Oracle ASFU License – How Does It Work?

What is an Oracle ASFU License?

• Allows ISVs to build and sell solutions using Oracle technology.
• The end customer is the license owner.
• Requires Oracle Partner Network membership.
• Must sign specific distribution agreements.
• It can only be used with the specified third-party application.
• Third-party applications must be commercially available.
• ISVs provide technical support for Oracle software.

Oracle ASFU License

Oracle’s Application-Specific Full Use (ASFU) licensing is a specialized Oracle license model used by Independent Software Vendors (ISVs) to bundle Oracle software (like databases or middleware) with their applications.

It offers enterprises a cost-effective way to use Oracle technology exclusively within a vendor’s solution, typically at a steep discount, but comes with strict usage limitations and compliance considerations.

This advisory provides an overview of Oracle ASFU licensing, its benefits and risks, pricing structure, and practical guidance for both ISVs and end customers in managing and negotiating these licenses.

Read more about Oracle license models.

What is Oracle ASFU Licensing?

Oracle ASFU Defined:

Application-Specific Full Use (ASFU) is a licensing program that enables ISVs (Independent Software Vendors) and OEM (Original Equipment Manufacturer) partners to resell Oracle software licenses alongside their proprietary applications.

Unlike a standard Oracle license, which a customer can use for any purpose, an ASFU license is tied to a specific application – it permits use of Oracle software only to run the vendor’s solution named in the agreement.

End customers cannot purchase ASFU licenses directly from Oracle; they obtain them through the ISV as part of the overall solution package.

How It Works:

The ISV enters into Oracle’s partner program (Oracle Partner Network) and signs an ASFU distribution agreement to embed Oracle technology (e.g., Oracle Database, WebLogic server) into their product. The ISV then sells its application to customers, including the necessary Oracle license.

The end customer becomes the license holder for that Oracle software, but only for use within the ISV’s application.

Typically, the ISV handles first-line support and compliance oversight for the Oracle components, acting as a buffer between the end customer and Oracle.

In essence, ASFU licensing allows a vendor to offer a turnkey solution powered by Oracle, without requiring the customer to separately negotiate a full Oracle license.

Illustration: Oracle ASFU licensing restricts the Oracle database usage to the specific ISV application, essentially “locking” the Oracle software so it can only be used as part of that vendor’s solution.

This model is common in industries where specialized software (ERP systems, healthcare or financial applications, etc.) is built on Oracle Database – the ISV bundles Oracle’s technology. Hence, the customer has everything needed in one purchase, but the Oracle component is locked down to that application’s use case.

Real-World Example:

Imagine a hospital buys a medical records management system from an ISV, and that system uses Oracle Database under the hood. The hospital will receive an Oracle ASFU license for the database as part of the deal.

The license permits the use of Oracle Database solely for the purpose of the medical records application. If the hospital tried to use the same Oracle Database instance for a different home-grown application, it would violate the ASFU agreement.

Suppose the hospital later switches to a different records system (or wants to use Oracle for another purpose). In that case, the ASFU license cannot be repurposed – a new Oracle license or a conversion would be required.

Key Benefits of ASFU for ISVs and Customers

Oracle ASFU licensing can provide significant advantages under the right circumstances.

For ISVs, it enables them to seamlessly incorporate enterprise-class Oracle technology into their software offerings.

For end customers, using a vendor’s solution can simplify procurement and reduce costs. Key benefits include:

• Major Cost Savings: ASFU licenses are heavily discounted compared to Oracle’s standard pricing. ISVs typically receive around a 60% discount off Oracle’s list price for the software. These savings can be passed to customers or used to improve the ISV’s margins. For example, if Oracle Database Enterprise Edition has a list price of $47,500 per processor, an ASFU deal might effectively price it around $19,000 per processor for use only with the ISV’s application. This lower cost of entry makes Oracle-powered solutions more affordable to customers than buying a full Oracle license separately.
• Simplified Licensing & Procurement: End customers get a one-stop solution – the application and the necessary Oracle licenses are bundled together. There’s no need for the customer to negotiate with Oracle or manage a separate license contract. The ISV handles the Oracle paperwork and provides the license as part of the sale. This simplification can shorten procurement cycles and avoid confusion about how to license the underlying database or middleware. It’s a turnkey approach, ideal for organizations that want an out-of-the-box system without having to deal directly with Oracle’s sales process.
• Optimized, Ready-to-Use Integration: Because the Oracle software is pre-packaged by the ISV for a specific use, it’s often pre-configured and tested to work optimally with the application. The database or middleware configuration is optimized for the vendor’s solution, resulting in faster deployments and fewer compatibility issues. Customers benefit from knowing that the Oracle component has been vetted to support the application’s requirements. In essence, ASFU offers a fully integrated stack (application + Oracle technology) designed to work together seamlessly from day one.
• Vendor Value-Add: From the ISV’s perspective, bundling Oracle can enhance the value proposition of their software. They can market their product as being built on Oracle’s reliable technology, which is attractive to enterprise buyers. The ASFU model also enables ISVs to control the total cost and pricing of their solutions. Additionally, ISVs often handle support (level 1 support) for the Oracle elements, which allows them to provide a more cohesive support experience to their customers without immediately involving Oracle.
• Focused Scope Reduces Unneeded Spend: If an organization only needs Oracle technology within the context of one packaged application, ASFU prevents them from over-licensing. They pay for Oracle use in that solution only, rather than a full-use license that might be underutilized. This fits well for specialized use-cases – for instance, a company that only uses Oracle Database as part of an ISV’s CRM system doesn’t have to invest in a general Oracle license that could be used enterprise-wide. ASFU is a purpose-fit license, which can be more cost-effective when you truly only need Oracle for that one vendor product.

Limitations and Risks of ASFU Licensing

Despite the benefits, ASFU licenses come with important limitations and potential risks. Both ISVs and end customers must be aware of these constraints to avoid costly mistakes. The trade-off for the cost savings is reduced flexibility.

Key limitations and risk areas include:

No Unilateral Upgrades or Changes:

ASFU licenses are tied not just to an application but often to a specific version or configuration. Suppose the ISV’s solution upgrades to use a new version of Oracle software. In that case, you typically need to get that covered under the ASFU agreement (usually the ISV coordinates this with Oracle).

You can’t independently upgrade the Oracle database to a new edition or migrate it to a different platform without involvement from the vendor and possibly Oracle’s approval. Additionally, ASFU does not automatically grant rights to new Oracle features or products that fall outside the original scope of the license. This differs from a full-use license, which grants broad rights to any version (as long as support is available).

Therefore, technical flexibility is limited – any significant change in how Oracle software is used must be approved by the vendor and remain within the contract’s allowances. Independent of the bundled ISV solution.

Moving ASFU licenses between internal projects or departments without the original ISV application is prohibited.

Restricted Usage Scope:

An ASFU license can only be used for the specific application defined in your contract. The Oracle software (e.g., the database) is legally bound to run only the ISV’s solution. Using it for anything else – even something technically minor, such as running an ad-hoc report with a third-party tool that writes to the database – is a violation of the license.

There is zero flexibility to repurpose the Oracle environment for other projects, integrations, or custom applications beyond what the ISV provides.

If an end user deploys additional modules or tries to connect another system to the Oracle database outside of the allowed methods, they risk non-compliance. In short, ASFU is a “single-purpose” license: great for that one purpose, but nothing outside of it.

No Mixing with Other Oracle Licenses:

You generally cannot mix ASFU-licensed Oracle software with other Oracle licenses in the same environment. For example, you shouldn’t have an Oracle database instance that is partly licensed under ASFU for one application and partly under a full-use license for another – that scenario can become a compliance nightmare.

The ASFU environment should remain isolated to the specific application. If your organization also has other Oracle licenses, keep those deployments separate from any ASFU-licensed installations.

Mixing license types or using ASFU licenses alongside standard licenses on the same servers can inadvertently breach Oracle’s policies.

Vendor Dependency and Lock-In:

The Oracle license is effectively tied to your relationship with the ISV, making it difficult to switch to another vendor. If you change or discontinue the vendor’s application, the included Oracle license cannot be transferred for general use.

This could leave you in a lurch: for instance, if you invest in an ASFU license as part of a software package and later the vendor goes out of business (or you decide to switch to a different software solution), your Oracle license rights end with that application’s use. You can’t continue to use the Oracle software independently.

This creates a form of lock-in – you’re partially reliant on the vendor’s longevity and support. End customers need to plan for what happens to the data and the database if the relationship ends. (Typically, you’d need to migrate to a full Oracle license to keep using Oracle DB for those datasets.)

Support Limitations:

Under ASFU, Oracle’s support team is not directly available to you as an end customer. Instead, all support requests must be directed to the ISV who sold you the solution. The ISV is responsible for triaging and resolving issues related to the Oracle software within their application. Only if the issue is truly Oracle-specific and beyond the ISV’s capability will the ISV escalate to Oracle (and the ISV pays Oracle a support fee for that privilege).

This means that the quality and speed of support you receive for database or middleware problems depend on the vendor’s expertise. If the ISV has a strong support organization, this may be fine, but if they are slow or lacking Oracle knowledge, it could frustrate the end user.

You also don’t have direct access to Oracle’s patches or support knowledge base except via the vendor. In enterprise settings where uptime is critical, this indirect support model can pose a risk if not effectively managed by the vendor.

Compliance and Audit Risk:

While Oracle ASFU licensing is intended to simplify things, it does not eliminate audit risk – it just changes its nature. Oracle reserves the right to ensure that its software is used by the agreed-upon terms. Using an ASFU license beyond its intended scope (even unintentionally) can lead to compliance issues and potentially result in hefty back-license fees or penalties.

For example, suppose an end customer connects unauthorized third-party tools that write data to an ASFU-licensed Oracle database, and Oracle discovers this. In that case, the customer may be required to purchase full-use licenses retroactively for the usage in question. One noteworthy aspect, however, is that Oracle’s audit focus with ASFU often targets the ISV rather than the end customer.

In many ASFU arrangements, Oracle will audit the ISV’s adherence to the program (checking that the ISV’s customers are only using Oracle within the allowed bounds) instead of auditing each end customer.

This can shield end users from direct audit engagement. However, if non-compliance is found, it will still impact the end customer (e.g., loss of usage rights or needing to quickly license properly), and the ISV may pass through costs or penalties.

In summary, ASFU reduces the likelihood of Oracle auditing you (the end user) directly. However, you must still vigilantly adhere to the usage rules to avoid triggering problems via the ISV or Oracle.

Pricing and License Models

One of the main appeals of ASFU licensing is its pricing advantage.

Understanding how pricing and licensing metrics work under ASFU helps both ISVs and customers negotiate more favorable deals and plan their costs effectively.

• Heavily Discounted Pricing: Oracle ASFU licenses are typically offered at a significant discount compared to Oracle’s standard list prices. A discount of 60% off the list price is common (the exact percentage may vary by agreement, deal size, and product, but it’s a ballpark). In practice, this means the ISV acquires the Oracle software for a fraction of the normal cost and can bundle it into their solution’s price. For instance, if a standard Oracle license for a database would cost $100,000 for a certain deployment, the ASFU equivalent might cost the ISV only about $40,000. This built-in discount is Oracle’s incentive for partners to use its technology in their solutions. The ISV may pass some of these savings on to the customer, so the customer might pay, for example, $60,000 for the embedded Oracle license (the ISV could retain some margin). The net result is still a better price than the customer buying a full-use license directly. Important: These discounts are applicable because usage is restricted. If the customer later wishes to “unlock” the license for broader use, they should expect to pay the difference (and possibly an additional fee).
• Standard Metrics – Processors or Named Users: ASFU licenses typically utilize the same metrics as standard Oracle licenses. The two common metrics are Processor (per CPU core, with Oracle’s core-factor calculations for multi-core CPUs) or Named User Plus (NUP), which is per authorized user (with Oracle’s usual minimums per processor). The difference is who manages the count and purchase. In ASFU, the ISV is responsible for sizing the required Oracle licenses based on the deployment. For example, if the ISV’s application will run on a server with eight processor cores, the ISV will include 8 Oracle processor licenses (adjusted by Oracle’s core factor) in the package. Alternatively, if licensing is based on users, the ISV will specify the number of named users the customer is permitted to have for that system. The cost to the customer is typically rolled into the application’s price or listed as a separate line item at the discounted rate. From the end-user perspective, you should ensure the license metrics and quantities are spelled out in your agreement with the ISV so you know what capacity you’re entitled to (e.g., “up to X users” or “deployment on Y processors”).
• Royalty-Based Model: In some cases, Oracle offers an alternative ASFU model where the ISV doesn’t license to users or processors at all, but rather pays Oracle a royalty based on sales. In a royalty model, the ISV reports its sales of the solution to Oracle and pays a percentage of each sale that includes Oracle technology. The percentage may vary, but this model simplifies things for ISV customers – they don’t even see a separate Oracle license count. It’s effectively an unlimited usage of Oracle within that product, but constrained by the product itself and the ISV’s reporting. This model can be attractive for ISVs with a software-as-a-service pricing or where counting users/CPUs is cumbersome. For customers, this means that your pricing is based solely on the application subscription or fee (with Oracle embedded), rather than a separate license calculation. However, the royalty costs the ISV pays will still be baked into your price in some way.
• Support Fees: Typically, when Oracle provides a software license directly, customers pay an annual support fee (~22% of license cost) for updates and support. In the ASFU scenario, Oracle charges the ISV a reduced support fee (often around 19% of the ASFU license cost) to allow the ISV to receive patches and backend support from Oracle. The ISV may incorporate this cost into the overall maintenance or support fees they charge you. It’s useful for customers to ask how Oracle support is handled financially. Some ISVs may bundle the first year of Oracle support into the price and then charge a recurring maintenance fee that covers both their application and the Oracle support portion. Please note that support for the Oracle software is not free; it’s simply routed differently. Over multiple years, factor in that you’ll likely be paying the ISV annually for “support and maintenance,” which indirectly includes Oracle’s support as well.

Below is a comparison table of ASFU versus other Oracle license types to highlight key differences:

Note: ESL (Embedded Software License) is even more restrictive than ASFU – the Oracle technology is completely integrated and invisible in the ISV’s product (the customer might not even realize Oracle is inside).

ASFU and ESL are similar in that both are application-bound; ESL is usually used in appliances or software that cannot be used outside a closed system.

ASFU is more common when the end customer is aware they have an Oracle database included and might even manage it. Still, contractually, they acknowledge it’s only for the one application.

Upgrading to Full Use: If an end customer eventually needs to use Oracle beyond the ASFU restrictions, Oracle provides a path to convert ASFU licenses to full-use licenses.

This is not automatic and usually involves paying the difference in license fees (essentially forfeiting the discount) and possibly an additional fee.

In practice, the customer would coordinate with Oracle (often via the ISV) to purchase or upgrade to a normal Oracle license.

For example, if you have an ASFU license that was 60% off, upgrading it might mean paying the remaining 40% of the list price (and then Oracle would likely issue a new license contract without the application restriction).

The exact terms of conversion should be reviewed – sometimes contracts allow for an upgrade credit for what has already been paid.

Planning for this scenario is wise: if there’s any chance you’ll outgrow the ISV’s solution or want to directly control the Oracle software, discuss upfront what the conversion process and costs would look like.

Read Managing Oracle ASFU License Compliance and Avoiding Pitfalls.

Considerations for ISVs and End Customers

For ISVs (Independent Software Vendors): If you are an ISV incorporating Oracle into your product, ASFU licensing can enhance your offering, but it requires careful management.

Key points for ISVs:

• Program Requirements: You must be an approved Oracle partner (Oracle PartnerNetwork member) and sign Oracle’s Application Specific Full Use Program Distribution Agreement. Additionally, each software application you offer with an ASFU license needs to be registered with Oracle. Ensure you are prepared for the administrative overhead – Oracle will expect accurate tracking of where licenses go and that you only sell ASFU licenses with approved applications that are made commercially available to multiple customers.
• Choose the Right License Model: Decide between the standard model (user or processor-based licensing) versus a royalty model. The standard model is straightforward if you know the size of each deployment; the royalty model can simplify sales if you have many small customers or a subscription model, as it ties Oracle’s costs to your revenue. Consider your pricing strategy and customer base when making a choice.
• Draft Broad Application Definitions: When negotiating the terms with Oracle (and defining the “application” in the contract), avoid descriptions that are too narrow. If the scope of your solution is described very tightly, any future expansion or additional modules might fall outside the license scope and force a contract change. A broader definition (while still clearly an application) gives you and your customers more wiggle room to evolve the product without immediately breaching the license terms. For example, instead of naming the module “Finance Reporting Module v2.0 only,” define it as “XYZ Finance Application Suite,” which could cover future versions or sub-modules.
• Support Obligations: As an ASFU reseller, you are the primary point of contact for resolving Oracle software issues in your client deployments. This means investing in your support team’s Oracle expertise. Have clear processes to escalate to Oracle (through your partner support channels) for complex issues, and communicate to customers how support will work. You’ll also be paying Oracle an annual support fee for the licenses (usually a percentage of the license cost), so factor that into your pricing and margins. Many ISVs incorporate the cost of Oracle support into their overall maintenance fees, which are then charged to customers.
• Compliance Management: Oracle will hold you (the ISV) accountable for ensuring customers stick to the usage terms. It’s prudent to actively monitor and remind customers about what is allowed. Some ISVs even include technical controls within their software to prevent the use of the Oracle database outside the application (for example, restricting direct database access). Maintain good documentation of the licenses you’ve distributed and how each customer’s usage aligns with the contract. Oracle can audit your company to verify compliance, so treat internal compliance audits and record-keeping as a part of your risk management. If Oracle finds you’ve allowed misuse (even unknowingly), you might face penalties or need to license those deployments properly at your cost.

For End Customers: If you are a customer purchasing a solution that comes with an Oracle ASFU license, keep these considerations in mind:

• Understand the Boundaries: Ensure you have a clear understanding of what the ASFU license permits and prohibits in your specific context. Ask the vendor to document (in the contract or order form) that the Oracle software is licensed only for use with their application. This is usually stated, but as a customer, you should acknowledge it internally. In practice, this means that your IT teams should not use the Oracle database for anything other than its intended purpose – not for additional reporting databases, not for integration with another application (except possibly read-only data export via approved methods), and not for custom extensions unless specifically permitted. Treat it as a dedicated black-box component of the vendor’s system.
• Clarify Audit Responsibility: During negotiation, discuss what happens in case of a license compliance audit. Oracle tends to audit the ISV for ASFU usage, but you want to be protected in case an audit finds your usage non-compliant. Ensure your contract with the ISV specifies who is liable if, say, an audit reveals overuse or misuse. Some ISVs might take on that liability (since they’re the ones who resold the license), but others might push it onto the end customer via the license agreement you sign. It’s important to have this clarity: you don’t want surprise costs if Oracle comes knocking. Ideally, the vendor should be responsible for defending and resolving any Oracle audit issues related to the ASFU license they sold you.
• Plan for the Future: Consider your long-term roadmap in conjunction with the vendor’s application and Oracle technology. If there’s a chance you’ll need direct use of Oracle or if you might switch solutions in a few years, factor that into your strategy. For example, if you suspect you’ll outgrow the vendor’s system but still want to use Oracle database with a new system, it might be smarter to negotiate a transition clause now. Consider negotiating an option that allows you to convert the ASFU license to a regular Oracle license at a predetermined cost, if needed. At minimum, know the process: if you end the vendor relationship, will you lose rights to the Oracle software immediately? How long do you have to transition your data? These are crucial for business continuity – you may need to budget for new Oracle licenses or future migrations.
• Vendor Support SLAs: Since you rely on the ISV for Oracle support, ensure their support service level agreements (SLAs) meet your needs. Treat Oracle issues as part of the overall support package from the vendor. If your operations are 24/7, does the vendor offer 24/7 support for critical database incidents? Get commitments on things like patching: Oracle releases critical security patches quarterly – will the vendor apply them promptly for you? Essentially, hold the vendor to high standards because any Oracle-related downtime will still impact your business, even if Oracle isn’t supporting you directly.
• Avoid DIY Customization: With an ASFU-licensed environment, resist the temptation to perform heavy customization on the Oracle side (such as writing custom stored procedures or adding new schemas for unrelated data). Not only could this violate the usage terms, but it also complicates support – the vendor might refuse to support issues if you’ve altered the Oracle environment beyond approved use. Use the application as intended. If you have additional needs, work with the vendor to determine if they offer extensions or if you require a separate Oracle environment (with a full license) for these purposes.

Read Negotiating Oracle ASFU License Agreements – Key Strategies.

Recommendations

Considering the characteristics of Oracle ASFU licensing, here are practical recommendations for organizations and ISVs to navigate this model effectively:

• Keep Usage Within Scope: Treat ASFU-licensed Oracle installations as dedicated to the vendor’s application only. Establish internal policies to prevent other teams or projects from accessing the Oracle database for any purpose outside the allowed application. Regularly communicate these boundaries to your IT staff to avoid unintentional compliance breaches.
• Document License Terms Clearly: Maintain copies of your agreement that show the ASFU license specifics. Ensure the contract explicitly names the application and version to which the Oracle license is tied. This documentation will be vital for compliance reviews or when personnel change – everyone should be aware of the permitted use case.
• Monitor and Audit Your Usage: Although Oracle may audit the ISV, you, as a customer, should conduct periodic internal audits to ensure the Oracle software is being used effectively. Verify that no unauthorized third-party reporting tools, integrations, or extra applications have hooked into the system. If you find any, address them immediately (e.g., remove them or get proper licensing). Proactive self-auditing can catch issues before they become costly problems.
• Negotiate Support and Liability Clauses: When finalizing contracts with an ISV offering an ASFU solution, negotiate terms related to support and liability. For support, make sure the vendor’s support obligations for the Oracle component are clearly defined (response times, update frequency, etc.). For compliance, it’s wise to include a clause that the ISV will assist or indemnify you in case of any Oracle licensing audit findings related to the ASFU usage, since the ISV has the primary relationship with Oracle.
• Have an Exit Strategy: Plan for how you would handle things if you needed to leave the vendor’s solution. Before committing, ask: What if in 3-5 years we want to switch systems or use Oracle beyond this app? The plan might involve migrating data out and decommissioning the Oracle software (incurring no further Oracle costs if the application is dropped), or it might involve converting the ASFU license to a full-use Oracle license. Knowing the steps and potential costs in advance will help avoid panic later. If possible, negotiate a conversion option upfront, or at least obtain a written assurance that Oracle will offer you a fair upgrade path if needed.
• For ISVs – Proactively Manage Compliance: If you are the ISV, build compliance checks into your deployment process. Instruct customers (in documentation and verbally) about what they can and cannot do with the Oracle software. It may even be helpful to include technical controls – for example, don’t expose Oracle database credentials to the customer if they are not needed, or provide an API so they don’t attempt direct database access. The easier you make it for customers to “do the right thing,” the lower your risk of a compliance breach that could come back to bite you in an Oracle audit.
• Stay Informed of Oracle Policy Changes: Oracle’s licensing programs are subject to change. ASFU terms may be updated, or Oracle may introduce new options (for example, cloud-specific ASFU arrangements). Both customers and ISVs should stay in touch with Oracle’s partner representatives or licensing experts to keep current. Suppose Oracle changes something (say, a new version of the database with different licensing implications for ASFU). In that case, you’ll want to know early so you can adapt your contracts or usage accordingly.

Checklist

Use this quick checklist to ensure you’ve covered the bases when dealing with Oracle ASFU licensing:

• Verify Application Scope: Confirm that the Oracle ASFU license you’re using is explicitly associated with the intended software application. Double-check the contract language to ensure the named application matches the one you are using.
• Communicate Restrictions: Inform your IT administrators and users that the Oracle software is for restricted use. Clearly label the systems or add notes in system documentation: e.g., “Oracle Database – Licensed for use only with XYZ Application (ASFU License).” This helps prevent well-meaning but risky uses.
• Confirm Support Arrangements: Ensure you know how to get support for the Oracle component. Have the ISV’s support contact information handy and understand the process for escalating urgent Oracle issues. If there are critical patches (security fixes), confirm the vendor’s plan to apply them in your environment.
• Review Compliance Periodically: Schedule an internal review (at least annually) of your usage of the vendor’s application and included Oracle software. This should include verifying that you haven’t exceeded any user counts (for NUP licenses) or changed hardware (for processor licenses) beyond what is licensed, as well as ensuring no unauthorized usage.
• Prepare for Transitions: If there’s any indication you might migrate away from the current vendor or need a broader Oracle license, start discussions early. Know whom to contact (either Oracle or a licensing partner) to handle a conversion. Keep a record of what you’ve paid for the ASFU licenses – this can be useful when negotiating credits if you convert to full use.

FAQ

Q1: What exactly is an Oracle ASFU license, and who can use it?
A: Oracle’s Application-Specific Full Use (ASFU) license is a type of license sold through Oracle partners (ISVs/OEMs), not by Oracle directly to customers. It allows an end customer to use Oracle software (like a database) only as part of a specific third-party application. Essentially, it’s for software vendors who want to incorporate Oracle technology into their products. End customers can use the Oracle software but only within that vendor’s solution – they can’t use the license independently for other purposes.

Q2: How is ASFU different from a standard Oracle license (full use license)?
A: A standard Oracle “full use” license gives you the right to deploy Oracle software for any internal use, across any applications (with no usage restriction aside from complying with general terms). You typically purchase it directly from Oracle or an authorized reseller and receive support directly from Oracle. In contrast, an ASFU license is restricted to one specific application; it’s purchased through an ISV along with their software. Additionally, ASFU is typically more affordable (due to its limited scope) and requires you to contact the vendor for support or assistance with any issues. Think of full use as owning a car you can drive anywhere, whereas ASFU is like a special vehicle that can only operate on one designated track (the vendor’s application).

Q3: Are ASFU licenses cheaper than regular Oracle licenses? What’s the cost advantage?
A: Yes, one big reason ASFU licenses exist is the cost benefit. Oracle heavily discounts ASFU licenses – often on the order of 50-70% off the normal price. The exact discount can vary, but it’s substantial. For example, suppose a particular Oracle Database edition costs $10,000 per processor under a full license. In that case, the ASFU version for that same product might be approximately $4,000 per processor (pricing provided by the ISV). This discount reflects the limited usage. It can make solutions more affordable for end users since you’re not paying full price for the Oracle component. However, remember that if you ever need to move to a full-use license, you’ll have to pay the difference. Also, the ISV may charge you for support on top of the license cost (just as Oracle would with a normal license). Still, in almost all cases, the total cost of an ASFU license + support through the ISV will be significantly lower than the equivalent direct Oracle license + support.

Q4: What are the main limitations of using an ASFU license as a customer?
A: The main limitation is loss of flexibility. With an ASFU license, you can’t use the Oracle software for anything except the vendor’s application. You cannot integrate other systems into the Oracle database unless possibly through approved, read-only means. You also rely on the vendor for support – you can’t call Oracle directly if there’s an issue or performance problem; you must work through the ISV. Additionally, you are effectively tied to the vendor’s roadmap. For example, if Oracle releases a new version with great features, you can’t upgrade unless your vendor supports it under the ASFU agreement. Finally, if you stop using the vendor’s software, your right to use the Oracle software ends – you can’t take that Oracle database and keep using it stand-alone for something else. In summary, ASFU licenses are highly constrained: ideal for a contained use case, but not suitable if you need to repurpose or extend Oracle software beyond the original application.

Q5: What happens if we want to switch systems, or the vendor’s application is retired? Can the ASFU license be transferred or converted to another license?
A: An ASFU license cannot be transferred to another application or vendor. If you stop using the ISV’s software, technically, you lose the right to use the Oracle software that was licensed under the ASFU for that solution. It’s tied to that specific application. In this scenario, you have a couple of options: (1) If you no longer need Oracle at all (maybe the new system uses a different database), then you can simply decommission the Oracle software along with the old application, and there’s no further obligation. (2) If you do want to keep using Oracle Database (for example, to preserve your data or because your new solution also can run on Oracle), you will need to contact Oracle or a reseller to purchase a proper license or convert the ASFU license. Oracle typically credits a portion of the ASFU payment towards a new full-use license. Essentially, you’d pay an upgrade fee to remove the restriction. It’s essential to plan this out, coordinating with both your vendor and Oracle. The vendor can help facilitate an upgrade if you’re transitioning away, or you can work directly with Oracle’s sales/licensing team to negotiate a fair conversion. Just don’t assume you can keep running Oracle outside the agreed use – that would put you out of compliance.

Read about our Oracle Licensing Assessment Service.

Would you like to discuss our Oracle Advisory Services with us?

Please enable JavaScript in your browser to complete this form.

Name *

First

Last

Email *

Message *

Submit