Oracle EBS Custom Application Suite Licensing (CAS)

Oracle EBS Custom Application Suite Licensing (CAS)

Oracle E-Business Suite (EBS) Custom Application Suite (CAS) licensing is a flexible model that allows enterprises to bundle multiple EBS application modules under a single, tailored agreement.

By licensing a specific set of needed modules as a single suite, organizations can reduce costs, simplify license management, and avoid paying for unused functionality.

However, CAS licensing still requires careful planning, including choosing the right licensing metric (per user or enterprise-wide), monitoring all users (both direct and indirect), and negotiating terms to ensure cost-effectiveness and compliance.

What is Oracle EBS Custom Application Suite (CAS) Licensing?

Oracle CAS licensing enables an organization to create a custom bundle of EBS modules and license them together, rather than purchasing individual module licenses separately. In a standard EBS license model, if a user needs access to three different modules (e.g., Financials, Procurement, and HR), that user typically requires three separate licenses (one per module).

CAS simplifies this by treating those modules as one suite: you license a Custom Suite User who is entitled to use all included modules. Essentially, CAS is a way to license only the modules you need in one package with unified terms.

This approach differs from purchasing the entire E-Business Suite (which includes all modules) or licensing modules individually. With CAS, Oracle and the customer agree on a specific list of modules to include in the suite.

The result is a tailored EBS bundle aligned to the enterprise’s requirements, usually documented in a single addendum or custom licensing agreement. The CAS agreement specifies:

• Which EBS modules are included in the custom suite (e.g., General Ledger, Accounts Payable, Purchasing, etc.)?
• How the suite is licensed (the metric and number of licenses, such as 300 Custom Suite Users, or an enterprise metric covering all employees).
• Are there any special terms or discounts applied to the bundled purchase?

By bundling, Oracle often provides a cost incentive – the bundled price is typically lower than the sum of individual module licenses would be. The trade-off is that the customer commits upfront to a set bundle of modules and a certain volume of licenses.

Key Features and Metrics of CAS Licensing

Flexible Module Selection:

CAS licensing offers highly flexible module choices. Organizations select only the EBS modules that align with their business processes. For example, a company might bundle Oracle Financials, Oracle Procurement, and Oracle Inventory modules into a single custom suite if those are the only areas required.

This avoids paying for other EBS modules that come with a full suite license but would not be used. It’s a tailored solution: a manufacturing firm might combine Supply Chain and Manufacturing modules, whereas a healthcare provider might bundle Financials and HR modules – whatever combination makes sense for that enterprise.

Unified User Licensing:

Under CAS, licenses are typically based on a unified user count. This is often measured in the Named User Plus (NUP) metric (also called Custom Suite User in Oracle’s terminology). Each licensed user can access any module in the custom suite. For instance, if 200 users are licensed under a CAS agreement, those 200 individuals can use all the included modules without needing separate licenses for each module.

This unified metric eliminates double-counting the same user across multiple applications.

All users (and their uses) must be counted, including any indirect access. If other systems or interfaces allow additional people to use the Oracle data, those individuals also require licenses under the CAS agreement.

Enterprise Licensing Option: In some cases, Oracle may license a CAS bundle on an enterprise-wide metric instead of per user. Enterprise metrics tie licensing to a business metric, such as employee count or annual revenue.

For example, a large organization could license a custom suite for “all 5,000 employees” or “based on $1 billion revenue,” allowing unlimited usage of the included modules across the enterprise. This approach is effective when the EBS modules will be widely used (e.g., an HR self-service module used by every employee).

An enterprise CAS license offers broad coverage without requiring individual user tracking. Still, it requires a clear definition (for instance, defining which employees are included in the count) and can be more expensive if only a portion of the employees will use the system.

Negotiated Terms:

The CAS model is not a standard off-the-shelf SKU but rather a negotiated agreement. Oracle typically requires a minimum purchase (either a minimum number of users or a minimum spend) to approve a custom suite deal.

Pricing is customized based on the modules included and the scope of use. Because it’s a bigger commitment spanning multiple products, Oracle sales will often extend volume discounts for CAS deals.

Organizations should be prepared for a detailed negotiation process: you’ll work out exactly which modules are in the bundle, the license count or enterprise metric, and the discount level.

While negotiation is involved (as with any Oracle agreement), the outcome can be a more cost-efficient package tailored to the customer’s needs.

License Metrics and Management: Whether user-based or enterprise-based, CAS licenses still need diligent management.

• If licensed per user, you must maintain an accurate count of all individuals accessing the system. User licenses are typically “named user” – every person with credentials for the CAS modules counts toward the total, regardless of how often they use it.
• If licensed by an enterprise metric (like employees), you’ll need to monitor that metric (e.g., if your employee count grows, you may need to true-up the license). These agreements often require periodic reporting to Oracle (annually or upon expansion) to ensure you remain in the correct licensing band or purchase additional licenses if you exceed the agreed metric.

Benefits of CAS Licensing

Cost Savings by Bundling: The primary appeal of CAS licensing is cost reduction. Rather than buying separate licenses for multiple modules (which can lead to duplicate costs for the same user), CAS bundle pricing offers economies of scale.

You pay a single fee per user (or per enterprise metric) for the whole suite of selected modules.

For example, if an Oracle Financials module license costs approximately $4,600 per user and an Oracle Procurement license costs approximately $1,200 per user, a user needing both would normally incur a total of approximately $5,800 in licenses.

Under a CAS deal, Oracle might price the combined suite user license at a lower rate (say around ~$5,000 per user for both modules). Multiply that across hundreds of users, and the savings are significant.

Additionally, Oracle often provides tiered discounts in CAS agreements – the more modules bundled or the higher the number of users, the larger the discount percentage off the list price.

Enterprises have reported bundle discounts ranging from 10% to 30% for moderate deals, and even higher for very large, strategic EBS agreements. Overall, CAS helps avoid paying for functionality you don’t need and rewards you for a larger, consolidated purchase.

Simplified License Management:

CAS consolidates what would be multiple license contracts (one per module) into a single agreement. This streamlines administration – there’s one set of terms to track, one renewal date, and one metric to monitor.

Your software asset management team can focus on tracking the single CAS user count (or an enterprise metric) rather than juggling separate counts for Financials, HR, Supply Chain, and other departments. This unified view reduces administrative overhead and the likelihood of errors.

It also makes it clearer for the organization’s end-users: for instance, you don’t have to worry if a particular user is licensed for Module A but not Module B – if they are a CAS licensed user, they’re covered for all included applications.

Aligned with Actual Needs:

With a custom suite, you are licensing exactly the modules your business requires. This alignment means you’re not overpaying for shelfware (unused modules that you licensed but never implemented).

It also provides flexibility to craft licenses that match organizational structure – for example, a regional division might only need a subset of EBS modules, and a CAS can be tailored for that division.

CAS licensing is particularly useful for businesses that have unique footprints in Oracle EBS (not using everything, but using more than one or two modules intensively).

The model also supports business growth: if your needs evolve, you can expand the suite (by adding another module or increasing users) typically through an amendment or at renewal time, without renegotiating an entirely new, separate license for a new module.

Predictable Costs:

By locking in a set bundle and user count, CAS deals often provide clearer multi-year cost forecasting. You will usually have a known license cost for the bundle, and then the standard annual support (which is typically 22% of the net license fee per year).

This means no surprise expenditures for adding a new module mid-term or unexpectedly high usage on one module – everything in the suite is covered under the one agreement. Many enterprises appreciate this predictability for budgeting purposes.

Support and maintenance for the CAS bundle are consolidated as well, often simplifying support contract management and renewals with Oracle.

Compliance Clarity:

A custom suite can also reduce compliance complexity. Since the scope of licensed modules is clearly defined in the contract, there’s less ambiguity about what’s covered. You know exactly which software titles you’re entitled to use.

This can reduce accidental usage of unlicensed modules (a risk when you have full EBS but only use some pieces – sometimes staff might turn on an unlicensed module without realizing it, leading to compliance issues).

With CAS, if it’s not in the contract, you know you’re not supposed to use it, which makes internal compliance monitoring more straightforward.

Cost and Pricing Considerations

Oracle EBS applications are traditionally expensive, with list prices for core modules, such as Financials, ranging from approximately $4,595 per user (plus 22% annual support) to other modules, which range from roughly $1,000 to $4,500 per user.

These are list prices before any discounts. In practice, Oracle licensing deals are heavily discounted based on deal size and negotiations – large enterprises might receive 50% or more off list in big deals.

Custom Application Suite pricing is typically handled as a negotiated bundle.

Oracle assesses the combined value of the included modules and the number of users (or enterprise metric scope) and applies a discount to determine a single price. There isn’t a public “price list” for a CAS; it’s case-by-case.

To understand the potential cost advantage of CAS, consider a hypothetical scenario comparing separate module licensing vs. a CAS bundle:

Example: A company with 300 users needs both Oracle Financials and Oracle Procurement. If licensed separately at list prices, the cost would be approximately $2.74 million (excluding annual support).

By negotiating a CAS bundle, the company secures both modules for $1.5 million, covering 300 users, and saves over $1.2 million (45%).

In addition, the annual support fees would be based on the $1.5M instead of $2.74M, saving ongoing maintenance dollars as well.

Note: Actual discounts vary – this example is illustrative, and real-world pricing depends on negotiations, total spend, and Oracle’s discount approval.

When planning a CAS purchase, enterprises should:

• Analyze user overlap: Identify the number of users who utilize multiple modules. The greater the overlap, the more financially beneficial a bundled user license becomes.
• Estimate future growth: If user counts or business metrics (such as employees/revenue) are likely to increase, factor that into your projections. It may be worth licensing at a slightly higher upfront cost to accommodate growth, especially if negotiating a fixed price now (versus paying a higher price later for additional licenses).
• Consider module value: Not all modules have equal pricing. Oracle Financials and HR are expensive, whereas some niche modules may be more cost-effective. A CAS price will reflect the mix of high-value and lower-value modules. Ensure the bundle only includes what you truly need – adding a module “just in case” will raise the bundle price.
• Plan for support costs: Remember that after the initial license purchase, annual support fees (typically 22% of the net license cost) will recur. Support is also calculated based on the discounted price, which is another incentive to negotiate a lower license price – it reduces your support base.

Common Pitfalls and Risks in CAS Licensing

While CAS licensing offers many benefits, there are potential pitfalls to avoid:

Choosing the Wrong Metric:

Selecting an Inappropriate Licensing Metric Can Negate Cost Benefits. For instance, choosing a Named User metric when hundreds of indirect users exist can lead to compliance issues. Pitfall Example: A company licenses a CAS bundle for 200 named users, thinking only those 200 will use the system.

Later, they realize an additional 150 people are indirectly accessing Oracle data through a middleware reporting tool. In Oracle’s view, those indirect users also require licenses, so the company is 150 users short and out of compliance.

To avoid this, carefully evaluate all forms of access. If a broad audience will use the system (even indirectly), an enterprise metric might have been more appropriate. Conversely, if only a defined group needs access, stick to user-based licensing to avoid overpaying for an enterprise-wide deal.

Overly Narrow Module Selection:

Defining a custom suite too narrowly can create issues later. If you exclude a module that later becomes needed, you will have to license it separately (likely at a higher incremental cost) or renegotiate your CAS agreement mid-term. For example, an organization might initially omit an Oracle CRM module to save cost, only to find a year later that their business requires it.

Adding it outside the CAS can be expensive and operationally cumbersome (a separate contract). Solution: When negotiating CAS, consider future needs – it may be wise to include modules that are not immediately in use but are strong possibilities in the near future, as long as the cost increase is justified.

Balance current cost savings against potential expansion needs. Oracle sales teams can be flexible during initial negotiations, but may charge a premium if you return later for additional modules outside the original agreement.

Lack of Usage Monitoring:

After obtaining a CAS license, some organizations become complacent in tracking usage, thinking the bundle has them “all covered.” This is dangerous.

Oracle’s license audits will examine whether your actual deployment matches the contract. If you licensed 500 Custom Suite Users, but in reality, 600 people are using the system, you’re 100 licenses short and potentially facing back fees and penalties.

The indirect usage issue is also critical – any user accessing the software’s functionality, even through a custom interface or a third-party system that pulls data from EBS, counts as usage.

Failure to monitor this can lead to non-compliance. Companies must maintain vigilant internal compliance processes, including regular user access reviews, linking HR termination lists to IT account removal, and monitoring integration points to ensure all active users are captured.

Locked-In Bundle Commitments:

CAS agreements can reduce flexibility in certain ways. Because it’s a single contract for multiple modules, you typically cannot drop a module from the suite mid-contract and expect a refund or reduction. For instance, if one of the modules in your bundle becomes obsolete to your operations (maybe you divest a business unit or switch to a different software), you’re still stuck paying for it until the license term or support term ends.

There’s also usually no ability to partially reduce the user count if you overestimated. Oracle’s policies often prevent reducing license quantities without penalty (and support costs may stay the same even if you try to terminate part of the license). Therefore, accurately scope your needs from the start.

Only commit to the number of users and modules you truly require, with a reasonable growth buffer. It can be useful to negotiate price protections for additional users upfront (e.g., agree on a per-user price if you need to buy more later) so that scaling up isn’t at an exorbitant unit cost if done after the initial deal.

Audit and Compliance Risks:

Oracle frequently audits its customers. CAS licenses, like any Oracle license, will be scrutinized during an audit. A common risk area is multiplexing – the use of pooling or technical intermediaries that hide the identity of end users. Oracle’s stance is that all end users must be licensed, even if they access indirectly through a web portal or API.

Organizations sometimes assume that because a CAS covers multiple modules, they are safe. Still, if they haven’t licensed enough users or correctly reported enterprise metrics, they could be out of compliance.

Another risk is misunderstanding contract terms – some CAS deals may come with specific limitations (for example, the use of a module is only permitted in certain geographies or for specific subsidiaries). Failing to adhere to those could also trigger compliance issues.

The best defense is rigorous internal software asset management: know your contract entitlements in detail, continuously reconcile them against actual usage, and address any discrepancies immediately before Oracle identifies them.

Recommendations

• Thoroughly Assess Business Needs: Before opting for a CAS license, map out which Oracle EBS modules your organization uses or plans to use in the next few years. Select a custom bundle that encompasses all necessary functionality, but avoid including extraneous modules that add cost without providing clear benefits.
• Select the Optimal License Metric: Decide between user-based vs. enterprise-based licensing by analyzing your user base. If usage will be limited to a specific group (e.g. a defined number of finance and HR users), a Named User Plus approach will be more cost-effective. If the applications will be used broadly (e.g., an HR self-service module for all employees), consider an enterprise metric. Match the metric to your usage patterns to prevent under- or over-licensing.
• Negotiate Aggressively but Smartly: Leverage the fact that CAS is a consolidated purchase to negotiate better pricing. Engage Oracle at fiscal year-end or quarter-end when they may be more inclined to offer discounts. Aim for a bundled discount rather than paying the full list price for each module. Ensure the deal includes pricing for future expansion (such as additional users or modules) to avoid unexpected expenses later. Always obtain written agreement, with clear definitions of metrics and users, to prevent ambiguity.
• Implement Strong License Management: After signing a CAS agreement, treat license governance as an ongoing responsibility. Maintain a single source of truth for all users with access to the EBS suite (update it as employees join, leave, or change roles). Regularly audit usage internally – at least annually, if not quarterly. Verify that the number of active users (including any with indirect access) stays within your licensed quantities. This proactive approach will help you identify and address any compliance issues early, ensuring you stay in control of your Oracle licensing position.
• Involve Licensing Experts and Stakeholders: Oracle licensing is a complex matter. Involve your procurement department, software asset management team, or external licensing consultants when evaluating CAS. Their expertise can ensure you interpret Oracle’s terms correctly and optimize the contract. Additionally, involve business unit leaders in forecasting module usage and growth. A cross-functional approach leads to a more accurate licensing plan and avoids siloed decisions that could miss critical usage information.
• Plan for Renewals and Changes: CAS licenses (if perpetual) come with annual support renewals. If they are term-based or part of Oracle’s subscription model, they will have corresponding renewal cycles. Plan for renewals – review usage and needs before renewal time to decide if you need to adjust the license quantities or if certain modules can be dropped or new ones added (often, major changes will need a new agreement or an extension, which should be negotiated well in advance). By reviewing your CAS deployment before renewal, you can approach Oracle with a clear request (either for a reduction, expansion, or improved terms) and avoid blindly renewing the same terms if your situation has changed.
• Educate and Communicate: Ensure that all relevant IT and business teams understand the scope of the CAS license. This prevents someone from unintentionally deploying an unlicensed module. Document the custom suite entitlements and communicate to application administrators that new module enablement must go through a license check. In essence, spread awareness that although CAS simplifies things, it doesn’t mean “we own everything” – it’s limited to specific modules.

Checklist: 5 Key Actions for Managing CAS Licensing

• Define Your EBS Module Scope: List the Oracle EBS modules your organization uses or will need. Confirm with department heads which modules are critical. This forms the basis of your CAS bundle – you’ll only include these modules.
• Count Users and Access: Determine the number of users (employees, contractors, partners) who will require access to these modules. Include potential indirect users (e.g., via reports or integrations). Determine whether a named user count or an enterprise metric (such as the total number of employees) best suits this usage profile.
• Engage Oracle (or a Licensing Advisor): Open discussions with Oracle or a trusted licensing consultant about a Custom Application Suite deal. Please provide your module list and user counts/metrics to receive a pricing proposal. Ensure you negotiate for the best discount and clarify terms (such as add-on pricing for extra users or the process to add a module later).
• Document and License Appropriately: Once the CAS contract is in place, document exactly which modules and the number of users are licensed, or the specific metric being licensed. Internally, lock down the EBS configuration so only those licensed modules are active. Mark in your IT asset records that these systems are covered under a CAS license and note the limits (e.g., “500 Custom Suite Users for Financials+Procurement modules”).
• Monitor and Review Regularly: Establish a routine (at least annually) to review the actual usage of your EBS modules against your CAS entitlements. Use admin reports or an asset management tool to count the number of active named users. If you approach limits (e.g., 490 of 500 users in use) or plan a new project that would add users or a module, initiate actions: either true-up with Oracle or optimize usage (e.g., remove inactive accounts). Always be prepared for an Oracle audit by maintaining up-to-date records that demonstrate compliance with your licensed bounds.

FAQ

Q: How does CAS licensing differ from Oracle’s standard module licensing?
A: In standard EBS licensing, you license each module separately (each user might need multiple licenses if they use multiple modules). With CAS, you bundle selected modules under one license agreement and typically pay per user for the bundle. This means that one CAS user license grants a user rights to all modules in the custom suite, simplifying management and often lowering the total cost compared to buying each module’s license individually.

Q: When should an organization consider a Custom Application Suite license?
A: Consider CAS licensing if you plan to use several Oracle EBS modules extensively but don’t need the entire EBS suite. It’s ideal when the same group of users requires access to multiple modules – for example, your finance team uses Financials, Procurement, and Projects modules. CAS is also attractive for large deployments where enterprise metrics are applicable or when you want to consolidate multiple licenses into a single contract. If you only use one or two modules in total, CAS might not be necessary; if you use almost every module, you may be looking at a full suite or an enterprise agreement instead. CAS shines in the middle ground of “more than a couple, fewer than all” module usage.

Q: How is pricing determined for a CAS bundle, and can it save money?
A: CAS pricing is determined by Oracle based on the specific modules in the bundle, the number of users (or enterprise size), and the discounts negotiated. Oracle will often start with list prices for each module, consider the volume (user count or enterprise metric), and then apply a bundle discount since you’re buying multiple products together. In practice, organizations save money with CAS by eliminating duplicate licensing (where the same user is counted multiple times for different modules) and by securing a discount for multi-module purchases. The savings can be significant – commonly 20–50% lower than the cost of licensing modules separately – but this depends on your deal size and Oracle’s discount guidelines. Always run a cost comparison (separate vs. CAS) to quantify the benefit for your scenario.

Q: What are the main risks or downsides of CAS licensing?
A: The main risks include over- or under-estimating your needs. If you undercount users or don’t foresee indirect usage, you can fall out of compliance (owing Oracle for extra licenses). If you overcommit (with too many users or modules), you may pay for capacity you don’t use and can’t easily reduce. Another downside is the lack of flexibility – once you sign a CAS deal, you’re locked into those specific modules and quantities. If your business changes, you can’t drop a module from the bundle until perhaps the next renewal. Additionally, negotiating CAS can be complex, as it requires careful attention to contract terms. Lastly, like all Oracle licenses, CAS will be subject to audits – you must diligently manage and record usage to avoid any compliance penalties.

Q: Can we adjust a CAS agreement later if our company grows or needs change?
A: Generally, you can expand a CAS agreement but not shrink it during its term. If you grow and need more users, you can purchase additional Custom Suite User licenses (usually at the pre-negotiated rate if that was arranged, or at a new negotiated price). If you need an additional module, you’d likely have to negotiate an amendment to include it (which will increase the license cost). These changes typically mean spending more with Oracle. On the other hand, if you downsize or stop using a module, you usually cannot get a refund or drop those licenses until the contract period is over (or the support renewal time, and even then, Oracle may not easily give credits for dropping products. The key is to structure the initial CAS contract as future-proof as possible – include foreseeable modules and secure pricing for growth, thereby minimizing the need for mid-term changes.

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