Licensing JD Edwards: Historical overview licensing & pricing

Over time, technological developments led to changes in licensing and pricing of JD Edwards applications. Therefore, to understand the root cause of most JDE licensing issues, we need to start with an overview of the historical and current licensing and pricing models.

JD Edwards was an independent Enterprise Resource Planning (ERP) software company, mainly known for its “World” products for IBM AS/400 minicomputers, “OneWorld” products for client-server fat client, and “EnterpriseOne” products, a web-based thin client. In 2003, JD Edwards was acquired by PeopleSoft Inc., which in turn, was acquired by Oracle Corporation in 2005.

JD Edwards

... deployed five pricing models over its 26-year history:

1. Server Model-based – used prior to October 1993.
   The license fees were based on the model of an organization’s IBM AS/400 server. This pricing model made no reference to users. In other words, the end-user would license the capacity of the server and they could have as many users as the server could host.
2. Concurrent User-based – used between November 1993 and November 1996.
   The model included a list of products for a specified number of users and these users were considered concurrent. Both World and OneWorld products were listed in software license agreements.
3. Suite-based – used between November 1993 and February 2002.
   Organizations with existing contracts using suite-based pricing were able to purchase licenses for additional products and users using this same model until February 2004.

The software license fees were based on two components:

1. A group of products (the “suite”)
2. User fees – software license agreements contain several different user types, which will be explained below.
3. Solution-based – originally launched in February 2002, solution pricing was the last pricing model used by JD Edwards.
   This model was enhanced in 2004 and formed the basis for PeopleSoft’s solution pricing model. Solution software licenses are similar to Suite-based licenses, but products are defined on a more granular level. For example, if the Financial Suite was made up of Accounts Payables, Accounts Receivables, General Ledger etc. end-users could buy only some of these components separately under the solution based model.
4. Enterprise Licensing – allows for an unlimited number of users. Individual products are purchased as required by the end-user.

The following types of user licenses (metrics) were used for World and EnterpriseOne in conjunction with Suite and Solution based pricing:

Concurrent user

Concurrent users are “Full Use” users. Full Use meaning that a user is allowed to access and use all products, modules and features and the number of concurrent user licenses required is determined by the maximum amount of users that at a certain moment in time, at the same time, access the JDE software.

Named user

Named users are “Full Use” users. A Named user license belongs to a specific individual. One license equals one user.

Moderate user

Moderate User licenses allow usage of limited functionality only. A Moderate User license belongs to a specific individual. One license equals one user.

Inquiry or casual user

Inquiry users by definition aren’t allowed to perform transactions. An Inquiry User license belongs to a specific individual. One license equals one user.

PeopleSoft

... provided both enterprise and solution licensing options:

Enterprise pricing

PeopleSoft Enterprise Pricing allowed to license the desired software applications for an entire organization without having to keep track of specific user licenses, servers or deployment locations. The license fees were based on company size metrics. Additional license fees (“expansion fees”) were charged in case of growth of the organization. For example, the end-user would initially license 1000 enterprise employees. Once the quantity was exceeded, the end-user needed to purchase as many increments (predefined quantities of licenses) as are necessary to cover the new employee count. The expansion fee is the total value of the increments.

Solution pricing

PeopleSoft Solution Pricing allowed to license software applications for a specific number of users. This originally was a JD Edwards licensing model that was continued by PeopleSoft after the acquisition. The following license types were associated with Solution Pricing:

1. Named User – full-use user that has access to all licensed software.
2. Self-Service User – limited to a specific application such as Employee Self-Service or Customer Self-Service. A self-service user is similar to a named user when licensing for internal self-service applications (Employee Self-Service, Manager Self-Service or Expense Management). A self-service user is similar to a concurrent user when licensing for external self-service applications (Customer Self-Service, Supplier Self-Service or Partner Relationship Management). All self-service users are restricted to the use of the application they are assigned to.

Oracle

... has 3 pricing models for JD Edwards applications:

Component pricing

Component Pricing is Oracle’s “a la carte” pricing model. Most products are priced by Application Users, but some use a different metric. HR/Payroll products are priced by Employee Count; Supply Chain products are priced by $M Cost of Goods Sold; Expense Management is licensed by number of expense reports processed annually.

Custom Application Suite (CAS) pricing

For this model, products are sold in a tailor made “suite” or bundle of products (the so called Custom Suite) for a number of users (the so called Custom Suite Users). Not all the products can be bought on CAS pricing model, but can be mixed with component based licenses.

Enterprise pricing

Products within this pricing model are licensed for the entire organization. The license metrics associated with this model are $M Revenue, $M Cost of Goods Sold or Employee Count.

All these models started being applied by Oracle in 2006 after the acquisition of PeopleSoft and they are still in use today.