In this article, we’ll delve into the intricacies of Oracle ERP Cloud pricing, providing a comprehensive overview of the Oracle Cloud price list to help you make an informed decision for your business.
- Understanding Oracle Fusion Cloud Services Licensing
- Understanding Oracle ERP Cloud Pricing
- What is Oracle SaaS?
- What is Oracle Fusion?
- How much is Oracle ERP Cloud Pricing?
- Oracle Fusion Enterprise Resource Planning (ERP) Cloud Service includes the following products:
- Oracle ERP Cloud Licensed – Hosted Named User
- Oracle Cloud ERP Pricing – A Cloud Pricing Example
- Oracle Fusion Enterprise Resource Planning for Self Service Cloud
- Oracle Cloud ERP Pricing Calculator
- What about Oracle HCM Cloud Pricing?
- What about Oracle Sales Cloud Pricing?
- Step by step guide for building your Oracle ERP Cloud Service
- Negotiating Oracle ERP Cloud
- Common mistakes organizations make when migrating to Oracle ERP Cloud
- FAQ on Oracle ERP Cloud Licensing and Pricing
- How Redress Compliance can help
Introduction to Oracle ERP Cloud – Key Licensing Considerations
When navigating the Oracle ERP Cloud pricing and licensing landscape, it’s essential to keep several key points at the forefront:
- Acquisition and Commitment: Oracle ERP Cloud is typically acquired through a bulk purchase of licenses, usually involving a 3-5 year commitment.
- Base Service Licensing: The base service is licensed on a ‘hosted named user’ basis. Additional fees apply for test and development purposes.
- Understanding Hosted Users: It’s crucial to comprehend the definition of a ‘hosted user’ and identify the additional modules or privileges they may require access to.
- Additional Services: You may need to purchase extra add-on services besides the base service.
- License Management: Proper license management is vital when using Oracle ERP Cloud, as Oracle may conduct audits anytime.
Oracle ERP Cloud is a Software as a Service (SaaS) offering that delivers various business management capabilities, including financial, supply chain, and project management.
Understanding Oracle Fusion Cloud Services Licensing
When it comes to Oracle Fusion Cloud Services, it’s important to grasp the following key points:
- Base Service Purchase: You start by purchasing a base service for all Oracle Fusion Cloud Services. This is typically licensed with a ‘hosted named user’ for ERP.
- Understanding Hosted Users: It’s crucial to comprehend what constitutes a ‘hosted user’. Additionally, you should identify any add-on modules or privileges they may require access to.
- Additional Services: Alongside the base cloud service, you may need to purchase service add-on services.
You can better navigate Oracle Cloud ERP pricing and licensing by understanding these key points. Use the insights from this article to construct your own Oracle cloud pricing calculator.
Understanding Oracle ERP Cloud Pricing
Oracle ERP Cloud pricing is determined by the number of users and the specific cloud services required. Additionally, certain “pre-requisites” must be purchased based on your needs.
Here’s a breakdown:
- Base Pricing: Oracle’s Enterprise Resource Planning (ERP) Cloud service costs $625 per month or $7,500 per year.
- Minimum User Requirement: A minimum of ten users is required for purchase, even if you only need five. This means a base cost of $75,000 per year.
- Contract Duration: A 3-year contract is mandatory, bringing the total cost for the minimum ten users to $225,000 over three years.
- Additional Services: This pricing does not include any additional services that may be needed.
Let’s consider a larger-scale example:
Cost for 1000 users for five years of Oracle’s ERP Cloud service:
- Without any discount: The cost would be $3,125,000. This is calculated by multiplying the monthly cost of $625 by the number of users (1000) and then by the number of years (5) in the contract.
- With a 40% discount: The cost for 1000 users for five years would be $1,875,000. This is calculated by applying a 40% discount to the total cost of $3,125,000.
Remember, this pricing does not include additional add-on services you may need. Always consider your specific requirements when calculating the cost of Oracle’s ERP Cloud service.
Oracle also offers BYOL billing for some of its Oracle PaaS services, enabling them to leverage their existing Oracle software licenses. This is not available for Oracle application customers who wants to move to Oracle Fusion.
What is Oracle SaaS?
Oracle Software as a Service (SaaS) is a software delivery model in which software and associated data are hosted remotely and made available to customers over the Internet. SaaS applications are typically accessed through a web browser, and are managed and maintained by the SaaS provider.
Oracle SaaS is a collection of cloud-based applications offered by Oracle Corporation, including enterprise resource planning (ERP), customer relationship management (CRM), and human capital management (HCM) solutions.
What is Oracle Fusion?
Oracle Fusion is a set of cloud-based applications from Oracle Corporation that combines various enterprise software products, including enterprise resource planning (ERP), customer relationship management (CRM), and human capital management (HCM) solutions.
Oracle Fusion ERP provides a comprehensive suite of financial management, supply chain management, and project portfolio management capabilities.
- Oracle Fusion HCM is a cloud-based solution that provides tools for managing human resources, including recruiting, onboarding, benefits administration, and performance management.
- Oracle Fusion SCM (Supply Chain Management) is a cloud-based solution that provides tools for managing the entire supply chain process, from sourcing and procurement to manufacturing and logistics.
- Oracle Fusion PPM (Project Portfolio Management) is a cloud-based solution that provides tools for managing projects, including project planning, tracking, and reporting.
- Oracle Fusion CRM (Customer Relationship Management) is a cloud-based solution that provides tools for managing customer interactions, including marketing, sales, and customer service.
- Oracle Fusion Governance, Risk and Compliance (GRC) is a cloud-based solution that helps organizations to manage their governance, risk, and compliance activities.
- Oracle Fusion Financials is a cloud-based solution for managing financial processes, such as accounting, financial planning, and analysis.
- Oracle Fusion Procurement is a cloud-based solution for managing the procurement process, from sourcing to invoice processing.
- Oracle Fusion Project Management is a cloud-based solution for managing project and resource management, time and expense tracking, and portfolio management.
- Oracle Fusion Manufacturing is a cloud-based solution for managing the entire manufacturing process, from design and engineering to production and quality control.
How much is Oracle ERP Cloud Pricing?
If you’re exploring ERP solutions and are curious about the costs, it’s worth considering the advantages of cloud-based ERP. Oracle ERP Cloud, in particular, offers several benefits, including reduced upfront licensing costs and ongoing maintenance fees.
- Competitive Pricing: Oracle ERP Cloud’s pricing is competitive with the on-premises version of Oracle E-Business Suite.
- Cost Efficiency: According to a Nucleus Research study, the initial costs of on-premises ERP were 2.4 times higher than cloud-based ERP. By 2020, it’s estimated that around 60% of large enterprises will transition to cloud deployments.
- Accessibility: The cloud-based nature of Oracle ERP Cloud allows you to access it anytime, anywhere, with an internet connection. Unlike on-premises Oracle EBS, which requires significant IT time for installation and configuration, cloud-based ERP is easy to install and accessible from any device.
- Flexibility: Many organizations appreciate the system’s accessibility from anywhere, including mobile devices. This is particularly valuable for companies that require flexible work schedules.
- Scalability: Cloud-based software solutions enable companies to expand rapidly without the expense of purchasing new hardware or software. Cloud-based ERP also allows for multiple modules on the same platform, eliminating the need for an in-house installation.
- Security: As it is hosted in the cloud, security is a top priority for Oracle ERP Cloud.
Oracle Fusion Enterprise Resource Planning (ERP) Cloud Service includes the following products:
- Financials Cloud Service
- Fusion Financial Reports Center Cloud Service
- Advanced Collections Cloud Service
- Revenue Management Cloud Service
- Grants Management Cloud Service
The service also includes several project-related services:
- Project Contract Billing Cloud Service
- Project Financials Cloud Service
- Project Management Cloud Service
Additional services include:
- Automated Invoice Processing: Please note, this requires the purchase of the WebCenter Forms Recognition Service (hosted 1000 records).
- Fusion Transactional Business Intelligence Cloud Service: This is limited to this service only.
Oracle ERP Cloud Licensed – Hosted Named User
Hosted Named User: is defined as an individual authorized by you to access the hosted service, regardless of whether the individual is actively accessing the hosted service at any given time. Hosted Named Users may include Business Network Administrators, Endorsing Trading Partners, and Participating Trading Partners.
This means that you need to license
- You need to license any individual who have access to Oracle ERP cloud service, not only active users, but users who may no longer use it but still have access will require a license.
- Avoid granting users the right to Cloud ERP if they do not need the access.
Oracle Cloud ERP Pricing – A Cloud Pricing Example
The Oracle Fusion Enterprise Resource Planning (ERP) Cloud Service has the following pricing structure:
- Monthly Cost: The service costs $625 per month. This translates to an annual price of $7,500.
- Minimum Purchase: Oracle requires a minimum purchase of 10 users. This is the case even if you only have 5 users. Therefore, the minimum annual cost for 10 users is 10 x $7,500 = $75,000.
- Contract Duration: Oracle requires a 3-year contract. This means the total cost over the 3-year period is 3 x $75,000 = $225,000.
Please note, this pricing only covers the ERP Cloud Service. Any add-on services that you might need would be additional costs.
Oracle Fusion Enterprise Resource Planning for self-service and other ERP services?
Oracle Fusion Enterprise Resource Planning cloud service, is the base service that you need to license to use other cloud services. For example, The self-service cloud service.
Oracle Fusion Enterprise Resource Planning for Self Service Cloud
The Oracle Fusion Enterprise Resource Planning for Self Service Cloud includes the following features:
- Bill Management: This feature is included in the package.
- Fusion Expenses Cloud Service: This service is part of the Self Service Cloud.
- Fusion Project Resource Management Cloud Service: This service is included for managing project resources.
- Restricted Use Talent Management Base Cloud Service: This is a restricted use service for talent management.
- Fusion Task Management Cloud Service: This service is included for task management.
- Fusion Time and Labor for Project Cloud Service: This service is included for time and labor management in projects.
However, it’s important to note that the Self Service Cloud Service cannot be purchased as a standalone product. You must also purchase the Planning Cloud Service.
Please pay attention that Fusion Time and labor functionality does not include the HCM time and labor functionality.
Oracle Cloud ERP Pricing Calculator
You have sixty users who need Oracle Fusion Enterprise Planning cloud service and then you have 10 users who need the self-service cloud service.
You will then need to purchase following ERP cloud service licenses:
- 60x Fusion Enterprise Planning Cloud service – 60 x 7500 = $ 450 000 (1 year cloud service)
- 10x Self Service Cloud Service 10 x 240 = 2400 (1 year cloud service)
- Remember that Oracle contract length is 3 years.
You can read more about pricing in Oracle Fusion price list.
What about Oracle HCM Cloud Pricing?
Oracle HCM pricing works very much like Oracle Cloud ERP pricing. You purchase a base cloud service then additional services based upon your requirements.
It is very easy for companies to purchase the wrong number of cloud services for Oracle HCM because they misunderstand the licensing rules. You can read more about this Oracle HCM Pricing and Licensing.
What about Oracle Sales Cloud Pricing?
Oracle Sales Cloud comes in different editions and they dont use a base service the same way as Oracle ERP cloud or HCM Cloud. Instead you choose the edition based upon your requirements.
There are a few got-chas that we cover in Oracle Fusion Sales and Service Cloud – Pricing and Licensing
Step by step guide for building your Oracle ERP Cloud Service
Building an Oracle ERP cloud service can be a complex process, but by following these steps, you can ensure a smooth and successful implementation.
- Identify business requirements The first step in building an Oracle ERP cloud service is to determine your specific business requirements. Understand the functionality you need and map it to the appropriate cloud service offered by Oracle. This will help you to select the right solution for your organization and ensure that you have the necessary features and capabilities to support your business operations.
- Study Oracle cloud licensing Once you have identified the appropriate cloud service, it is important to understand the licensing requirements for that service. Oracle has specific definitions for what constitutes a license, and it is important to understand these definitions in order to purchase the correct number of licenses.
- Check for prerequisites Before implementing your chosen cloud service, it is important to check if there are any additional cloud services that are required as prerequisites. This will ensure that you have all the necessary components in place to run the cloud service smoothly.
- Determine the number of non-prod environments Another important consideration is the number of non-production environments that are included with your chosen cloud service. Determine how many of these environments you will need in order to be compliant with your organization’s policies and procedures.
- Negotiate the cloud contract Finally, it is important to negotiate the cloud contract to ensure that you minimize spend and avoid overpaying. Be sure to review the contract in detail and negotiate any necessary changes before signing.
By following these steps, you can ensure that you have a clear understanding of your business requirements, have the correct licenses in place, and have negotiated a cost-effective contract. This will help to ensure a smooth and successful implementation of your Oracle ERP cloud service.
Negotiating Oracle ERP Cloud
Step-by-step guide for negotiating Oracle Cloud ERP contracts:
- Determine your specific business requirements independently of Oracle. Understand the functionality you need and map it to the appropriate cloud service offered by Oracle. This will help you to select the right solution for your organization and ensure that you have the necessary features and capabilities to support your business operations.
- Research pricing and licensing options for Oracle ERP Cloud. Familiarize yourself with the pricing model and licensing requirements to understand what you will be paying for.
- Avoid sharing too much information with Oracle. Sharing too much information about your organization’s requirements and budget can limit your ability to negotiate competitive pricing. Be prepared to negotiate with Oracle using market research and other competitive scenarios.
- Review the contract in detail. Make sure you understand all of the terms and conditions of the contract before signing. Ask questions and seek clarification on any areas that are unclear or vague.
- Negotiate any necessary changes to the contract. If you identify areas of concern or if there are clauses in the contract that you would like to negotiate, be prepared to discuss these with your Oracle representative.
- Be prepared to walk away. If you are unable to reach a mutually beneficial agreement with Oracle, be prepared to walk away. It may be possible to negotiate a better deal with a different vendor or explore alternative solutions that better meet your needs.
- Look for discounts and promotions. Oracle may offer discounts and promotions for volume purchases or longer contract commitments. It’s important to discuss pricing options with an Oracle representative to determine if any discounts are available.
- Consider working with a third-party negotiator. If you are not comfortable negotiating with Oracle on your own, consider working with a third-party negotiator who can help you navigate the negotiation process and ensure that you get the best deal possible.
Common mistakes organizations make when migrating to Oracle ERP Cloud
We have helped hundreds of companies worldwide with Oracle Cloud ERP licensing and contract negotiations. Our expertise in this area can help organizations avoid common mistakes and ensure they get the best possible pricing and licensing agreement. Here are the list of common mistakes that organizations make.
- Buying services they don’t need: One common mistake is for organizations to purchase cloud services they won’t need or implement until much later. This can lead to unnecessary expenses and lower or remove pre-approved discounts when trying to terminate unused services.
- Purchasing unused cloud services: Another common mistake is purchasing cloud services that won’t be used at all. This can lead to wasted resources and higher costs.
- Not understanding the hidden costs: Organizations may overlook hidden costs in non-production environments and data transfers. This can lead to unexpected expenses and negatively impact the budget.
- Failing to negotiate the contract: Organizations may not fully understand the licensing model and fail to negotiate the contract effectively. This can lead to paying for more than what they actually need and limit their ability to negotiate better pricing.
FAQ on Oracle ERP Cloud Licensing and Pricing
How Redress Compliance can help
Oracle ERP Cloud Optimization Service
- Licensing review: Our team can review your current licensing agreements and identify opportunities for optimization or negotiation of better terms. We have in-depth knowledge of Oracle SaaS licensing and can advise on the best options for your business.
- Optimization: Once you are on the Oracle Fusion ERP Cloud, we can help you optimize your usage to maximize the value of your investment. This may involve identifying ways to reduce the number of licenses required or finding more cost-effective solutions.
- Negotiation assistance: If you are entering into a new licensing agreement with Oracle, we can support you in the negotiation process. We can help you understand the terms and conditions of the agreement and secure the best deal possible. Our objective is to help your business fully benefit from the Oracle Fusion ERP Cloud by providing expert guidance and support throughout the migration and licensing process. Contact us today for more information.
- About the Author
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Fredrik Filipsson possesses 20 years of experience in Oracle license management. Having worked at Oracle for 9 years, he gained an additional 11 years of expertise in Oracle license consulting projects. Fredrik has provided assistance to over 150 organizations worldwide, ranging in size and tackling various Oracle licensing challenges, including Licensing Assessments, Oracle audits, Oracle ULAs, and more.