CIO Playbook: Oracle Cloud and On-Prem License Portfolio Management
Executive Summary
CIOs overseeing Oracle environments must balance legacy on-premises licenses with modern cloud subscriptions to optimize cost and agility.
This playbook provides a strategic approach for managing Oracle software across hybrid deployments, including on-premises, Oracle Cloud Infrastructure (OCI), Oracle Cloud@Customer, and Oracle SaaS (Fusion Applications).
CIOs should evaluate which workloads are best kept on-premises rather than moved to Oracle’s cloud services, build a balanced license portfolio that spans both perpetual and cloud models, and leverage Oracle programs (e.g., Bring Your License and Universal Cloud Credits) to maximize value.
Key recommendations include aligning workload placement with business and regulatory requirements, utilizing flexible licensing options to avoid double-paying for software, and implementing strong governance to remain audit-compliant in a hybrid model.
The result is a licensing strategy that reduces the total cost of ownership, improves flexibility, and ensures compliance as the enterprise transitions toward cloud services.
Background and Licensing Landscape
Oracle’s licensing landscape has evolved from traditional on-premises contracts to a mix of on-prem and cloud-based models. On-premises Oracle software, such as databases and middleware, is typically sold as perpetual licenses, often measured by the number of processor cores (using Oracle’s core factor) or by the number of named users. Enterprises pay large upfront fees and ongoing annual support to run software on their hardware indefinitely.
In contrast, Oracle Cloud services use subscription models. For example, OCI (Oracle’s public cloud) charges for compute and database services on an hourly or monthly basis, with costs depending on CPU usage (measured in Oracle CPUs or OCPUs) and whether the subscription includes a software license.
Oracle Fusion SaaS applications (such as ERP and HCM) are delivered as cloud subscriptions, typically on a per-user or per-module basis, with no on-premises software deployment.
Recently, Oracle introduced programs to help customers bridge on-prem and cloud investments. A cornerstone is Bring Your License (BYOL), which allows organizations to apply their existing on-premise Oracle licenses to equivalent Oracle Cloud services. BYOL provides license mobility—customers can move a license from on-premises to the cloud and back to on-premises if needed, rather than purchasing new licenses for cloud deployments.
This enables true hybrid flexibility, as workloads can migrate to OCI or Oracle Cloud@Customer without forfeiting prior license investments. Oracle’s cloud metrics are designed to align with on-premises licensing. For instance, one Oracle Processor license (the standard on-premises metric for a CPU core) covers two OCPUs in Oracle Cloud Infrastructure (OCI).
In effect, the same license that covers two physical cores on-premises can cover two virtual cores (OCPUs) in Oracle Cloud, maintaining parity and making the transition easier.
Another key development is Oracle’s Universal Credits model. This purchasing program allows customers to buy a pool of cloud credits for use across any OCI services, including compute, database, storage, and more. Universal Credits provide flexibility to scale usage up or down across different services without needing separate fixed subscriptions.
This unified consumption model is well-suited for hybrid environments where resource needs can change. Organizations can shift spending between on-premises and cloud as workloads migrate, using cloud credits for OCI or Oracle Cloud@Customer deployments.
Oracle has also launched Support Rewards as an incentive: customers earn credits against their on-prem support fees based on OCI usage, effectively reducing support costs by 25% (or 33% for ULA customers) for every dollar spent on Oracle Cloud. Together, these programs (BYOL, Universal Credits, Support Rewards) encourage enterprises to integrate cloud into their Oracle strategy by making hybrid licensing more cost-effective.
Meanwhile, Oracle Cloud@Customer has emerged as a solution for those needing cloud capabilities on-premises. With Cloud@Customer, Oracle installs cloud infrastructure (e.g., Exadata Cloud@Customer or an Oracle Dedicated Region) inside the customer’s data center, but the services are billed as cloud subscriptions. This model addresses use cases where data residency, strict compliance, or ultra-low latency demand keep workloads on-prem.
However, the organization still wants the cloud’s consumption model and Oracle’s managed infrastructure. Licensing for Oracle Cloud@Customer follows a cloud subscription approach. Customers typically subscribe to capacity (e.g., a certain number of compute nodes or database OCPUs) on a term basis, such as a multi-year subscription, rather than buying hardware or perpetual software licenses.
Oracle also allows BYOL on Cloud@Customer, meaning clients can apply existing databases or other licenses to reduce subscription costs – but this must be explicitly agreed upon and aligned with Oracle’s terms. In essence, Cloud@Customer extends Oracle’s cloud licensing into the customer’s facility, blending on-prem control with cloud economics.
Hybrid licensing complexity:
In a global enterprise, it’s common to have a mix of legacy systems running on-premises under perpetual licenses, custom or commercial applications on OCI VMs or databases, Oracle-managed platforms such as Autonomous Database, either in OCI or Cloud@Customer, and SaaS applications like Oracle Fusion.
Each of these has different licensing metrics and contracts. Physical cores might use on-premises databases, whereas an Autonomous Database on OCI is billed by OCPU hours, and user counts are billed as a SaaS service. Managing this portfolio requires understanding how these models interact with each other.
For example, moving an Oracle E-Business Suite ERP system to Oracle Fusion SaaS means switching from a CPU/user-based perpetual license to a subscription-per-user model, with implications for the cost and status of the old licenses, which may be retired or repurposed. Similarly, shifting a custom application’s Oracle Database from on-prem to OCI could involve converting that database’s licenses to BYOL on OCI or purchasing a new cloud subscription.
The overall landscape is one where CIOs must continuously evaluate where each Oracle workload runs best (on-prem, OCI public cloud, Cloud@Customer, or SaaS) and how to license it optimally. Oracle’s licensing and cloud programs offer multiple pathways, but each has its trade-offs in terms of cost, flexibility, and management effort. The following sections explore those models and trade-offs, then provide strategic guidance for navigating hybrid Oracle licensing.
Key Hybrid Licensing Models and Tradeoffs
Achieving the right balance in an Oracle license portfolio starts with understanding the available models and their trade-offs.
In a hybrid environment, CIOs will encounter four primary licensing approaches: perpetual on-premises licenses, OCI/Cloud subscriptions (which include licenses), OCI/Cloud with Bring Your Own License (BYOL), Cloud@Customer, and SaaS subscriptions. Each model has distinct cost structures and operational implications.
Below, we outline these models and compare their benefits and drawbacks in hybrid use:
- On-premises perpetual licensing: This traditional model involves a one-time purchase of software licenses (often a significant capital expense) and annual support fees, typically around 20-22% of the license cost. The enterprise owns the rights to run the software indefinitely on its infrastructure. Trade-offs: Perpetual licenses give you complete control over deployment and upgrades and can be cost-efficient over a long horizon if fully utilized. Many organizations have incurred substantial sunk costs in their Oracle license inventories. However, on-prem licenses tie up capital and require the company to maintain hardware and manage the software environment. Scaling up requires procuring additional licenses (and possibly hardware), which can be a slow and expensive process. If a licensed software instance is retired or underused, that investment may become “shelfware.” In a hybrid context, perpetual licenses are best for steady-state workloads that run 24/7 and have consistent demand, where the upfront cost can be amortized and the environment doesn’t benefit significantly from cloud elasticity.
- Oracle Cloud Subscription (License-Included): In this model, the company does not use its licenses – it simply subscribes to an Oracle Cloud service that includes the software license in the hourly or monthly rate. For example, an Oracle Database Cloud Service on OCI can be provisioned as “license-included,” meaning the pricing covers the database software license and support within the cloud service fee. Trade-offs: The license-included model is purely OPEX – you pay for what you use, when you use it, with no large upfront purchase. This makes it ideal for organizations or projects that lack existing licenses or a capital budget. It’s also well-suited for short-term, experimental, or variable workloads because you can spin resources up and down without long-term commitments. If a project lasts only 6 months, using license-included cloud resources means you avoid purchasing perpetual licenses that would outlive the project. Similarly, highly seasonal workloads can be handled by scaling out in the cloud with license-included instances during peak periods. Scaling back – you only incur the higher software cost during the peak, instead of owning extra licenses that sit idle off-peak. Another benefit is simplified management and compliance: Oracle takes care of licensing within the service, so there’s no risk of accidentally deploying more cores than licensed or using unlicensed features – the cloud service inherently ensures compliance. The downside is cost: license-included rates are significantly higher than BYOL rates because you’re essentially “renting” the Oracle license. Over a long duration of steady usage, this can become more expensive than owning a license. You also don’t build equity – once you stop paying, you have no licensed asset. Thus, pure subscription is financially efficient for short or fluctuating usage, but not for multi-year stable workloads.
- Bring Your License (BYOL) to Cloud: BYOL is a hybrid model where you apply an existing on-premises Oracle license to an Oracle Cloud service. When provisioning an OCI service (database, WebLogic, etc.), you choose a BYOL option, which lowers the cloud service charge because you’re contributing the license. You continue to pay your on-prem support for that license, but you are not charged for the Oracle software in the cloud – effectively, you pay “hardware and management” cloud fees only. Trade-offs: BYOL maximizes the value of your prior investments. If you already own Oracle licenses that are under support, moving those workloads to OCI under BYOL avoids the need to pay for licenses twice. Oracle’s pricing makes BYOL very attractive for heavy use: BYOL cloud service rates can be 80 %+ lower than license-included rates for the same compute capacity. This means moving a stable, 24/7 workload to OCI with BYOL can dramatically cut running costs compared to subscribing with a license-included. Over a multi-year period, utilizing BYOL will usually yield a lower total cost of ownership than paying high hourly subscription fees. BYOL also gives flexibility – since you own the license, you can potentially repatriate the workload on-prem or even use it in another authorized cloud environment if needed, which a cloud-only subscription wouldn’t allow. However, BYOL requires that you maintain your support contract and carefully track license usage. You must ensure the cloud deployment doesn’t exceed your entitlements (OCI helps by indicating how many licenses are needed for a given deployment). Also, BYOL is only beneficial if you indeed have spare or transferable licenses; if you would have to buy a new license to use BYOL, it becomes a large upfront decision. In practice, enterprises often adopt a mix: using BYOL for base-load production systems that run constantly, and license-included instances for burst capacity or temporary development environments. This hybrid approach leverages BYOL savings for steady needs while keeping agility for transient needs. The key trade-off is management overhead – BYOL requires good license governance (keeping track of which licenses are deployed where), whereas license-included is hands-off in this regard.
- Oracle Cloud@Customer: Cloud@Customer is Oracle’s answer for customers who need cloud benefits on-premises. The subscription to Cloud@Customer includes Oracle-managed infrastructure installed in your data center, and it may also include software licenses, depending on the service. For instance, Exadata Cloud@Customer can be purchased as a license-included option (where you pay for Exadata hardware and Oracle Database licenses as a service) or BYOL (where you use your database licenses on the Exadata service for a lower fee). Trade-offs: Cloud@Customer offers parity with Oracle Cloud, using the same technology and subscription model, but with data locality on your premises. It is ideal for regulatory, data sovereignty, or latency-sensitive workloads that cannot be sent to a public cloud data center. From a licensing perspective, Cloud@Customer can simplify audits in the sense that it’s an Oracle-delivered service – you’ll have a cloud contract covering the capacity. It also offers license mobility: Oracle confirms that BYOL licenses can be moved to and from Cloud@Customer, just like OCI. The major consideration is cost and commitment. Cloud@Customer typically requires a substantial subscription commitment, such as a minimum term and capacity purchase, and is suited for large, long-term workloads. You avoid capital expense on hardware, but you commit to a cloud-like OPEX model on-prem. If you have existing licenses, BYOL can reduce Cloud@Customer costs, but you will still pay for the managed service portion. In summary, Cloud@Customer fits into a hybrid strategy when certain workloads must remain on-prem for strategic reasons, but you want to modernize your infrastructure and licensing model. It becomes part of your portfolio as a strategic asset for specific use cases, while standard workloads might reside in OCI or remain on traditional on-prem servers.
- Oracle SaaS (Fusion Applications): Oracle’s Fusion Cloud applications, including Cloud ERP, HCM, SCM, and CX suites, employ a different licensing model – software as a service. Here, the enterprise doesn’t manage the software environment at all; they subscribe to the application on a per-user or usage basis. For CIOs, the main licensing consideration is the contractual terms of subscriptions (such as the number of users and enabled modules) rather than technical metrics like CPU count. Trade-offs: SaaS can significantly reduce internal IT overhead and ensure you’re always on the latest version, but it may come with less flexibility for customization compared to on-prem solutions. In terms of license portfolio, moving to SaaS means you may retire on-premises licenses (and stop paying support for them) for the equivalent functionality, reallocating that budget to SaaS subscriptions. This can simplify the portfolio (fewer Oracle products to track), but CIOs should plan the timing carefully – for example, avoiding paying support and SaaS fees for the same capability concurrently. Additionally, Oracle offers programs like Customer 2 Cloud to help customers transition from on-premises apps (such as E-Business Suite or PeopleSoft) to Fusion SaaS, potentially allowing some credit from existing licenses or support contracts toward the SaaS fees. The CIO needs to weigh the benefits of SaaS (agility, reduced infrastructure, automatic updates) against the loss of a perpetual asset and potential challenges in data migration and change management. From a licensing strategy perspective, Oracle SaaS is usually considered when on-prem applications approach upgrade cycles or when the business is ready to standardize processes to Oracle’s cloud standards.
Summary of Trade-offs: Perpetual on-prem licenses offer control and long-term value but lack flexibility; cloud subscriptions offer flexibility and ease but can become pricey if used for long durations or large scale; BYOL hybrids aim to get the best of both by cutting cloud costs using owned licenses, though they require management effort; Cloud@Customer addresses specialized needs at a premium; and SaaS transforms the model entirely to one of service consumption.
A balanced hybrid strategy often means using each model where it fits best – for example, keep certain high-performance or sensitive systems on optimized on-prem or Cloud@Customer setups, shift development, testing, and elastic workloads to OCI using a combination of BYOL and on-demand instances, and migrate commoditized business capabilities to SaaS to offload maintenance.
The next section provides strategic recommendations on how to make these decisions and manage the portfolio coherently.
Strategic Recommendations
1. Align Workload Placement with Business and Risk Requirements:
Evaluate each Oracle workload (database or application) against criteria such as performance needs, integration dependencies, customization, data sensitivity, and regulatory compliance.
Keep workloads on-premises (or on Cloud@Customer) if they require ultra-low latency with on-site systems, have sensitive data that cannot leave your data center, or rely on technical architectures not easily supported in the cloud (e.g., very specific configurations or older versions).
Conversely, consider moving workloads to OCI if they would benefit from cloud scalability, if demand is unpredictable, or if you want to avoid future hardware refresh costs. For enterprise applications, assess if moving to Oracle SaaS makes sense – this is usually a business-driven decision to adopt modern cloud functionality and reduce IT overhead.
Maintain a clear decision framework: for example, “Regulated data and latency-critical systems -> Cloud@Customer or stay on-prem; Standard workloads with steady usage -> OCI with BYOL; Seasonal or new experimental workloads -> OCI with license-included; Legacy app being phased out -> keep on-prem for now; Mature business process apps -> evaluate SaaS.” This alignment ensures each Oracle system runs in the environment that best meets its needs and the organization’s risk tolerance.
2. Optimize License Allocation with a Hybrid Portfolio Approach:
Treat your Oracle licenses as a portfolio of assets that can be allocated across on-prem and cloud venues. Start by inventorying all Oracle entitlements (perpetual licenses, cloud subscriptions, and user subscriptions) and mapping them to current usage. Then identify opportunities to rebalance usage for greater efficiency.
For instance, if you have underutilized on-prem database licenses, leverage Oracle’s BYOL program to deploy those in OCI for new workloads instead of buying new licenses or additional cloud subscriptions. Conversely, if you are paying high cloud subscription fees for a stable workload and you can purchase licenses (or have spare ones), consider converting to a Bring Your License (BYOL) deployment to cut costs in the long term.
Mix and match models to avoid one-size-fits-all solutions. An example strategy is to run base production databases on reserved OCI instances using BYOL (to benefit from sunk costs and support rewards), while using license-included Autonomous Databases for short-term analytics projects or burst workloads.
Plan for future-state architecture as well – if the roadmap includes moving some systems to SaaS, anticipate how that will free up or change license needs. A balanced portfolio might mean maintaining a core of perpetual licenses (to ensure negotiating leverage and avoid total dependency on subscriptions), while steadily increasing cloud subscriptions where they make sense both financially and operationally.
Regularly review this mix, especially around Oracle contract renewal cycles, to adjust your entitlements (e.g., dropping support for unused products or converting some on-premises licenses to cloud credits if Oracle offers this option).
3. Leverage BYOL and Oracle’s Hybrid-Friendly Programs:
Make Oracle’s incentive programs work for you. Use BYOL wherever feasible for consistent workloads to achieve cost savings. Each Oracle Processor license you bring to OCI can cover two OCPUs of cloud capacity, and the cloud service rate will be dramatically lower than if you had no license.
Ensure the licenses you bring are equivalent to the cloud service (e.g., Enterprise Edition for an Enterprise DB service) and that you maintain support on them. Utilize Oracle’s Universal Cloud Credits for flexible consumption: this lets you commit spend to Oracle Cloud in exchange for a discount and then allocate that spend dynamically across OCI services (compute, database, even Cloud@Customer usage) as needed. The flexibility of universal credits means you can shift workloads or adjust resource levels without being locked into fixed service quotas, a valuable advantage when managing a hybrid estate with changing demands.
Additionally, take advantage of Oracle Support Rewards – as you ramp up OCI usage, the credits earned can significantly offset your on-prem support costs. This essentially gives a discount on continuing to run what must remain on-prem, funded by your cloud adoption. All these programs (BYOL, credits, rewards) should be factored into your business case and cost models for moving workloads to OCI or Cloud@Customer.
When negotiating with Oracle, seek to include favorable terms such as the ability to transfer cloud credits between Cloud@Customer and OCI, or commitments that preserve your ability to bring your own license (BYOL) in the future.
Combine models strategically – for example, you might negotiate an Oracle ULA (Unlimited License Agreement) for specific products to cover a broad on-premises deployment, while also securing a pool of universal credits to cover new cloud projects.
The key is to ensure each Oracle investment (whether a license purchase or a cloud subscription dollar) is utilized to the fullest extent across your hybrid environment.
4. Manage License Metrics and Compliance Proactively:
Hybrid models introduce complexity in tracking usage against entitlements, so CIOs should enforce strong governance for license management. Establish a single source of truth for Oracle license entitlement and deployments.
This might involve using a Software Asset Management (SAM) tool capable of monitoring Oracle usage on-premises (e.g., tracking installations, options enabled, and CPU counts) and in OCI (Oracle provides tooling in the cloud to declare Bring Your Own License (BYOL) usage and monitor OCPU consumption).
Be mindful of the different licensing metrics: on-prem processor licenses use Oracle’s core factor table – ensure you apply it correctly when calculating needs on physical servers or VMware clusters. In OCI, understand that an OCPU is equivalent to one physical core’s worth of compute (two vCPUs). Oracle’s policy is generally to use two vCPUs per license for Enterprise Edition databases. Keep an eye on cloud usage vs. license grants – if you declare 10 licenses for BYOL in OCI, treat them as 10 processors that should not be used concurrently elsewhere on-premises.
Oracle does allow moving licenses back and forth, but not double usage. To maintain compliance, conduct regular internal audits of Oracle deployments across all environments. For example, audit your OCI tenancy to list all BYOL instances and verify you have sufficient licenses allocated from your on-prem pool.
Similarly, audit on-premises systems to ensure that if some licenses were shifted to the cloud, those on-premises installations were either decommissioned or relicensed. Pay attention to Oracle’s cloud licensing policies – Oracle occasionally updates its rules (such as how to license in VMware or authorized third-party clouds), so have your team or a licensing advisor stay current with the policy documents.
In hybrid scenarios, also train application teams and cloud architects on what they can or cannot do – for instance, preventing use of database options or packs that aren’t licensed, even if technically available in a cloud service, or ensuring that deploying an Oracle VM in Azure adheres to Oracle’s licensing guidelines. Proactive compliance management will prevent unpleasant surprises in an audit and preserve the value of your licenses.
5. Govern SaaS and Cloud Subscriptions as Part of the Portfolio:
It’s easy to focus on technical license metrics, but don’t neglect Oracle SaaS subscriptions in your portfolio management. Assign responsibility for overseeing SaaS usage and subscriptions (number of users, storage consumed, etc.) just as you do for on-prem licenses.
Regularly compare SaaS subscription levels to actual business usage and identify if you have excess capacity, which could potentially be negotiated down at renewal, or if you need to adjust the usage. When migrating from on-premises to SaaS, plan the cutover to avoid overlapping costs and ensure a smooth transition. For example, coordinate the ramp-down of on-premises support payments with the ramp-up of SaaS subscription fees through Oracle’s Customer 2 Cloud program or similar incentives.
Ensure that data from SaaS solutions, such as Fusion ERP, is integrated into your IT asset tracking, so you maintain a holistic view of all Oracle-related expenses. From a strategic perspective, consider SaaS as an opportunity to shed technical debt. Moving to Fusion Applications might allow you to sunset customizations or third-party add-ons, along with their associated licenses and support.
That said, also prepare for SaaS-specific governance: confirm that you have processes in place to remove users who no longer need access (to free up those subscriptions) and to comply with Oracle’s usage terms, such as not using a SaaS account for unauthorized purposes.
By including SaaS in your license portfolio reviews, you can optimize the overall Oracle spend and ensure that, whether it’s infrastructure or applications, every dollar is justified by usage and value.
6. Plan for Contractual and Audit Events in Advance:
Hybrid licensing often spans multiple contracts – you may have Oracle license agreements for on-prem software, cloud subscription agreements for OCI, and perhaps separate contracts for Cloud@Customer and SaaS.
These might come up for renewal at different times. Develop a cohesive negotiation strategy that covers all Oracle engagements. Oracle is in a strong position to bundle offerings (for instance, they might offer discounts on cloud if you renew support, or vice versa).
As a CIO, you can capitalize on this by timing discussions to cover the full picture of your Oracle relationship. For example, if a large on-premises support renewal is approaching, use that as an opportunity to evaluate cloud options: could you reduce some support spend by shifting workloads to OCI using Support Rewards credits? Could you negotiate an expanded Bring Your Own License (BYOL) allowance or an enhancement to your User-Determined Allocation (UDA) that accommodates cloud usage?
It’s advisable to engage with Oracle account management early and provide a clear outline of your hybrid strategy. This helps ensure that any new contracts include the flexibility you need, such as clauses for cloud mobility or locking in current Bring Your Own License (BYOL) conversion rates.
Prepare for Oracle audits as a continuous risk, especially during periods of transition. Oracle’s License Management Services may audit your on-premises use, which can now also extend to checking your cloud usage if you use Bring Your Own License (BYOL).
Being well-documented, with internal audit and monitoring processes in place, will allow you to respond confidently. Also, consider independent license compliance expertise if your environment is especially complex – firms experienced in Oracle audits can help simulate an audit and identify gaps.
The goal is to avoid compliance issues that could disrupt your cloud plans or result in additional fees. By planning contractually and operationally, you turn audits and renewals from reactive firefighting into proactive opportunities to optimize and realign your Oracle license portfolio.
CIO Action Plan: Next Steps
- Discover and Baseline: Inventory all Oracle software deployments across on-premises, OCI/Cloud@Customer, and SaaS. Document the licenses owned (by product, edition, and quantity) and map them to their current locations of use. This baseline will highlight underutilized licenses and areas of potential non-compliance.
- Workload Assessment: Categorize Oracle workloads (databases and applications) by criteria such as criticality, performance needs, compliance requirements, usage volatility, and strategic fit for cloud. Identify which workloads are cloud-ready (can be rehosted or replaced with SaaS) and which should remain on-prem or in a private cloud due to constraints.
- Placement Strategy: For each category, decide the target platform and licensing model. Create a roadmap that may include actions such as migrating certain databases to OCI with Bring Your Own License (BYOL), moving a development environment to OCI with license-included instances, keeping some systems on-premises but consolidating them on efficient infrastructure, and evaluating Fusion Cloud for specific business functions.
- License Reallocation Plan: Develop a plan to reallocate licenses in conjunction with workload changes. For example, determine how many licenses can be freed up from a decommissioned on-prem system to be used in OCI, or which support contracts might be reduced after a SaaS migration. Coordinate changes so you don’t pay twice. If you plan to use BYOL, ensure you have a process to mark those licenses as “assigned to cloud” in your records.
- Engage Oracle and Negotiate: Open a dialogue with your Oracle account team to discuss your hybrid plans. Leverage upcoming renewal dates to seek bundled agreements or discounts (such as a universal credit commitment that also renews support at better terms). Request clarity in writing on BYOL usage rights and any Cloud@Customer specific terms. If you’re moving to SaaS, inquire about transition programs, such as Customer 2 Cloud or legacy support conversion credits. Aim to obtain contractual commitments that support your flexibility (e.g., ability to reduce on-prem support spend proportional to cloud uptake).
- Implement License Management Tools: Put in place tools or processes to continuously track Oracle usage. This could be enabling Oracle’s license tracking features in OCI, deploying Oracle’s LMS scripts regularly on-prem, or using third-party SAM tools specialized for Oracle. Establish a governance board or designate a License Manager role to oversee compliance and optimization for Oracle assets across departments.
- Educate and Communicate: Inform your infrastructure, cloud, and application teams about the hybrid licensing policies. Ensure that cloud architects know when to select BYOL vs. license-included in OCI, and that on-premises DBAs know to request a license from the pool before spinning up a new database instance. Likewise, brief finance and procurement on the new model so they understand cloud bills in the context of license usage (e.g., explaining why support costs may drop as cloud costs rise due to Support Rewards).
- Monitor, Optimize, Repeat: Treat this as an ongoing program. Review cloud consumption and on-prem license usage at regular intervals (monthly cloud cost reviews, quarterly license compliance checks, annual strategic reviews). Adjust allocations as needed – for instance, if a cloud workload grows significantly, consider buying additional licenses to BYOL if that’s cheaper in the long run. If an on-premises system is nearing the end of its life, plan how to use its licenses after retirement. Keep an eye on new Oracle offerings or changes, such as new cloud services, updates to licensing policies, or pricing changes, that could open up opportunities or require adjustments to your strategy.
By following this action plan, CIOs can methodically evolve their Oracle license portfolio, containing costs, avoiding compliance pitfalls, and enabling the business with the right mix of on-prem and cloud capabilities.
This disciplined approach turns Oracle’s licensing complexity into a strategic advantage, allowing IT leaders to deliver value through flexibility and optimized spending.
