Oracle cloud

Oracle Universal Cloud Credits – Flexibility and Discounts

Oracle Universal Cloud Credits:

  • Flexible Access: Use for various Oracle Cloud services (OCI, PaaS).
  • Purchasing Models: Annual commitment (discounted rate) or Pay-as-you-go (monthly payments).
  • BYOL Option: Utilize existing Oracle licenses on Oracle Cloud.
  • Benefits: Cost-effective, adaptable for fluctuating needs.
  • Exclusions: Not applicable to Oracle ERP Cloud or other SaaS services.

Introduction to Oracle UCCs

Oracle Universal Cloud Credits are essential for organizations looking to access and manage Oracle’s extensive cloud services efficiently.

They provide a flexible and cost-effective way to utilize various Oracle Cloud services, making it easier to adapt to changing business needs without overcommitting resources.

What are Oracle Universal Cloud Credits?

What are Oracle Universal Cloud Credits?

Oracle Universal Cloud Credits allow customers to pre-purchase cloud credits that can be used across Oracle’s cloud services, including Oracle Cloud Infrastructure (OCI) and Platform as a Service (PaaS).

This system offers significant flexibility and cost-effectiveness, allowing businesses to manage their cloud expenditures more predictably and adapt to fluctuating demands without incurring unnecessary costs.

Purchasing Models

Annual Oracle Universal Credits:

  • Annual Commitment: Requires a yearly upfront commitment to purchase a specified amount of credits.
  • Discounted Rate: Offers a reduced rate compared to pay-as-you-go, providing cost savings for long-term projects.
  • Upfront Cost Benefits: This option is ideal for organizations with predictable cloud usage. It enables them to budget more accurately and benefit from lower rates.

Pay as You Go:

  • No Annual Commitment: Provides the flexibility to pay only for the resources used each month, with no long-term obligations.
  • Monthly Payments: Costs are based on monthly usage, making it suitable for businesses with variable or uncertain cloud needs.
  • Flexibility for Variable Needs: Perfect for startups or projects with unpredictable requirements, it allows scaling up or down without financial penalties.

In practice, my experience has shown that selecting the right model depends on the organization’s specific needs and budget constraints.

For example, a client with a stable, ongoing workload benefited significantly from the cost savings of the Annual Oracle Universal Credits. At the same time, another with seasonal spikes in demand found the Pay as You Go model ideal for managing their fluctuating usage without overspending.

Bring Your Own License (BYOL)

Explanation of BYOL: Bring Your Own License (BYOL) allows organizations to leverage their existing Oracle licenses on Oracle Cloud. This model supports Oracle technology licenses such as Oracle Database Enterprise Edition, enabling significant cost savings by reusing already purchased licenses.

Utilizing Existing Oracle Licenses: Organizations with supported Oracle licenses can apply these to Oracle Cloud services. For example, an existing Oracle Database Enterprise Edition license can run the same database on Oracle Cloud, effectively reducing licensing costs.

Benefits of Oracle Universal Cloud Credits

Benefits of Oracle Universal Cloud Credits

Cost Savings: Annual commitments provide significant discounts, making it cost-effective for organizations with predictable cloud usage. This model helps budget and plan expenses more accurately.

Flexibility: Oracle Universal Cloud Credits offer flexibility by allowing credits to be used across various Oracle Cloud services, including Oracle Cloud Infrastructure (OCI) and Platform as a Service (PaaS). This adaptability is useful for managing diverse workloads and adjusting to changing business needs.

Exclusions: Oracle Universal Cloud Credits cannot be used for Oracle ERP Cloud or other SaaS services. Understanding these exclusions is important for planning cloud expenditures effectively and avoiding unexpected costs.

Flexibility of Oracle Universal Cloud Credits

Usage Across Services: Oracle Universal Cloud Credits can be applied to a wide range of Oracle Cloud services, offering unparalleled flexibility. This includes services such as computing, storage, networking, and databases, allowing organizations to allocate resources where they are most needed.

Examples of Applicable Services:

  • Computing: Run virtual machines and other computing resources.
  • Storage: Cloud storage solutions are used for data management and backups.
  • Networking: Implement and manage network infrastructure in the cloud.
  • Databases: Deploy and easily manage Oracle databases, leveraging cloud scalability and performance.

In my experience, organizations benefit greatly from this flexibility. It enables them to dynamically allocate resources to different services as their needs evolve, ensuring optimal use of their cloud investment.

Exclusions

Services Not Covered: Oracle Universal Cloud Credits cannot be applied to certain services. This includes specific SaaS offerings such as Oracle ERP Cloud.

Specific Exclusions:

  • Oracle ERP Cloud: Universal Cloud Credits cannot be used for ERP Cloud services.
  • Other SaaS Services: Other Software as a Service offerings are excluded from coverage under Oracle Universal Cloud Credits.

Understanding Oracle’s Annual Flex Agreement

Understanding Oracle's Annual Flex Agreement

Explanation of the Annual Flex Agreement: The Annual Flex Agreement requires an upfront commitment for a year. It allows organizations to purchase a pool of credits at a discounted rate. These credits can be used anytime within the year for eligible services.

Benefits:

  • Predictable Budgeting: Secures a discounted rate, making it easier to plan and manage the cloud budget for the year.
  • Flexibility: Unlike the Pay as You Go model, users can adjust cloud usage without incurring additional costs.
  • Avoiding Uncertainties: Eliminates the month-to-month uncertainty of cloud expenses by committing to an annual budget.

Ideal for Large-Scale Projects: The Annual Flex Agreement is particularly advantageous for organizations planning large-scale projects that require significant cloud resources. By purchasing credits in advance, organizations can ensure they have the necessary resources at a predictable cost.

Expert Advice on Pay As You Go

Beneficial Situations:

  • Organizations with fluctuating or unpredictable cloud usage.
  • Companies new to cloud services need flexibility to scale as they understand their requirements.
  • Projects or initiatives with short-term or exploratory objectives.

Advantages:

  • Flexibility: Pay only for what you use each month.
  • No Long-Term Commitment: Ideal for those who want to avoid the uncertainty of an annual commitment.
  • Exploratory Use: Allows trying different cloud services without a significant upfront investment.

Using Existing Licenses: BYOL vs. UCC

Using Existing Licenses: BYOL vs. UCC

Decision-Making Factors:

  • Current Licenses: Assess if you have existing, supported Oracle licenses.
  • Usage Patterns: Evaluate if your usage patterns favor BYOL or purchasing new Universal Cloud Credits (UCC).

Cost Comparison:

  • BYOL Savings: Leveraging existing licenses can significantly reduce costs. For example, Oracle Database Enterprise Edition licenses on the cloud can save around $767,000 annually for 200 OCPUs compared to purchasing new credits.
  • UCC Costs: If you don’t have existing licenses, UCC provides a flexible, pay-as-you-go model, though typically cheaper than BYOL.

Note for Oracle ULA Customers:

  • Deployments on Oracle Cloud cannot be counted towards Oracle Unlimited License Agreement (ULA) exit numbers, which could impact long-term licensing strategies.

FAQs

What are Oracle Universal Cloud Credits?

Oracle Universal Cloud Credits allow customers to pre-purchase credits for various Oracle Cloud services, providing flexibility in managing cloud expenditures.

How do Oracle Universal Cloud Credits work?

Customers buy credits in advance and use them as needed across Oracle’s cloud services, such as OCI and PaaS.

What is the Annual Oracle Universal Credits model?

This model involves an annual commitment with an upfront payment, offering discounted rates for Oracle Cloud services.

What is the Pay-as-You-Go model?

The Pay as You Go model requires no annual commitment, with monthly payments based on actual usage, suitable for variable needs.

Can Oracle Universal Cloud Credits be used for SaaS services?

No, Oracle Universal Cloud Credits cannot be used for Oracle ERP Cloud or other SaaS services.

What is Bring Your Own License (BYOL)?

BYOL allows customers to use their existing Oracle licenses on Oracle Cloud, potentially saving on new license costs.

What are the benefits of the Annual Oracle Universal Credits model?

Benefits include cost savings through upfront discounts and predictable budgeting for cloud expenses.

What are the benefits of the Pay as You Go model?

This model offers flexibility for organizations with uncertain or fluctuating cloud usage, requiring no long-term commitment.

How do I decide between BYOL and UCC?

Evaluate your current Oracle licenses and usage patterns to determine whether leveraging existing licenses (BYOL) or purchasing new Universal Cloud Credits (UCC) is more cost-effective.

Can I negotiate discounts for Oracle Cloud services?

Yes, discounts can be negotiated, especially for the Annual Flex model, but they are typically conservative and range from 0 to 20%.

What is the minimum term for an Oracle Universal Credit agreement?

The minimum term is 12 months.

What is the minimum spend for the Oracle Annual Flex model?

The minimum spend is $1,000 per month for 12 months.

Can I use Oracle Universal Cloud Credits for any Oracle Cloud service?

Credits can be used for most Oracle Cloud services, including OCI and PaaS, but not for ERP Cloud or other SaaS offerings.

What should I consider for the Annual Flex Agreement?

Consider predictable cloud usage, the need for budget stability, and the desire to avoid the uncertainties of pay-as-you-go pricing.

When is Pay as You Go most beneficial?

Pay as You Go is ideal for organizations with variable or uncertain cloud needs, those new to cloud services, or those needing flexibility without a long-term commitment.

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Author

  • 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, improving organizational efficiency.

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