Oracle Licensing

Navigating Oracle Cloud Licensing Models

Oracle Cloud Licensing Model:

  • Universal Cloud Credits (UCCs): Prepaid, flexible use.
  • SaaS Licensing: Hosted Named User and Employee metrics.
  • Bring Your Own License (BYOL): Use existing OCI, Azure, and AWS licenses.
  • IaaS and PaaS: Licensed via UCCs or pay-as-you-go.

Oracle Cloud Licensing Models

Oracle Cloud Licensing Models

Oracle’s cloud licensing model provides flexibility, scalability, and cost-effectiveness for organizations moving to the cloud.

As businesses increasingly adopt cloud services, it is crucial to understand how Oracle licenses its cloud offerings.

This guide delves into the intricacies of Oracle’s cloud licensing, including Universal Cloud Credits (UCCs), Software as a Service (SaaS) licensing, and Bring Your Own License (BYOL) options.

Overview of Oracle Cloud Licensing

Oracle’s cloud licensing is designed to cater to a wide range of business needs, ensuring that organizations can effectively leverage Oracle’s powerful cloud services. The primary models include Universal Cloud Credits (UCCs), SaaS licensing, and BYOL.

Universal Cloud Credits (UCCs)

Universal Cloud Credits offer a flexible, prepaid method to consume Oracle Cloud services. These credits allow organizations to use any Oracle Cloud Infrastructure (OCI) service, adjusting their usage based on needs without worrying about individual service pricing.

  • Prepaid Model: Organizations purchase a set amount of cloud credits in advance.
  • Flexibility: Credits can be applied to various Oracle Cloud services.
  • Cost Management: Helps budget and manage costs by providing a single pool of credits to draw from.

Benefits of UCCs

  • Predictable Costs: Simplifies cost management with prepaid credits.
  • Scalability: Easily scale usage up or down without renegotiating contracts.
  • Versatility: Applicable to various services within Oracle Cloud, including computing, storage, and networking.

Software as a Service (SaaS) Licensing

Software as a Service (SaaS) Licensing

Oracle’s SaaS licensing model is tailored for businesses looking to access fully managed applications hosted in the cloud.

This model primarily uses the Hosted Named User metric, licensing individuals authorized to access the cloud service.

  • Hosted Named User: Licenses are based on the number of users authorized to access the service.
  • Per Module Licensing: SaaS services are licensed per module, allowing organizations to pay for only what they use.
  • Employee Metric: For some modules, licensing is based on the total number of employees in the organization, providing a broad usage scope.

Benefits of SaaS Licensing

  • Managed Services: Oracle handles maintenance, updates, and security, reducing IT overhead.
  • Flexibility: Pay only for the modules and users you need.
  • Scalability: Easily add or remove users as business needs change.

Bring Your Own License (BYOL)

The BYOL model allows organizations to leverage their existing Oracle licenses in the cloud, offering significant cost savings and flexibility.

This model supports the migration of on-premises licenses to Oracle Cloud Infrastructure (OCI), Microsoft Azure, and Amazon Web Services (AWS).

  • License Reuse: Use existing licenses in the cloud without purchasing new ones.
  • Cost Savings: Reduce cloud migration costs by utilizing current investments.
  • Cloud Compatibility: Applicable to multiple cloud platforms, licensed per Oracle CPU (OCPU) or virtual CPU (vCPU).

Benefits of BYOL

  • Cost Efficiency: Maximizes the value of existing licenses.
  • Flexibility: Supports hybrid cloud strategies by allowing seamless migration between on-premises and cloud environments.
  • Comprehensive Coverage: All Oracle products are available under the BYOL program.

Licensing Oracle Cloud Services: Detailed Breakdown

Licensing Oracle Cloud Services: Detailed Breakdown

Infrastructure as a Service (IaaS)

IaaS provides foundational cloud computing resources, including computing, storage, and networking. Oracle licenses these services primarily through UCCs or pay-as-you-go models.

  • Compute Services: Charged based on the number of OCPUs or vCPUs used.
  • Storage Services: These are licensed based on the amount of data stored and the type of storage used (e.g., block storage, object storage).
  • Networking Services: Costs depend on data transfer volumes and network configurations.

Platform as a Service (PaaS)

PaaS offers development tools and environments, enabling organizations to build, deploy, and manage applications. These services are typically licensed via UCCs or specific subscription models.

  • Database Services: Licensed based on database instances and the resources allocated (e.g., OCPUs, storage).
  • Application Development: Includes tools like Oracle Application Express (APEX) and Oracle Integration Cloud, licensed based on usage metrics or UCCs.

Software as a Service (SaaS)

SaaS encompasses various Oracle applications, from ERP and HCM to SCM and CX. These services are licensed based on the number of hosted named users or total employees for specific modules.

  • ERP Cloud: Licensed per user or employee for specific financial and operational modules.
  • HCM Cloud: Typically uses the employee metric, licensing based on the total number of employees.
  • CX Cloud: Customer Experience applications are licensed per user, allowing granular cost control.

Best Practices for Oracle Cloud Licensing

Evaluate Needs and Usage

Conduct a thorough assessment of your organization’s current and future cloud requirements. This will help you select the appropriate licensing model and ensure optimal resource allocation.

  • Current Usage: Analyze current on-premises usage and forecast cloud needs.
  • Future Growth: Plan for scalability and potential increases in cloud resource requirements.

Leverage BYOL for Cost Savings

Leverage the BYOL model to maximize existing investments. This reduces migration costs and ensures continuity and consistency across environments.

  • Identify Eligible Licenses: Determine which existing licenses can be migrated to the cloud.
  • Optimize Usage: Use BYOL with UCCs or other cloud services to optimize costs.

Monitor and Adjust

Continuous monitoring and regular adjustments of cloud resources and licenses ensure compliance and cost-effectiveness.

  • Usage Monitoring: Implement tools to track cloud usage in real time.
  • Regular Audits: Conduct periodic audits to verify compliance with licensing terms and identify areas for cost optimization.

Engage Licensing Experts

Work with Oracle licensing experts to navigate the complexities of cloud licensing and develop tailored strategies that align with business goals.

  • Expert Consultation: Seek advice on selecting the right licensing model and optimizing resource allocation.
  • Negotiation Support: Experts can assist in negotiating better terms and discounts with Oracle.

Frequently Asked Questions (FAQ)

What is Oracle’s cloud licensing model?
Oracle’s cloud licensing model includes Universal Cloud Credits (UCCs), Software as a Service (SaaS) licensing, and Bring Your Own License (BYOL) options, providing flexibility and scalability.

How do Universal Cloud Credits (UCCs) work?
UCCs are prepaid credits that can be used across various Oracle Cloud services, offering resource allocation and cost management flexibility.

What is the Hosted Named User metric in SaaS licensing?
The Hosted Named User metric licenses individuals authorized to access an Oracle cloud service, regardless of active use, and is applied per module.

Can existing Oracle licenses be used in the cloud?
The BYOL model allows organizations to use their existing Oracle licenses in Oracle Cloud Infrastructure (OCI), Microsoft Azure, and Amazon Web Services (AWS).

What are the benefits of SaaS licensing with Oracle?
SaaS licensing offers managed services, flexibility to pay for only what you use, and scalability to add or remove users as needed.

How are IaaS services licensed in Oracle Cloud?
IaaS services are primarily licensed via UCCs or pay-as-you-go models based on the number of OCPUs or vCPUs, storage used, and data transfer volumes.

What should be considered when evaluating cloud licensing needs?
Assess current and future usage, plan for scalability, and consider the potential growth of cloud resource requirements.

How can BYOL help in cost savings?
BYOL maximizes the value of existing licenses by allowing their use in the cloud, reducing migration costs, and supporting hybrid cloud strategies.

Why is monitoring cloud usage important?
Monitoring cloud usage ensures compliance with licensing terms, helps identify areas for cost optimization, and ensures efficient resource allocation.

What role do licensing experts play in cloud licensing?
Licensing experts advise selecting the right licensing model, optimizing resource allocation, and negotiating better terms with Oracle.

How are PaaS services licensed in Oracle Cloud?
PaaS services, including database and application development tools, are licensed via UCCs or specific subscription models based on usage metrics.

What is the employee metric in SaaS licensing?
The employee metric licenses SaaS services based on the total number of employees in the organization, providing broad usage coverage for specific modules.

What are the key benefits of using UCCs?
UCCs offer predictable costs, scalability, and versatility, allowing organizations to apply credits to a wide range of Oracle Cloud services.

How do regular audits help in cloud licensing management?
Regular audits verify compliance with licensing terms, identify discrepancies early, and help optimize costs by ensuring accurate resource usage.

What are the main advantages of Oracle’s cloud licensing models?
Oracle’s cloud licensing models offer flexibility, scalability, cost management, and the ability to leverage existing licenses, making them suitable for diverse business needs.

By understanding and applying these principles and best practices, organizations can effectively manage Oracle’s cloud licensing model, ensuring they meet their operational needs while optimizing costs and maintaining compliance.


  • Fredrik Filipsson

    Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, enhancing organizational efficiency.

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