Oracle HCM Cloud Pricing and Licensing – Summary
- Oracle HCM cloud is licensed per module.
- Each module has its own 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 per month.
- 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 HCM Cloud Licensing Models
- Oracle Fusion Human Capital Management Cloud Service Options
- Oracle HCM Cloud Pricing Calculator
- Oracle HCM Cloud Negotiation
- How Redress Compliance Can Help
Oracle HCM Cloud Pricing and Licensing
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 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
- < 10,000 hosted employees are required to purchase at least 1 additional Test Environment for Oracle Fusion Cloud service.
- 10-000-50 000 hosted employees are required to purchase at least (3) additional test environment for Oracle Fusion Cloud Service.
- 50 000+ hosted employees must purchase at least 4 additional test environment 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.
- 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.
Oracle Fusion Human Capital Management Cloud Service Options
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 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 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:
- 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 you it will be $ 540 000 + 108 000 = $ 648 000
Oracle HCM Cloud Negotiation
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
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 to evaluate your current and future requirements, so you can make informed decisions about your licensing needs.
Our license optimization service will help you to minimize your costs while ensuring that you have the right modules and features to support your business. We’ll also provide ongoing support to help you manage your license costs effectively over time.
- 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.