Oracle Cloud Infrastructure (OCI) is:
- Cloud Computing Platform: Provided by Oracle Corporation, it includes a comprehensive set of infrastructure services.
- Supports Diverse Applications: Enables the building and running of a wide range of applications in a scalable, secure, highly available, and high-performance environment.
- Infrastructure Services: Offers services such as computing power, storage, networking, and database management for deploying and managing cloud workloads.
- Performance and Cost-Effective: Matches the performance and control of enterprise data centers with the cost savings of public clouds.
- Scalable and Highly Available: Designed to meet the demands of modern businesses, offering options for existing workloads and cloud-native app development.
- Cross-Cloud Connectivity: In partnership with Microsoft, OCI provides unique cross-cloud solutions that enhance the functionality of multi-tier applications.
Oracle Cloud Infrastructure (OCI)
Oracle Cloud Infrastructure (OCI) is Oracle’s public cloud platform, offering a comprehensive set of infrastructure and platform services across more than 50 global regions.
It provides on-demand computing power, storage, networking, databases, and many other services for enterprises looking to run workloads in the cloud.
OCI is engineered for high performance and security, designed to support both cloud-native applications and the migration of traditional on-premises systems.
In this article, we’ll give an overview of OCI’s technical features and dive into its licensing implications – including Oracle’s unique licensing models like Bring Your Own License (BYOL) and Universal Credits (UCM) – as well as discuss regions, support options, pricing considerations, and common use cases such as on-premises migrations and disaster recovery.
OCI Technical Overview and Services
OCI offers Infrastructure-as-a-Service (IaaS) capabilities, including virtual machines, bare metal servers, block and object storage, and networking, along with Platform-as-a-Service (PaaS) offerings such as managed databases, middleware, analytics, and AI services.
In total, OCI provides over 100 cloud services that span compute, storage, networking, databases, analytics, AI/ML, security, and more. Key components of OCI include:
- Compute Services: OCI allows provisioning of Virtual Machine instances and Bare Metal servers for flexible compute capacity. You can choose a CPU architecture (Intel, AMD, or ARM) and scale the shape to the exact number of OCPUs (Oracle CPUs) and memory needed, avoiding overprovisioning. OCI’s OCPU concept roughly equates to a physical CPU core with hyperthreading (two vCPUs). Compute instances are billed per OCPU-hour, and OCI’s pricing for compute is notably low (about 50% less than comparable providers’ rates, according to Oracle).
- Storage Services: OCI offers durable storage options, including Block Volumes (block storage for virtual machines), Object Storage (for unstructured data and backups), and File Storage. Storage costs are also competitive – for example, Object Storage Costs around $0.025 per GB per month in many regions. Data egress (outbound transfer) is generous: OCI includes 10 TB of free outbound data transfer per month, far more than most clouds.
- Networking: OCI’s networking offers virtual cloud networks (VCNs), load balancers, and various connectivity options, including FastConnect for private links. Network egress beyond the free tier is priced up to 10× lower than some competitors, which can significantly reduce costs for data-intensive applications.
- Database and Platform Services: As Oracle’s cloud, OCI offers robust database services. This includes Oracle Database cloud services (from standard VMs with Oracle Database to Autonomous Database services), as well as other platforms such as Oracle Exadata Cloud Service, MySQL HeatWave, and Java Cloud. Many of these have License-Included options (where the cloud service fee includes the Oracle software license) or BYOL (bring your own license) options, which we’ll explore shortly. Oracle’s middleware, such as WebLogic, and analytics tools are also available as managed services on OCI.
- Global Regions: OCI is truly global, with data centers located across North America, Europe, the Asia-Pacific region, Latin America, and the Middle East. Oracle currently operates dozens of public cloud regions (approximately 50 as of 2024) in more than 25 countries, and all regions offer a consistent catalog of over 150 services. This means enterprises can deploy applications in various locales to meet latency and data sovereignty requirements, without worrying about certain services being missing in some regions. Additionally, pricing is consistent across all OCI public regions – a departure from other clouds that charge different rates per region.
OCI’s architecture emphasizes high availability and isolation. Each region may contain multiple Availability Domains (separate data centers) or at least Fault Domains to distribute resources for resiliency.
Oracle also offers specialized deployments, such as Dedicated Region Cloud@Customer (where Oracle installs an OCI region in the customer’s data center) and Sovereign Cloud, for stricter compliance. However, these have unique considerations beyond the scope of this overview.
OCI Pricing Models and Universal Credits (UCM)
Oracle’s cloud pricing approach combines pay-as-you-go flexibility with prepaid credit options that offer discounts. OCI services can be consumed under two primary models:
- Pay-As-You-Go (PAYG): You simply pay for what you use each month, with no long-term commitment. This is the most flexible model – resources are metered hourly (or per usage unit), and you receive a monthly bill. It’s great for short-term projects or unpredictable workloads, albeit at the full list prices.
- Universal Credits Model (UCM): This is a subscription model where you commit to spending a certain amount on OCI over a period, in exchange for discounted rates. Oracle offers both Annual Universal Credits and Monthly Flex options:
- Annual Universal Credits: You commit to an upfront annual spend (minimum 12 months). You’re billed in advance for a pool of credits, which you can use on any OCI IaaS/PaaS services throughout the year. Unused credits at the end expire (use-it-or-lose-it). The advantage is a significantly lower effective rate – Oracle typically offers a sizable discount (Oracle has advertised approximately 66% of the PAYG cost, meaning roughly a one-third savings) for committing annually.
- Monthly Universal Credits (Monthly Flex): Similar to the annual option, but you commit to a fixed spend each month for a 12-month term (this option requires Oracle approval). You’re billed monthly for the commitment, and any usage beyond the monthly credit is billed as overage. This model also provides discounted ratesas well, and unused credits don’t carry over to the next month.
- Always Free Tier: It’s worth mentioning OCI’s free tier – Oracle provides certain resources free forever (like small VM instances, autonomous database with limited CPU/size, block storage, etc.) and a 30-day free trial with credits While not exactly a pricing “model,” it allows organizations to experiment at no cost.
Support costs in OCI are included in the service pricing, which is a notable difference from competitors. Oracle doesn’t add a separate percentage fee for standard cloud support – if you run production workloads, you automatically get enterprise-grade support for no extra charge. (In contrast, other major clouds might charge anywhere from 3-10% of your spend for business support levels.) This means the sticker price of OCI services already covers technical support for issues, which SAM managers should factor into cost comparisons.
Oracle has also introduced Oracle Support Rewards as a financial incentive: for every $1 you spend on OCI, you can earn up to $0.25–$0.33 in credits to reduce your on-premises Oracle support bills.
In essence, heavy OCI usage can lower your Oracle maintenance costs for database and middleware licenses on-prem, potentially even offsetting them entirely. This program is available to customers with Oracle technology license support who use OCI under UCM agreements.
For example, if a company spends $ 100,000 on OCI, they might accrue $ 25,000–$ 33,000 in Support Rewards, which can be applied to reduce their annual support renewal fees – a significant savings for enterprises carrying large Oracle support contracts.
OCI Licensing Models: BYOL vs License-Included
A critical aspect for SAM and licensing professionals is understanding how Oracle software licensing works in OCI.
Oracle offers two main licensing approaches for software running on OCI services:
- Bring Your Own License (BYOL): If you already own Oracle software licenses with active support, you can deploy the equivalent Oracle service on OCI at a reduced cost without repurchasing a new license. OCI services, such as Oracle Database and WebLogic, have BYOL pricing tiers. For instance, launching an Oracle Database instance on OCI lets you specify “BYOL,” indicating that you will cover the database license with your existing on-premises license entitlements. The cloud service then charges you only for the infrastructure or a lower rate for the DB service. BYOL is very attractive because it avoids double payment for licenses you already own, as long as you maintain support for them. Oracle’s rules require that the BYOL licenses you bring are equivalent to the cloud service (e.g., you must own Oracle Database Enterprise Edition licenses if you want to BYOL to an Enterprise Edition cloud database). Oracle provides guidance and even tooling in OCI to help track BYOL deployments. For example, OCI’s License Manager service can monitor your usage and ensure you have enough licenses allocated for what you run.
- License-Included (Oracle-Provided License): If you don’t have a license, you can use Oracle software in OCI on a license-included basis, meaning the cost of the Oracle license is included in the hourly rate of the service. This is essentially a “pay-as-you-go” licensing model. For example, Oracle Autonomous Database offers a license-included price per OCPU per hour, or a cheaper BYOL price if you bring your license. Many Oracle PaaS offerings have these two pricing options. The license-included option is simpler (no need to track entitlements), but it’s more expensive in cloud fees. Organizations with existing investments in Oracle technology will typically prefer BYOL to maximize those investments. Organizations without licenses might choose license-included options for flexibility.
One advantage of OCI for Oracle workloads is that Oracle’s standard core factor licensing is inherently accounted for. In authorized third-party clouds like AWS or Azure, Oracle licenses are required per vCPU, with certain counting conventions (often 2 vCPUs = one license for Enterprise Edition databases). OCI uses the concept of OCPUs (where 1 OCPU equals two vCPUs with hyperthreading) and generally aligns one Oracle license with one OCPU.
Effectively, OCI does not penalize you with extra licensing beyond on-prem requirements – for example, 1 Oracle EE Database license covers 2 OCPUs (which equals two cores, four vCPUs) on OCI, the same ratio as on-prem, and Oracle may even automatically apply core factors so your licenses go a bit further.
This is an important consideration: Oracle treats OCI as its “home turf,” so all Oracle software is fully supported and optimized on OCI without special licensing carve-outs. You don’t need to consult an “authorized cloud policy” for OCI (that policy applies to AWS, Azure, and GCP) – any Oracle product is allowed on OCI, just as if it were on-premises, subject to the normal license terms.
It’s worth noting that OCI’s License Manager and BYOL automation can simplify compliance but do not remove customer responsibility. Oracle will not actively prevent you from using features beyond your license – it’s up to the customer to ensure they have the proper entitlements for whatever they deploy.
For instance, if you BYOL an Oracle Database Enterprise Edition license to OCI, Oracle allows you to enable additional options or packs (such as Data Masking and Diagnostic Pack) in the cloud environment, even if those would require separate licenses on-premises. Oracle has indicated that some advanced features, such as data masking and Real Application Testing, are included at no extra cost when you use Enterprise Edition on OCI, which is a benefit of migrating to OCI.
However, if you use BYOL, you must ensure that you own licenses for any options not included for free, or you risk a shortfall. The License Manager tool will track your usage and send reports or notifications, but compliance remains your responsibility. SAM managers should thus treat OCI like an extension of their data center in terms of license governance, implementing monitoring, and maintaining records of which on-premises licenses are allocated for cloud use.
Common OCI Use Cases and Licensing Implications
Because OCI is a full-featured cloud platform, organizations are leveraging it in various scenarios. Here we outline two common use cases – migrating existing workloads to OCI and using OCI for disaster recovery – with their licensing considerations.
Migrating On-Premises Workloads to OCI
One of the primary drivers of OCI is the migration of existing Oracle-based workloads from on-premises data centers to the cloud. This could include Oracle databases, Oracle applications (such as E-Business Suite or PeopleSoft), or custom apps running on Oracle middleware, or even non-Oracle technology.
OCI’s infrastructure is optimized for Oracle software, meaning performance can often meet or exceed on-premises levels. Oracle also provides specialized services, such as Exadata Cloud@Customer or Autonomous Database, for high-end needs.
Licensing Implications: For SAM professionals, a migration project involves mapping current on-premises licenses to cloud usage. Oracle generally allows customers to port their licenses to OCI (Bring Your Own License, BYOL) without additional license fees, as long as support remains active. This can significantly reduce the cost of running those workloads in the cloud.
For example, if a company has 8 processor licenses of Oracle Database Enterprise Edition on-prem (with perhaps Partitioning and Diagnostics packs), they could bring those licenses to OCI and run an equivalent database on a VM or Autonomous Database service.
OCI’s interface would let them designate the deployment as BYOL and even indicate how many licenses are consumed. Oracle sales often encourage this BYOL approach by pointing out that you don’t pay twice for the same capability, and the cloud infrastructure itself is all you need to pay for. In many cases, using BYOL in OCI can cut database cloud costs by 30-50% compared to license-included pricing, because the license component is removed.
There are a few caveats to consider:
- License Matching: Ensure the on-prem license edition and options match what you plan to use in OCI. Suppose you want to use an Autonomous Database, which includes all tuning and management features. In that case, you need the corresponding license type (usually Enterprise Edition with all necessary options) for BYOL, or use the license-included rate.
- Counting Cores: Understand OCI’s OCPU counting. If the on-prem environment was virtualized, you might have been using Oracle’s hard partitioning or soft partitioning rules. In OCI, you’ll allocate OCPUs and need to have enough licenses to cover them (1 license per 2 vCPUs for Enterprise Edition, etc.). The good news is that OCI’s counting is straightforward and aligned with on-premises formulas, so there’s no hidden multiplier as long as you configure it properly.
- Tooling: Use OCI’s License Manager or other SAM tools to track license consumption in OCI. This ensures that if you decommission an on-prem system and move it to the cloud, you don’t accidentally count the license in two places. License Manager can show you how many licenses your OCI services require and help avoid compliance drift.
- Support Contracts: When migrating, keep your Oracle support agreements in place. BYOL on OCI requires that licenses are under active support. The advantage is that you continue to receive Oracle Support, which now also covers cloud usage. Additionally, your OCI spend will earn Support Rewards credits, which can help lower your support renewal costs later.
Example: A global retailer migrated its e-commerce application stack (Oracle Database, WebLogic Server, and custom Java apps) from an on-premises data center to OCI. They had four processor licenses for Oracle DB EE and four for WebLogic Enterprise.
By using BYOL for an Oracle Database Cloud Service and WebLogic on OCI compute instances, they avoided purchasing new licenses in the cloud. They configured 8 OCPUs for the DB (covering it with their 4 DB licenses, since 1 license covers 2 OCPUs on OCI). They also took advantage of an Annual Universal Credits deal for OCI, getting discounted rates on the VM, storage, and network costs.
This migration not only improved their system’s performance and scalability, but from a licensing perspective, it was also cost-efficient: the only ongoing costs were OCI consumption and their existing support, which was partially offset by Support Rewards credits.
The SAM team carefully documented that those four database licenses are now allocated to OCI and are no longer running on-premises, maintaining compliance.
Disaster Recovery (DR) and Backup in OCI
Another prevalent use case is leveraging OCI as a disaster recovery site or backup environment for on-prem systems. Instead of investing in a secondary physical data center, companies can use Oracle’s cloud to host standby databases, backup data, or even full replica environments, which can be used in the event of an outage at the primary site.
OCI’s global regions and secure network connectivity (VPN/FastConnect) make it feasible to continuously ship backups or even real-time data replication to the cloud.
Licensing Implications: Oracle’s licensing rules for disaster recovery can be nuanced. A key policy to know is Oracle’s “10-day rule” for failover environments: Oracle permits customers to run a passive failover instance of their software on an unlicensed server for up to 10 separate days per year.
This means that if you have a DR database in OCI that is normally shut down, you can activate it during an outage or DR test without needing to immediately procure a full license, as long as usage does not exceed 10 days in total per calendar year.
In practice, if your DR strategy is to keep an OCI instance powered off and only launch it during an emergency (or periodic testing), you may avoid having to license it continuously. However, any longer usage or a permanently running standby would require proper licensing.
For example, an enterprise might set up an Oracle Database in OCI as a Data Guard standby for their on-prem production DB. If the standby is constantly applying archives (open in read-only mode or in recovery mode), Oracle typically considers this active usage and requires a license.
However, if the standby is configured but shut down (in a cold standby state), it will only be started during a failover, and the 10-day rule may apply. SAM managers must carefully document the DR design. If it’s a cold standby, track any days of activation (for tests or actual failover) and ensure they stay within the allowance.
If it’s a hot standby, include those resources in your license count or consider scaling down (e.g., a smaller, continuously running instance, which you can then scale up during a failover – OCI’s flexibility can assist here).
Also, consider OCI features like automated backup to Object Storage: backups of Oracle databases in OCI do not require separate licensing (they are just data at rest). Using OCI as a backup target for on-premises databases is straightforward – you only pay for storage and data transfer, not any database licenses. For non-Oracle workloads, DR in OCI follows those vendors’ licensing rules (e.g., if you run SQL Server in an OCI VM for DR, you would apply Microsoft’s license mobility or failover rights).
Example: A financial services company uses OCI as a disaster recovery (DR) site for a critical on-premises Oracle database. They maintain a copy of the database on OCI, but keep it powered off except during quarterly DR tests. In those tests, they activate the OCI database for 2 days each time, then shut it down, totaling ~8 days of usage per year, within Oracle’s failover allowance.
Because of this setup, they did not purchase an extra DB license for the DR copy. They did, however, bring your license (BYOL) for an Oracle WebLogic Server instance that runs 24/7 in OCI as a minor application server, supporting disaster recovery (DR) operations. Since that server is always on, BYOL was required.
The cost of using OCI for DR was mostly for storage of backups and minimal compute hours, a fraction of what it would be to build a full second data center. The SAM team keeps records of each failover test’s duration to ensure compliance with the 10-day rule, and they are prepared to procure licenses if the DR system ever needs to run beyond the grace period.
Support and Management Considerations
Running workloads on OCI introduces new management considerations for SAM professionals:
- Tracking Cloud Usage: Leverage OCI’s native License Manager and monitoring tools to get reports on license consumption. Oracle also provides audit logs and usage reports. This data is useful to reconcile with your entitlement counts.
- Staying Compliant: Remember that Oracle can see cloud usage. All OCI consumption is recorded, and Oracle’s internal teams have access to that information. While Oracle’s cloud contract doesn’t typically involve audits in the same way as on-prem licenses, if you’re flagrantly out of compliance (e.g., using more software in BYOL mode than you own), it could come up during account reviews. It’s best practice to self-audit and use OCI’s tools to stay within compliance.
- Understanding Contracts: The cloud subscription (UCM or PAYG) is separate from your on-prem license agreements. Ensure you understand the terms – for example, a Universal Credits contract may have a committed spend and an end date for any unused credits. Align this with project plans to avoid wasted budget.
- Support Expectations: Oracle’s inclusion of support means you can open service requests for any issues with OCI services. However, support for software in BYOL scenarios might be split: Oracle will support the cloud infrastructure and the software (since you have support on it), but you should still track which CSI (Customer Support Identifier) those licenses come from in case you need to log an SR for, say, database performance. In general, OCI simplifies support by being a one-stop shop for Oracle environments.
Recommendations
- Map Your Licenses Before OCI Deployment: Before moving any Oracle workload to OCI, inventory your existing licenses and match them to the cloud services (e.g., Database Edition, options). This ensures that you choose the correct BYOL or license-included model and remain compliant from the start. Use Oracle’s core factor guidance for OCI to determine the number of licenses needed for a given OCPU allocation.
- Leverage BYOL to Maximize Value: Use Bring Your Own License wherever possible if you have existing entitlements – it can drastically lower cloud costs. Ensure those licenses stay on active support to qualify. Track which licenses have been moved to OCI to prevent dual use.
- Consider Universal Credits for Cost Savings: If your organization plans to use OCI steadily or in significant amounts, evaluate an Annual UCM agreement. The upfront commitment can yield around 30–35% cost savings compared to pay-as-you-go. Just be careful to right-size the commitment to avoid wastage of prepaid credits. For unpredictable workloads, start with PAYG and then negotiate a UCM once your usage patterns become more stable.
- Take Advantage of Support Rewards: Register for Oracle Support Rewards and apply those credits. Many organizations leave this benefit on the table. Every $1 on OCI can save you 25–33 cents on your on-premises support bills, reducing your overall IT spend. Coordinate with your procurement or licensing team to apply those credits when your support renewal is due.
- Use OCI Tools for Governance: Enable OCI License Manager to automatically monitor BYOL deployments and generate compliance reports. Additionally, use tagging and configuration management to label OCI resources with license information (e.g., tag a VM with “Oracle DB BYOL – 2 licenses”). This will help SAM teams keep cloud assets in sync with license allocations.
- Plan DR Licensing Strategically: If OCI is part of your disaster recovery plan, architect it in a license-efficient way. Consider cold standby instances that fall under the 10-day rule, and document any failover usage carefully if high availability requires a running secondary, factor that into your license needs or explore whether downsized HA instances can reduce license counts.
- Stay Informed on Oracle Cloud Policies: Oracle’s cloud services and licensing policies continue to evolve. Keep up with Oracle’s announcements and documentation for changes in BYOL rules, new services (which could introduce new licensing considerations), or changes to programs like Support Rewards. Regularly reviewing resources from Oracle and consulting a trusted licensing advisor will help you proactively adjust your SAM strategies for OCI.
FAQ
- How is OCI different from Oracle?
OCI, or Oracle Cloud Infrastructure, is part of Oracle’s extensive suite of services, with a specific focus on cloud services and infrastructure. Oracle is a larger entity offering various software and hardware products, including databases, applications, and enterprise IT solutions. - How is OCI different from AWS?
OCI and AWS (Amazon Web Services) are cloud service providers, but their core strengths and offerings differ. AWS has a broader global reach, a more extensive range of services, and a larger customer base. OCI, however, offers deep integration with Oracle’s database and applications, potentially offering better performance and cost-effectiveness for Oracle-based solutions. - What is Oracle OIC?
Oracle Integration Cloud (OIC) is a cloud service offered by Oracle that provides capabilities for integrating various cloud and on-premise applications, automating business processes, and developing web and mobile applications. - What are the three types of Oracle Cloud?
The three types of Oracle Cloud are:- Oracle Cloud Infrastructure (OCI) for IaaS (Infrastructure as a Service).
- Oracle Cloud Applications (OCA), also known as Oracle SaaS (Software as a Service).
- Oracle Cloud Platform (OCP) for PaaS (Platform as a Service).
- Why is OCI better than AWS?
OCI may be better than AWS for specific use cases, particularly for businesses heavily invested in Oracle databases and applications. It offers optimized performance and pricing for these products, emphasizing strong network performance and security features. - Is Oracle Cloud cheaper than AWS?
The cost comparison between Oracle Cloud and AWS can vary depending on the specific services and usage patterns. In some cases, Oracle Cloud may offer more competitive pricing, especially for Oracle-centric workloads. - Why is OCI better than Azure?
OCI’s advantages over Azure may include better integration with Oracle’s suite of products, potentially lower costs for Oracle workloads, and specific technological features like network performance and security. However, the better choice depends on the organization’s needs and existing infrastructure. - Who uses Oracle OCI?
Oracle OCI is used by various businesses from various sectors, especially those with existing Oracle databases and application investments. This includes large enterprises, government organizations, and companies in industries like finance, healthcare, and retail. - Is Oracle or AWS better?
Whether Oracle (OCI) or AWS is better depends on specific business needs, existing infrastructure, and the nature of the workloads. AWS offers a broader range of services and a larger ecosystem, while OCI provides deep integration and optimization for Oracle products. - What are the disadvantages of Oracle Cloud?
Oracle Cloud may have disadvantages, including a smaller global footprint than AWS and Azure, potentially higher complexity in certain configurations, and a learning curve for users unfamiliar with Oracle’s environment. - Why migrate Oracle Database to OCI?
Migrating Oracle Database to OCI can offer several benefits, including improved performance, lower costs, easier scalability, enhanced security, and better integration with other Oracle cloud services.
