Do I need to buy an Oracle license for a development database?

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This is probably an issue that gets many companies in hot water during an Oracle audit. The short answer is yes, you must purchase a license in most cases. However, if you download the Oracle Standard Edition, Standard Edition One and the Enterprise Edition from the Oracle Technology Network (OTN), you can develop on the OTN software and you're covered under the OTN license as long as "the programs are used for any purpose except the development of a single prototype of your application," according to the OTN license terms and agreement on the Oracle Technology Network. In other words, you may use the OTN license – which is a limited license – to develop an application, but not for deployment including for "classroom activity, internal data processing operations or any other commercial or production use purposes". Therefore, you can download Oracle software from the OTN and develop an application without having to pay for a license, but if you want to test or run the application, you must have a license.

Another exception to the licensing rule is if you are using Oracle XE. You don't need a license, but you need to understand and adhere to the restrictions. You can run without a license in the Oracle XE environment if you are using 1 CPU (only) with 1 gigabyte of RAM and 4 gigabytes of disk space.