Oracle ERP Cloud Pricing – Oracle ERP Cloud Licensing Guide

Introduction to Oracle ERP Cloud Pricing and Licensing

This comprehensive guide delves into the complexities of Oracle ERP Cloud Pricing and Licensing.

This article provides a detailed overview of the Oracle Cloud price list, helping businesses make informed decisions.

Key points to consider include:

• 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.

The article also provides a step-by-step guide for building your Oracle ERP Cloud Service, negotiating Oracle ERP Cloud contracts, and common mistakes organizations make when migrating to Oracle ERP Cloud.

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:

1. Acquisition and Commitment: Oracle ERP Cloud is typically acquired through a bulk purchase of licenses, usually involving a 3-5 year commitment.
   
2. Base Service Licensing: The base service is licensed on a ‘hosted named user’ basis. Additional fees apply for test and development purposes.
   
3. 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.
   
4. Additional Services: You may need to purchase extra add-on services besides the base service.
   
5. 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 essential to grasp the following key points:

1. 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.
   
2. Understanding Hosted Users: Comprehending what constitutes a ‘hosted user.’ Additionally, you should identify any add-on modules or privileges they may require access to.
   
3. 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 “prerequisites” must be purchased based on your needs.

Here’s a breakdown:

1. Base Pricing: Oracle’s Enterprise Resource Planning (ERP) Cloud service costs $625 per month or $7,500 per year.
2. 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.
3. Contract Duration: A 3-year contract is mandatory, bringing the total cost for the minimum ten users to $225,000 over three years.
4. 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: 1000 users for five years would cost $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 unavailable for Oracle application customers who want 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 project management tools, 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.

1. Competitive Pricing: Oracle ERP Cloud’s pricing is competitive with the on-premises version of Oracle E-Business Suite.
   
2. 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.
   
3. 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.
   
4. Flexibility: Many organizations appreciate the system’s accessibility from anywhere, including mobile devices. This is particularly valuable for companies that require flexible work schedules.
   
5. 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.
   
6. 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 has 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 access.

Oracle Cloud ERP Pricing – A Cloud Pricing Example

The Oracle Fusion Enterprise Resource Planning (ERP) Cloud Service has the following pricing structure:

1. Monthly Cost: The service costs $625 per month. This translates to an annual price of $7,500.
   
2. Minimum Purchase: Oracle requires a minimum purchase of 10 users. This is the case even if you only have five users. Therefore, the minimum annual cost for ten users is 10 x $7,500 = $75,000.
   
3. Contract Duration: Oracle requires a 3-year contract. This means the total cost over the three years 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 you must 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 in 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 buy the Planning Cloud Service.

Please note 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 the Oracle Fusion Enterprise Planning cloud service and ten who need the self-service cloud service.

You will then need to purchase the 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’s contract length is three years.

You can read more about pricing in the Oracle Fusion price list.

Step-by-step guide for building your Oracle ERP Cloud Service

Building an Oracle ERP cloud service can be complex, but following these steps can ensure a smooth and successful implementation.

1. Identify business requirements. Determining your business requirements is the first step in building an Oracle ERP cloud service. Understand the functionality you need and map it to the appropriate cloud service Oracle offers. This will help you select the right solution for your organization and ensure you have the necessary features and capabilities to support your business operations.
   
2. Study Oracle cloud licensing. Once you have identified the appropriate cloud service, it is vital to understand its licensing requirements. Oracle has specific definitions for what constitutes a license, and it is crucial to understand these definitions to purchase the correct number of licenses.
   
3. Check for prerequisites Before implementing your chosen cloud service; it is important to check if any additional cloud services are required as prerequisites. This will ensure you have all the components to run the cloud service smoothly.
   
4. Determine the number of non-prod environments. Another important consideration is the number of non-production environments included with your chosen cloud service. Determine how many of these environments you will need to comply with your organization’s policies and procedures.
   
5. Negotiate the cloud contract. Finally, it is crucial to negotiate the cloud contract to ensure that you minimize spend and avoid overpaying. Review the contract in detail and arrange any necessary changes before signing.

By following these steps, you can ensure that you clearly understand your business requirements, have the correct licenses, 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:

1. Determine your specific business requirements independently of Oracle. Understand the functionality you need and map it to the appropriate cloud service Oracle offers. This will help you select the right solution for your organization and ensure you have the necessary features and capabilities to support your business operations.
   
2. Research pricing and licensing options for Oracle ERP Cloud. Familiarize yourself with the pricing model and licensing requirements to understand what you will pay.
   
3. 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.
   
4. Review the contract in detail. Ensure you understand all the contract terms and conditions before signing. Ask questions and seek clarification on any areas that are unclear or vague.
   
5. 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.
   
6. Be prepared to walk away. If you cannot reach a mutually beneficial agreement with Oracle, be prepared to walk away. Negotiating a better deal with a different vendor or exploring alternative solutions that better meet your needs may be possible.
   
7. 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.
   
8. Consider working with a third-party negotiator. If you are uncomfortable negotiating with Oracle, consider working with a third-party negotiator who can help you navigate the negotiation process and ensure you get the best deal possible.

Oracle ERP Cloud vs Competitors

Let’s examine how Oracle ERP Cloud stacks against some of its main competitors.

1. Oracle ERP Cloud vs SAP S/4HANA: SAP S/4HANA is another popular ERP solution, particularly among large enterprises. While both offer comprehensive features, Oracle ERP Cloud stands out with its robust cloud capabilities, user-friendly interface, and intense focus on artificial intelligence and machine learning. SAP S/4HANA, on the other hand, is often praised for its powerful analytics capabilities and flexibility in handling complex business processes.
2. Oracle ERP Cloud vs Microsoft Dynamics 365: Microsoft Dynamics 365 is a strong competitor, known for its seamless integration with other Microsoft products. While Dynamics 365 offers a familiar interface for those accustomed to Microsoft products, Oracle ERP Cloud often wins points for its broader range of capabilities and robust security features.
3. Oracle ERP Cloud vs NetSuite: NetSuite, also owned by Oracle, is often favored by small to mid-sized businesses due to its ease of use and scalability. However, Oracle ERP Cloud offers more advanced features and is better suited to larger businesses with more complex needs.
4. Oracle ERP Cloud vs Workday: Workday is a cloud-based software vendor specializing in human capital and financial management applications. While Workday is recognized for its human resources and finance modules, Oracle ERP Cloud provides a more comprehensive suite of applications, including supply chain and manufacturing modules, making it a more versatile solution.

In conclusion, while Oracle ERP Cloud faces stiff competition, it has robust cloud capabilities, a wide range of features, and a strong focus on security. The best ERP solution depends on a company’s specific needs, size, and the complexity of its operations.

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 get the best pricing and licensing agreement. Here is the list of common mistakes that organizations make.

1. 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 terminating unused services.
   
2. Purchasing unused cloud services: Another common mistake is purchasing cloud services that won’t be used. This can lead to wasted resources and higher costs.
   
3. 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.
   
4. 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 they need and limit their ability to negotiate better pricing.

FAQs 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 optimizing or negotiating 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 reducing the required licenses or finding more cost-effective solutions.
  
• Negotiation assistance: If you enter 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. We aim 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.