Oracle Licensing

Oracle EbS Licensing: Best Practices

How does Oracle EBS licensing work?

  • Identify all authorized users for EBS programs.
  • You can choose between the Concurrent User License, Professional User License, Component License, Custom Application Suite License, and Enterprise License models.
  • Enterprise metrics-based licensing considers the organization’s size, such as employee count and revenue.
  • Regularly update user access and perform data cleanups to ensure compliance.

Introduction to Oracle EBS Licensing

Overview of Oracle Enterprise Business Suite (EBS) Oracle Enterprise Business Suite (EBS) is a comprehensive suite of integrated business applications designed to help organizations manage various business processes. It includes modules for financial management, supply chain management, human resources, and more.

Importance of Understanding EBS Licensing for Compliance and Cost Management Understanding Oracle EBS licensing is crucial for ensuring compliance with Oracle’s policies and managing costs effectively. Proper licensing helps avoid costly audits and penalties while optimizing the use of Oracle software within your organization.

Oracle EBS Licensing Models

Oracle EBS Licensing Models

Explanation of Different Licensing Models Oracle EBS offers several licensing models to accommodate various organizational needs. Understanding each model is essential for choosing the right one for your business.

Concurrent User License

  • Description: Licenses are based on the maximum number of users accessing the system simultaneously.
  • Ideal For: Organizations with users working in shifts, allowing efficient license utilization.

Professional User License

  • Description: Requires licenses for individuals authorized to use the applications.
  • Requirements: Typically includes a minimum percentage of the employee population.
  • Ideal For: Small and medium-sized companies expanding their Oracle footprint.

Component License

  • Description: Separate licenses for each EBS module.
  • Advantages: Flexibility to license only the needed components.
  • Considerations: Tailored licensing metrics for each product.

Custom Application Suite License

  • Description: Customizable license bundles based on specific organizational needs.
  • Advantages: Streamlined licensing for multiple modules.
  • Ideal For: Organizations standardizing on Oracle with diverse module requirements.

Enterprise License

  • Description: All-inclusive license based on company metrics like revenue and employee count.
  • Advantages: Simplifies licensing for large organizations with extensive Oracle use.
  • Considerations: Not based on the actual number of users or systems.

By understanding and selecting the appropriate Oracle EBS licensing model, organizations can better manage their software assets, ensure compliance, and optimize costs. Regular reviews and updates of user access and licensing metrics are essential for maintaining compliance and maximizing the value of Oracle EBS investments.

Managing Authorized Users

Identifying All Authorized Users Regardless of Actual Usage

  • Scope: Identify everyone authorized to use EBS programs, including full-time employees, part-time employees, contractors, and consultants, regardless of active usage.
  • Compliance: Properly licensing all authorized users helps avoid compliance issues during audits.

Regular Updates and Data Cleanups to Maintain Compliance

  • Process: Regularly update user access, adding new users and removing those who no longer need it.
  • Routine Maintenance: Perform data cleanups, and end-date users no longer require access to maintain compliance and reduce unnecessary licensing costs.

Importance of Licensing for Any Individual Authorized to Use the Software

  • Requirement: All authorized users must have valid licenses even if not actively using the software.
  • Audit Readiness: Ensuring all users are licensed prevents compliance issues during audits.

Enterprise-Wide Licensing

Enterprise-Wide Licensing

Licensing Based on Enterprise Metrics Such as Employee Count and Revenue

  • Model: Licensing is based on organizational size metrics like employee count and revenue, not the number of users or systems.
  • Applicability: Suitable for large organizations with extensive deployment needs.

Annual Reporting to Avoid Non-Compliance

  • Procedure: Perform annual reporting to ensure compliance with Oracle’s licensing policies.
  • Growth Tracking: Helps track organizational growth and keeps licensing metrics up-to-date to avoid non-compliance issues.

Applicability to Other Oracle Products Like PeopleSoft, JD Edwards, and Siebel

  • Coverage: Enterprise-wide licensing applies to Oracle EBS and other Oracle products, such as PeopleSoft, JD Edwards, and Siebel.
  • Unified Management: Understanding this model’s applicability across different products helps manage licenses effectively and ensures compliance across all deployed Oracle software.

The Evolution of Oracle EBS Licensing Models

The Evolution of Oracle EBS Licensing Models

Historical Perspective on Changes in EBS Licensing Models

  • Concurrent User License: Initially based on peak concurrent usage of all users. Beneficial for global companies with different shifts.
  • Professional User License: Targeted small and medium-sized companies. Required licenses for at least 10% of the employee population.
  • Component License: Separate license for each module accessed, with distinct metrics for each product.
  • Custom Application Suite License: Allowed custom bundling of modules into a single license model.
  • Enterprise License: Based on company revenues and other factors, not actual usage.

Impact of These Changes on Licensing Strategies

  • Adaptation: Companies had to adapt their licensing strategies to align with new models.
  • Cost Management: Changes affected cost management and compliance efforts.

Understanding Oracle EBS Licensing Metrics

Description of Key Metrics:

  • Concurrent Usage: Measures peak usage of users accessing the system at any time.
  • Professional User: Applied to individuals authorized to use applications on single or multiple servers.
  • Component Application User: Authorized for specific licensed programs on any server.
  • Enterprise License Metrics: Includes metrics like enterprise revenue, operating budget, and cost of goods sold.

Managing These Metrics to Ensure Compliance

  • Monitoring: Regularly monitor and report usage metrics to ensure compliance.
  • Documentation: Maintain accurate records of user access and licensing metrics.

Common License Compliance Risks with Oracle EBS

Common License Compliance Risks with Oracle EBS


  • Not End-Dating Users: Failure to deactivate users who no longer need access.
  • Misassigning Roles: Incorrectly assigning users to roles and responsibilities.
  • Not Meeting Module Prerequisites: Overlooking required prerequisites for certain modules.
  • Minimum Requirements: Ignoring minimum user requirements for some modules.
  • Customizations: Making customizations that trigger full-use licenses without proper licensing.

Potential Consequences of Non-Compliance

  • Financial Penalties: Risk of incurring significant fines and penalties.
  • Audit Findings: Potential for unfavorable audit findings leading to unexpected costs.
  • Operational Disruptions: Compliance issues can lead to disruptions in business operations.


What is Oracle EBS Licensing?
Oracle EBS Licensing determines the licenses needed to use Oracle’s E-Business Suite software, with models including Concurrent User License, Professional User License, Component License, Custom Application Suite License, and Enterprise License.

What are the common licensing models for Oracle EBS?
The common models are Concurrent User License, Professional User License, Component License, Custom Application Suite License, and Enterprise License.

How does the Concurrent User License work?
It measures peak concurrent usage of all users accessing the system at any time, which is suitable for global companies with different shifts.

What is a Professional User License?
Introduced for small and medium-sized companies, this license requires maintaining licenses for at least 10% of the employee population.

What is a Component License?
This model requires a separate license for each module accessed by a user, with distinct metrics for each product.

What is a Custom Application Suite License?
Allows custom bundling of modules into a single license model, counting any user accessing any module in the suite.

What is an Enterprise License?
Based on a company’s size, factors like revenue and employee count should be considered, not actual usage.

Why is it important to identify all authorized users?
To ensure compliance, all individuals authorized to use EBS programs must be identified and licensed, whether they actively use the software or not.

What is the significance of regular updates and data cleanups?
Regular updates and data cleanups help maintain compliance by adding new users and removing those without access, avoiding unnecessary licensing costs.

How does enterprise-wide licensing work?
It is determined by enterprise metrics such as employee count and revenue, independent of user numbers or installation systems.

Why is annual reporting important in enterprise-wide licensing?
Annual reporting ensures that licensing metrics are up-to-date and helps avoid non-compliance.

What are the key metrics in Oracle EBS licensing?
Key metrics include Concurrent Usage, Professional User, Component Application User, and Enterprise License Metrics.

What are common compliance risks with Oracle EBS?
Risks include not end-dating users, misassigning roles, not meeting module prerequisites, and not being aware of minimum user requirements.

What are the consequences of non-compliance?
Consequences can include financial penalties, unfavorable audit findings, and operational disruptions.

What steps can be taken to manage authorized users effectively?
Identify all authorized users, perform regular data cleanups, and ensure every individual authorized to use the software is properly licensed.

How can organizations choose the right licensing model for their needs?
Organizations can choose between models like a concurrent user license and a professional user license by considering the number of users, frequency of server usage, and budget.


  • 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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