Many IT companies or solution providers develop their own applications. These applications may be built on the underlying Oracle Middleware and/or Database software programs. These solution providers would not only want to sell their specific application but a total solution towards their end users (including the underlying Oracle Database and/or Middleware software programs). However, if the end user that wants to make use of the application would need to buy its own Full Use licenses for the underlying Oracle Database and/or Middleware software programs, the total solution may become too expensive. A situation that does not support Oracle’s business either, since solution providers would, in such a situation, be less inclined to develop their applications on the Oracle software but would rather choose alternative solutions (e.g. developing applications in .Net on Microsoft software programs).
For this kind of situations, Oracle invented a while back the so called “Proprietary Application Hosting License” to be sold to solution providers that develop their applications on Oracle Database and/or Middleware software and that want to offer their solution as a “hosted” solution towards end users. This type of agreement is therefore typically designed for IT companies/solution providers that develop their own applications on Oracle Database and/or Middleware software.
Companies that enter into a Proprietary Application Hosting agreement would receive a normal ordering document with the standard language, but with one specific clause stating that:
- You shall have the right to use the limited use proprietary Programs for the purpose of providing internet hosting services to end users.
- You may allow such end users to access the limited use proprietary Programs hosted at a site which is separate and apart from Your end user, for the end user’s business operations and/or to provide services to third parties using the limited use proprietary Programs.
- Your proprietary Programs may not be installed at the end user’s site.
- You shall not resell or assign Your Program license to the end user
- You acknowledge that Your right to provide hosting services to “end users” is limited to the provision of hosting and other services at Your data center in a multi-tenant environment and does not include the right to deploy dedicated environments for public sector entities.
The costs of a Proprietary Application Hosting license are typically much lower than the prices applicable for Full Use licenses. How come? Because Oracle restricts the use rights within a Proprietary Application Hosting license to a specific proprietary owned application. The application as developed and owned by the IT company/solution provider; the proprietary application. The Proprietary Application Hosting License agreement therefore includes at all times a so-called Proprietary Application Registration Form (PARF). This form is required to be completed by the IT company/solution provider, including the specific functions of the proprietary application running on the Oracle Database and/or Middleware software.
But when is an IT company or solution provider then considered to be a “Proprietary Application Hosting Company”? Oracle defines a proprietary application hosting company as a company that provides commercially available applications or services that include access to Oracle programs to end users or that processes customer data using Oracle. In other words, companies that enter a Proprietary Application Hosting agreement are usually solution providers that develop an application which they would like to offer as a hosted service towards multiple end users.