PeopleSoft deployment, this can mean saving hundreds of thousands of dollars per year.

These providers typically promise very personalized support (direct access to experienced engineers), support for customizations (Oracle doesn’t support your custom code, but third parties often will), and they often commit to providing bug fixes and tax/regulatory updates even if you’re on an older version.

Essentially, they fill the gap so you can operate your PeopleSoft without Oracle’s direct involvement.

Trade-offs:

The big trade-off is that third-party support providers cannot provide updates or new versions of Oracle products. When you leave Oracle support, you lose access to new patches and upgrades from Oracle. Third-party providers create their fixes or help you work around issues.

They may provide tax and legal updates by replicating Oracle’s work, such as writing their patch to update tax tables. However, you will not get, for instance, the latest PeopleTools version or new feature enhancements that Oracle releases.

Most third-party support customers plan to stay on their current version long-term (“lock in” on PeopleSoft 9.2) and not take on new features.

This strategy is common when a product is mature, the business is satisfied with its functionality, and it primarily wants to reduce costs. It’s less ideal if you anticipate needing to upgrade or if compliance requires frequent application of the latest patches.

Another consideration is legal risk – Oracle has aggressively protected its intellectual property. The leading provider, Rimini Street, was involved in a long legal battle with Oracle over how it provided support (Oracle claimed IP violations). Rimini Street must now operate under court-defined rules to avoid infringement.

As a customer, you are generally within your rights to hire third-party support (Oracle cannot void your perpetual license; they can only deny you their support services). However, be aware that the third party will not have Oracle’s direct endorsement and will typically not provide assistance.

As noted earlier, Oracle might choose to audit you if they suspect you left for third-party support, to ensure you’re not sneaking updates. That said, thousands of Oracle customers successfully use third-party support to save money, especially for their stable legacy systems.

Rimini Street’s Update (PeopleSoft):

As a recent development, Rimini Street, one of the largest providers, announced that it will wind down support for PeopleSoft products in the coming years. This was related to legal rulings and strategic refocusing.

However, other firms remain in the market to support PeopleSoft. If considering third-party support, evaluate the vendor’s track record with PeopleSoft.

Hybrid Approaches:

Some companies keep Oracle support for critical modules and use third-party support for others to cut costs. This can be complicated to manage (Oracle generally doesn’t want to sell partial support easily). Still, it might be possible in certain cases (especially if you have separate contracts for different product sets).

Finally, if you plan to eventually move off PeopleSoft (say, to Oracle Cloud or another system in a few years), third-party support can be a bridge to save money in the interim. Many organizations do this: they stop Oracle support, go to a third-party provider, for example, for 3-5 years while they operate PeopleSoft in a steady state, and use the savings to fund the implementation of a new system.

This avoids paying Oracle during the sunset period of PeopleSoft usage. Just be sure to have the software versions and patches you need before leaving Oracle support, as you won’t be able to download anything afterwards (smart customers will download a library of necessary patches and documentation before the support expiration to have them on hand).

Recommendations

In conclusion, managing PeopleSoft licensing requires strategic planning and diligent operational controls.

Here are 10 best-practice recommendations to optimize your PeopleSoft licensing and stay compliant:

1. Know Your Contracts: Thoroughly review your PeopleSoft license agreement. Understand exactly which modules and which metrics you are licensed for. Clarify Oracle’s definitions (e.g., what counts as an “employee” or a “user”) and ensure your usage aligns.
2. Maintain a License Inventory: Keep an up-to-date inventory of PeopleSoft modules, the licenses purchased for each, and current utilization (users or metrics consumed). Update this after any system change or organizational change. This is your source of truth to avoid unknowingly exceeding entitlements.
3. Regularly Audit Usage: Perform internal license compliance audits at least once a year. Run reports of active user counts per module for user-based licenses and compare them to your licenses. For employee-based licenses, check current employee totals against licensed numbers. Identify and correct any over-usage before Oracle does.
4. Implement Access Controls: Use PeopleSoft security to prevent unlicensed usage. For example, if you didn’t license a particular module, restrict security roles so no one can access its pages. If you have a concurrent user limit, consider technical controls or monitoring alarms to ensure concurrent sessions don’t exceed the licensed number.
5. Educate Your Team: Ensure system administrators and functional leads understand the licensing limitations. They should know that adding a new module or significantly increasing the number of users requires procurement involvement. User provisioning processes should include a license check step (e.g., don’t just give 10 consultants access because they asked; verify licenses first).
6. Plan for Growth: Anticipate business changes, such as acquisitions, expansions, or adding new PeopleSoft functionality. Engage Oracle (or a licensing expert) proactively to adjust licenses ahead of time if needed. Negotiating a fair expansion is better than being caught in an audit later. Oracle may offer discounts or favorable terms if you voluntarily true-up rather than wait for an audit demand.
7. Consider Bundling Options: Evaluate whether custom application suite licensing could benefit you. If you expect to deploy multiple new modules, consider discussing a bundled metric or an enterprise license that covers all employees or global usage with Oracle. Sometimes, a broader license can be more cost-effective and simpler than many piecemeal licenses, especially if you can negotiate a good package deal.
8. Monitor Technical Usage: Keep an eye on PeopleSoft’s technical components. For instance, ensure the Oracle Database or other middleware included with PeopleSoft is not used outside the PeopleSoft environment. Segregate the PeopleSoft database instance from any other databases. Similarly, if you use PeopleTools for custom development, ensure it’s strictly for internal needs and within license scope.
9. Stay informed about Oracle Policies: Oracle’s licensing rules and audit tactics can change. Stay updated via Oracle’s official communications or consulting advisors about changes in PeopleSoft support policies, metrics, or definitions. For example, if Oracle were to phase out a metric or introduce a new offering, such as a ULA or cloud transition deal for PeopleSoft, you would want to know and possibly take advantage.
10. Evaluate Support Options Periodically: Reassess the value of Oracle’s support versus third-party support as your PeopleSoft system ages. If Oracle’s annual 22% fees are not yielding value (e.g., you’re hardly applying updates), consider negotiating for a reduction or switching to a third-party support provider. However, weigh the loss of new updates – if Oracle is still delivering important regulatory patches you need, staying on support may be worth it. The key is not to just autopilot pay support – ensure it fits your IT strategy.

By following these best practices, you can maximize your investment in PeopleSoft, avoid costly compliance issues, and maintain flexibility as your organization’s needs evolve.

Effective license management is an ongoing process, but it pays dividends in cost savings and peace of mind, allowing you to focus on leveraging PeopleSoft’s capabilities for your business.

PeopleSoft Licensing FAQs

What are the different ways to license PeopleSoft software?
PeopleSoft has four primary licensing metrics: Application User, Employee License, Expense Report License, and FTE Student License. Each serves a different purpose, depending on your organization’s needs.

What is an Application User License?
An Application User License allows an individual to use the licensed PeopleSoft applications on a designated server. This user is authorized regardless of whether they are actively using the software at any given time.

How does the Employee License work?
The Employee License covers all employees, whether full-time, part-time, or temporary, as well as agents, contractors, and consultants who have access to the programs. If you outsource any function, you must include the service provider’s staff who have access to or are tracked by the software.

What is an Expense Report License?
This license type is based on the total expense reports submitted over 12 months. Organizations can only use a fixed number of reports; exceeding this count requires additional licenses.

What does an FTE Student License cover?
The FTE (Full-Time Equivalent) Student License applies to educational institutions. It includes all full-time students and accounts for part-time students as a percentage of an FTE. This helps determine the number of licenses required for the software.

What are PeopleSoft Licensing Prerequisites?
Certain PeopleSoft modules require other PeopleSoft products to function. For example, PeopleSoft eSettlements needs PeopleSoft Financials. Understanding prerequisites helps ensure all necessary licenses are covered.

What is included with PeopleSoft PeopleTools?
A restricted-use license for PeopleTools is bundled with PeopleSoft applications. This includes components like Application Server, Database Server, and reporting tools like Oracle BI Publisher.

What search capabilities come with PeopleSoft PeopleTools?
PeopleTools includes HP Autonomy’s Verity Developer Kit for text searches and Oracle Secure Enterprise Search, both of which are restricted to use within PeopleSoft applications.

Can Oracle WebLogic Server be used outside PeopleSoft applications?
No. The Oracle WebLogic Server license bundled with PeopleSoft PeopleTools is restricted to PeopleSoft products only. A separate license is required for non-Oracle applications.

What are the licensing requirements for PeopleSoft Grants?
PeopleSoft Grants requires licensing for PeopleSoft Financials, Project Costing, and Contracts. Each module depends on other components, making prerequisite management vital for compliance.

What happens if my organization exceeds the licensed number of Expense Reports?
If you exceed the number of expense reports allowed within 12 months, you must purchase additional licenses to cover the extra reports. Monitoring usage is crucial to avoid compliance issues.

How does the Employee License apply to contractors and consultants?
The Employee License counts all individuals, including contractors and consultants, who access or are tracked by the software. If you outsource a function, these third-party staff must also be included in the count.

What are Monitored Users in PeopleSoft?
Monitored Users are individuals tracked by analytics programs installed on the server. Depending on the software being monitored, such as E-Business Suite or other PeopleSoft applications, these users are counted differently.

Do PeopleSoft licenses include Oracle BI Publisher for reporting?
Yes, Oracle BI Publisher is included with PeopleTools at no additional cost. It is used for online and scheduled reporting within licensed PeopleSoft applications. You can create or modify reports using data from PeopleSoft.

How does the licensing for PeopleSoft Order Management work?
PeopleSoft Order Management requires licenses for PeopleSoft Inventory. Understanding these dependencies ensures proper licensing and avoids compliance issues.

What restrictions are there for PeopleTools Database Server usage?
PeopleSoft PeopleTools Database Server includes integration with Oracle Transparent Database Encryption (TDE). However, TDE is a separate licensed product, and its use outside PeopleSoft must adhere to Oracle’s terms.

How do licensing metrics apply to outsourcing scenarios?
If you outsource a business function, you must account for all the external company’s employees, contractors, and agents who use or access PeopleSoft programs. This can significantly impact the total number of licenses required.

What prerequisites are needed for PeopleSoft Treasury?
PeopleSoft Treasury requires PeopleSoft Financials or PeopleSoft Cash Management. Ensuring all prerequisites are licensed will avoid compliance issues during an audit.

Is there a separate license for the PeopleSoft PeopleTools Starter Kit?
Yes, the PeopleSoft PeopleTools Starter Kit is available for up to five named users. It allows the development of applications with up to 20 components, but the license is for internal data processing only and cannot be distributed or marketed.

Can I use Oracle Secure Enterprise Search outside PeopleSoft?
No, Oracle Secure Enterprise Search bundled with PeopleSoft is restricted to use within licensed PeopleSoft applications. A separate license is required for any broader usage.

Read more about our Oracle License Management Services.

The #1 Global Oracle Licensing Experts – Redress Compliance

Do you want to know more about our Oracle Advisory Services?