Oracle HCM pricing and licensing can be difficult to get your head around. This article is here to help you on your way. Oracle Fusion Human Capital Management Base Cloud Service is a Suite of services that are included, when a customer buys the base Oracle Fusion Human Capital Management Base Cloud Service. The base cloud service is a requirement for starting with Oracle HCM cloud. What is then included in the Base Cloud Service?
Follow our guide to make sure you get your Oracle HCM cloud pricing and licensing correct.
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 also need to license all agents, contractors, consultants, or any individual who is tracked by the Oracle HCM programs regardless of if they use Oracle HCM or not.
Additional requirements and prerequisites
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.
Oracle Fusion Human Capital Management Base Cloud service is $ 15 a month.
Minimum purchase is one thousand employee users and minimum contract term is 3 years.
This means even if you only need two hundred employees, you need to purchase minimum one thousand.
You do not need to have the same number of hosted employees on your service options, as you need on the base cloud service.
Fusion Dynamic Skill Cloud service is licensed, per hosted employee and a pre-requisite is that you also purchase a license for the HCM Base cloud service. The license price for Dynamic Skill is 3 USD per employee, and you need minimum 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:
Transition & Shelving of existing on premises software licenses.
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 during a transition period to not pay for your on-premises software maintenance. It is also important to keep your on-premises software licenses if you one day want to move away from Oracle Fusion.
When negotiating with Oracle, Oracle want you to commit start your cloud services as early as possible. A common mistake I have seen is that companies have signed Fusion contracts for multiple years and only in yr2 gone live with their Fusion. It meant that 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.
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 % be as low as possible but pay attention that it is ONLY valid you keep the same number of users and services. If you reduce the numbers of cloud users, the renewal cap is not valid. That is why its important to not “over-buy” cloud users. It’s more wise to make a smaller purchase and then buy additional users over-time.
Successor Cloud Products
You want to prevent the vendor from bundling / discontinuing some Fusion cloud services during your contract period. Oracle has already done so in 2019, Oracle then decided to bundle multiple Fusion cloud services into a more expensive bundle. This resulted in a price-hike for some companies who simply wanted one specific service. But they were then told its part of a bigger bundle with multiple cloud services. This contract term is there to prevent this from happening in the future.
Oracle can with this term provide flexibility in case 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 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.
If you want to have pre-negotiated discount levels for additional purchase. Oracle is often very willing to grant this. However, there are minor details that needs to be negotiated such as the length and the minimum purchase.
Cloud user definitions
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 usage that might not fall into Oracle standard cloud user category, this needs to be negotiated with Oracle before moving to Oracle Fusion Cloud
Uncertain about your cloud license requirement?
If you are a current Fusion HCM, ERP or SCM customer and want to optimize your cloud spend and prepare for your cloud renewal.
We can help you understand your usage and allow you to start the negotiation fully informed of what cloud user licenses that you should renew.
Contact us to know more in detail how we can support you.
If you need further assistance, Redress can help you with
Understand what cloud products you need to purchase, if you are an existing Oracle EBS customer, we can help you map your current on-premises usage with the right cloud services.
Redress can help you design the cloud agreement making sure that you minimize any waste as you implement Oracle HCM.
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Are you moving to Oracle cloud and need help? We can help you with Oracle HCM pricing and Licensing, If you want to know more about our services, schedule an consultation to discuss in detail how we best support your company in migrating to Oracle HCM or measure your SaaS usage. We have designed a service to help customers to analyze and review Oracle Fusion SaaS usage.