Proprietary Application Hosting (PAH)
Oracle Licenses and Application Hosting
The ProblemWhat many companies don’t know is that Oracle does not permit them to use Oracle licenses they obtained themselves to host applications to end-users or other third parties!
Hosting Oracle Technology
To drive efficiencies in business operations and to leverage access to technical resources and infrastructure, an increasing number of companies are relying on third parties to provide IT outsourcing (e.g., DBA functions, hardware, and networking), Web hosting or access to business applications. These offerings are commonly referred to as service bureaus, Hosting Service Providers (HSP), Application Service Providers (ASP), Managed Services Providers (MSP), hosting companies or outsourcing companies. Oracle uses the terms "Hoster" or "Hosting Company" as the catch all phrases to describe a company that operates in a Service Bureau, Hosting or any other third party relationship where Oracle grants a right to a company to use licenses to host or manage Oracle program.
Hosting Company Definition
A hosting company for Oracle's business purposes is defined as a company providing commercially available applications or services to multiple end users which includes access to Oracle programs and/or processing of customers data using the Oracle programs.
Standard Oracle License Restrictions
The standard Oracle license agreement allows the licensed customer to use the Oracle programs solely for its internal business operations. The customer is not allowed to use the licensed programs for the internal business operations of any other entity.
Oracle (Proprietary Application) Hosting (PAH) License
When the licensed programs are used for the internal business operations of a third party, Oracle classifies this type of activity as hosting. As the standard license agreement does not grant the licensed customer the right to use the programs licenses in this manner, the ordering document must include hosting language which grants the licensed customer the right to use the licensed programs for the purposes of providing internet hosting services to end users.
Proprietary Application Hosting
Proprietary Application Hosting: Companies that own and develop a commercially available application that is available to multiple end users and operates with an embedded Oracle program. Companies who develop proprietary applications and embed Oracle technology as the database component within their applications are considered Proprietary Application Technology Hosting companies.
Oracle PAH does not allow a hosting company to host an application that is not their own proprietary application using the Proprietary Application Hosting model. Additionally, a company is not permitted to use Proprietary Application Hosting licenses to host a custom developed application for a single end user; hosting licenses are only suitable for a one-to-many offering
Please feel free to contact us when you have questions regarding hosting of Oracle licenses to end-users. A proprietary Application Hosting (PAH) license maybe a good solution to avoid problems with Oracle License Management Support, but a PAH license construction may not be the most optimal in your companies specific situation.