Introduction to Oracle HCM Cloud Pricing and Licensing

• Oracle HCM Cloud is licensed per module.
• Each module has its licensing metric that you need to be aware of.
• The Oracle HCM base cloud service is mandatory; additional functionality can be added through HCM cloud service options as add-ons.
• Additional costs may apply for the number of non-prod environments required.
• Be aware of the different modules and their licensing metrics when considering Oracle HCM cloud.
• Additional functionality can be added through add-on options.
• Consider the number of non-prod environments needed and the cost associated with them.
• The Oracle Fusion Human Capital Management Base Cloud service costs $15 monthly.
• A minimum purchase of 1,000 employee users is required to use the service.
• The minimum contract term is three years.
• Most organizations miscalculate the number of licenses required because they misunderstand the “hosted employee license. ”
• The license metric used is “Hosted Employee,” which includes:
  • All full-time, part-time, and temporary employees.
  • All agents, contractors, and consultants who have access, use, or are tracked by the Oracle HCM programs.
• All employees and individuals tracked by the Oracle HCM programs must be licensed, regardless of usage.

Products included in the Fusion Human Capital Management base cloud service

• Oracle Fusion Global Human Resources
• Oracle Fusion Global Absence Management
• Oracle Fusion Benefits
• Oracle Fusion Cash Management (restricted use)
• Oracle Fusion HCM Journeys
• Oracle Fusion Payroll Interface
• Oracle Fusion Onboarding
• Oracle Fusion Workforce Directory Management
• Oracle Fusion Workforce Predictions
• Oracle Fusion Work Life Solutions
• Oracle Fusion Transactional Business Intelligence for
  Human capital Management Cloud service.

Oracle HCM Cloud Licensing Models

License Metric – Hosted Employee

Hosted Employee: is defined as (i) all of your full-time, part-time, temporary employees, and (ii) all of your agents, contractors and consultants where such agents, contractors and consultants have access to, use of, or are tracked by, the programs. The quantity of the licenses required is determined by the number of Hosted Employees and not the actual number of users. In addition, if you elect to outsource any business function(s) to another company, the following must be counted for purposes of determining the number of Hosted Employees: all of that other company’s full-time employees, parttime employees, temporary employees, agents, contractors and consultants that (i) are providing the outsourcing services and (ii) have access to, use of, or are tracked by, the programs.

This means that you need to license

All your full-time, part-time, and temp employees. You must also license all agents, contractors, consultants, or anyone tracked by the Oracle HCM programs, regardless of whether they use Oracle HCM.

Additional requirements and prerequisites

• < 10,000 hosted employees must purchase at least one additional Test Environment for Oracle Fusion Cloud service.
• 10-000-50 000 hosted employees must purchase at least (3) additional test environments for Oracle Fusion Cloud Service.
• 50 000+ hosted employees must purchase at least four additional test environments for Oracle Fusion Cloud service.

Fusion Human Capital Management Cloud Service options do not have to match the number of users of the base service. You do not need to license the entire employee population.

How much does Oracle HCM Base cloud cost?

• Oracle Fusion Human Capital Management Base Cloud service is $ 15 a month.
• The minimum purchase is one thousand employee users, and the minimum contract term is three years.
  This means even if you only need two hundred employees, you must purchase a minimum of one thousand.

Oracle Fusion Human Capital Management Cloud Service Options

You do not need the same number of hosted employees on your service options as you need on the base cloud service.

• Fusion Advanced Human Capital Management Controls Cloud Service
• Fusion Dynamic Skills Cloud Service
• Fusion Human Resources Help Desk Cloud Service
• Fusion Recruiting Cloud Service
• Fusion Workforce Compensation Cloud Service
• Policy Automation for Workers Cloud Service
• Strategic Workforce Planning Cloud Service
• Fusion Workforce Health and Safety Incidents Cloud Service
• Fusion Talent Management Cloud Service
• Fusion Time and Labor Cloud Service
• Fusion Learning Cloud Service

Oracle HCM Cloud Pricing Calculator

Fusion Dynamic Skill Cloud service is licensed per hosted employee, and a pre-requisite is purchasing a license for the HCM Base cloud service. The license price for Dynamic Skill is 3 USD per employee, and you need a minimum of one thousand hosted employees.

For example, if you want to implement Dynamic Skill Cloud service and calculate that you need 3000 hosted employees to cover your usage.

You will then need to purchase the following:

• Oracle Fusion Human Capital Management Base Cloud service – 3000 hosted employees – list price $ 540 000 annually.
• Fusion Dynamic Skill Cloud Service – 3000 hosted employees – list price is $ 108 000 annually. Before discounts it will be $ 540 000 + 108 000 = $ 648 000

Oracle HCM Cloud Negotiation

Transition & Shelving of existing on-premises software licenses.

Why:

When you migrate to Oracle Cloud, there may be a period when you may need to pay for both the cloud services and maintenance for your on-premises software licenses.

Oracle can allow you, during a transition period, to not pay for your on-premises software maintenance. It is also essential to keep your on-premises software licenses if you one day want to move away from Oracle Fusion.

Services delay

Why:

When negotiating with Oracle, Oracle wants you to commit to starting your cloud services as early as possible.

A common mistake is that companies have signed Fusion contracts for multiple years and only in yr2 gone live with their Fusion. They wasted up to 33-50% of their cloud contract value. You need to make sure that the cloud services match your go-live date.

Renewal Cap

Why:

Oracle includes this term in all their Fusion contracts; this is a cap for how much Oracle can increase the renewal price when your current Fusion contract is up for renewal. We, of course, want this % to be as low as possible but pay attention that it is ONLY valid if you keep the same number of users and services.

The renewal cap is invalid if you reduce the number of cloud users. That is why it’s important not to “over-buy” cloud users. It’s wise to make a smaller purchase and buy additional users over time.

Successor Cloud Products

Why:

You want to prevent the vendor from bundling/discontinuing some Fusion cloud services during your contract period.

Oracle already did so in 2019; Oracle then decided to bundle multiple Fusion cloud services into a more expensive bundle. This resulted in a price hike for companies that simply wanted one specific service.

But they were then told it’s part of a bigger bundle with multiple cloud services. This contract term is there to prevent this from happening in the future.

Rebalancing

Why:

With this term, Oracle can provide flexibility if you, during the cloud contract, want to use the cloud services for another cloud service.

For example, if you, during your cloud period, determine that one of the cloud services that you purchased will not be adopted. Instead of wasting that commitment, you may find value in a different Oracle cloud service.

This provides a possibility to avoid wasting that commitment.

Price hold

Why:

If you want to have pre-negotiated discount levels for additional purchases. Oracle is often very willing to grant this. However, minor details need to be negotiated, such as the length and the minimum purchase.

Cloud user definitions

Why:

Please review the cloud user definitions, such as hosted user and hosted employee. This is how you can be out of compliance with Fusion HCM, ERP, and SCM. You should review your existing usage (see this article).

If you have some users that might not fall into Oracle standard cloud user category, this needs to be negotiated with Oracle before moving to Oracle Fusion Cloud.

Oracle HCM Cloud FAQ

How Redress Compliance Can Help

Our Oracle HCM Cloud License Optimization Service will help you to:

• Understand which Oracle HCM Cloud modules you need for your business
• Calculate your licensing requirements and help you optimize them before purchasing.
• Design your cloud contract to minimize overspend
• Negotiate with Oracle to ensure you get the best deal on your licensing
• Provide ongoing support and guidance to help you manage your license costs effectively over time.

Our team of experts will work closely with you to understand your business needs and help you identify the most cost-effective solution for your organization.

We will help you evaluate your current and future requirements to make informed decisions about your licensing needs.

Our license optimization service will help minimize costs while ensuring you have the right modules and features to support your business.

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