One SAM challenge around EBS is that modules are licensed by many distinctly different metrics, each with its own potential compliance pitfalls. The variety of metrics and their respective contractual definitions often create confusion for customers. For example, one of the most common metrics offered within the EBS product set is “Application User.” As we’ve highlighted in related posts, an “Application User” refers to an individual that is given access to the program, regardless of whether or not they actually log in. By this definition, any user that has not been end-dated, even if they are no longer employed by the company, is consuming a license, and Oracle will deem a license to be needed in the event of an EBS audit. Many customers aren’t diligent about end-dating users and consequently face steep compliance fees.
As with “Application User,” when customers license by “Employee,” another common metric, the number of actual people using the software is irrelevant from a licensing perspective. Unlike “Application User,” however, access to the software is irrelevant as well. When modules are licensed by “Employee,” customers must license their entire employee population, regardless of who actually accesses or uses the software. For this reason, customers sometimes become non-compliant when their company headcount grows, even if they don’t use the EBS module at all.
Some EBS modules are licensed by the amount of use, rather than the number of users or employees. For example, Oracle sells their Internet Expenses application by the “Expense Report” metric. In this case, customers must license each expense report that is created in the system. Another common application licensed by amount is Order Management, which may be licensed by the number of electronic order lines created in the program. Customers can easily become non-compliant with these kinds of modules by simply miscalculating how much they will use when they buy licensing. While these “amount-based” programs often have a low per-unit cost, the fees can add up quickly if customers’ usage greatly surpasses their entitlement.
In addition to the metrics we’ve discussed above, there are numerous others, including “Record,” “Trainee,” and even “$M Cost of Goods Sold.” This variety of metrics adds complexity in managing EBS licensing.