Oracle Licensing

Learn about Key Terms in Oracle Licensing

Key Terms in Oracle Licensing

  • Processor and Named User Plus (NUP) metrics
  • Full Use, Application Specific Full Use (ASFU), and Embedded Software License (ESL) types
  • Oracle Master Agreement (OMA) and Ordering Document
  • Unlimited License Agreement (ULA)
  • License Audit and Compliance
  • Virtualization, Hard and Soft Partitioning
  • Software Update License & Support (SULS)
  • Bring Your Own License (BYOL) and Oracle Cloud Licensing

Introduction to Key Terms in Oracle Licensing

Introduction to Key Terms in Oracle Licensing

Oracle’s licensing model is known for its complexity. It includes a wide array of terms, metrics, and contractual provisions that can be challenging for customers to navigate.

Understanding these key terms is essential for effectively managing Oracle deployments, maintaining compliance, and optimizing software investments.

This comprehensive glossary provides definitions and explanations for the most important terms in Oracle licensing.

License Metrics

  1. Processor: A licensing metric based on the number of processor cores where the Oracle software is installed and/or running. Customers must count all cores on the servers and multiply by a core processor licensing factor published by Oracle.
  2. Named User Plus (NUP): A metric that licenses software based on the number of individuals authorized to use the Oracle software, regardless of whether they are actively using it at any given time. Minimums apply per processor.
  3. Application User: A metric used for Oracle Applications that counts the number of individuals authorized to use the application programs, regardless of whether they are actively using them.
  4. Employee: A metric that counts all of the customer’s full-time, part-time, and temporary employees, agents, contractors, and consultants who have access to or are tracked by the Oracle software.
  5. $M Cost of Goods Sold: A metric used for some Oracle application products, where the number of licenses is determined by the customer’s cost of goods sold in millions of dollars.

License Types

License Types
  1. Full Use: A license type that allows the use of Oracle software without restrictions on functionality.
  2. Application Specific Full Use (ASFU): A restricted license type that allows Oracle software to be used only with a specific third-party application.
  3. Embedded Software License (ESL): A license type that allows the use of Oracle software only for embedding into a specific application, with restrictions on installation, packaging, and access.

Contractual Terms

  1. Oracle Master Agreement (OMA): The primary agreement governs the general terms, conditions, and usage rights for all Oracle products and services a customer purchases.
  2. Ordering Document: A document specifies the products, quantities, and metrics for a specific Oracle purchase, along with any unique terms that apply to that order.
  3. Unlimited License Agreement (ULA): A time-bound contract that allows unlimited deployment of certain Oracle products for a fixed fee, typically over a 1-5-year term.

Compliance and Audit

  1. License Audit: An official review conducted by Oracle to compare a customer’s software usage and deployment against their purchased licenses and contract terms.
  2. Certification provides Oracle with a signed statement verifying the customer’s software deployment and usage, typically at the end of a ULA term.
  3. License Compliance: Ensuring that an organization’s Oracle software usage aligns with the terms and conditions of their licensing agreements without any unauthorized or over-deployment.

Technical Concepts

Technical Concepts
  1. Virtualization: Technologies that allow running multiple virtual machines on a single physical server. Oracle’s licensing policies often require counting all physical cores, with some exceptions for approved hard partitioning.
  2. Hard Partitioning involves splitting a server into separate physical segments, which can sometimes allow licensing only the partitions running Oracle software.
  3. Soft Partitioning: Dividing a server using virtualization or operating system functionality generally does not reduce Oracle license requirements.
  4. Core Processor Licensing Factor: A multiplier value defined by Oracle for different processor types, used to determine the number of processor licenses required based on the core count.

Support and Maintenance

  1. Software Update License & Support (SULS): Oracle’s term for the annual maintenance and support services that provide access to software updates, patches, and technical support.
  2. Sustaining Support: This limited form of support is available for older Oracle product versions that are no longer eligible for premier support. It provides access to existing patches and resources but no new updates or bug fixes.
  3. Matching Service Levels: The requirement that all licenses for a given Oracle product must maintain the same level of technical support, either premier or sustaining.

Cloud Licensing

  1. Bring Your Own License (BYOL): An option that allows customers to use their existing Oracle software licenses in authorized cloud environments, such as Oracle Cloud, Amazon Web Services, or Microsoft Azure.
  2. Oracle Cloud Licensing: Oracle’s specific licensing models and metrics for deploying software in the Oracle Cloud may differ from on-premises licensing.
  3. Oracle Compute Unit (OCU): A metric used for licensing certain Oracle products in the Oracle Cloud based on the number of OCPUs (Oracle Compute Processing Units) consumed.

Miscellaneous Terms

Miscellaneous Terms
  1. License Migration: The process of upgrading or converting Oracle licenses from one product edition or metric to another, such as Standard Edition to Enterprise Edition or NUP to Processor.
  2. License Minimum: The minimum number of licenses must be purchased for a given Oracle product, regardless of usage or deployment.
  3. Failover Environment: A standby or backup environment for disaster recovery generally requires full licensing unless specific exemptions apply.
  4. Batching: The use of batching or multiplexing to reduce the number of devices or users directly accessing Oracle software, which does not reduce the licensing requirements.


Oracle’s licensing model encompasses various terms, metrics, and contractual provisions that govern how customers can deploy, use, and manage Oracle software.

Understanding key terms, from core metrics like Processor and NUP to technical concepts like virtualization and partitioning, is essential for making informed licensing decisions and maintaining compliance.

By familiarizing themselves with this glossary and staying current with Oracle’s licensing policies, customers can more effectively navigate the complexities of Oracle licensing.

Investing in ongoing education, proactive license management, and strategic planning can help organizations optimize their Oracle investments while minimizing compliance risks.

With a solid grasp of these key terms and a commitment to best practices, customers can unlock the full value of their Oracle deployments and confidently navigate the dynamic world of Oracle licensing.


  • Fredrik Filipsson

    Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, enhancing organizational efficiency.

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