Oracle cloud

Oracle Universal Credits for Cloud – Direct or Indirect

Oracle Universal Cloud Credits are a flexible and cost-effective way to access Oracle’s cloud services.

Key points include:

  • Purchasing Models: Annual Oracle Universal Credits (with an annual commitment and discounted rate) and Pay as You Go (no commitment, monthly payments).
  • Bring Your Own License (BYOL): Allows use of existing Oracle licenses on Oracle Cloud.
  • Benefits: The annual model offers upfront discounts, and Pay as You Go is beneficial for uncertain or variable cloud needs.
  • Flexibility: Credits can be used for Oracle Cloud services like OCI and PaaS.
  • Exclusions: Cannot be used for Oracle ERP Cloud or other SaaS services.

What are Oracle Universal Credits?

What are Oracle Universal Credits

Oracle Cloud Credits is a program that allows customers to purchase cloud services from Oracle; it offers flexibility and cost savings by allowing customers to pay for cloud services in advance and use the credits as needed.

  • These credits can be used for various services, such as Oracle Cloud Infrastructure (OCI)
  • Oracle Cloud Platform services (PaaS), including computing, storage, networking, and databases.

The program comes in two purchasing models: Annual Oracle Universal Credits and Pay as You Go.

The Annual Oracle Universal Credits require an annual commitment to Oracle and provide a discounted rate. In contrast, the Pay as You Go model requires no commitment, and payments are made monthly.

Oracle UCCs cannot be used for Oracle ERP Cloud or other SaaS services.

Oracle Universal Cloud Credits - Basics

Two different contract models for Oracle UCC

Two different contract models for Oracle UCC

The Oracle Universal Cloud Credits (UCC) program offers two models:

  1. Annual Universal Credits Model:
    • Commitment: Annual upfront commitment for a pool of funds/credits.
    • Usage: Credits can be used for various Oracle Cloud Infrastructure and platform services.
    • Billing: Advance invoicing for 12 months.
    • Flexibility: Credits can be used anytime, anywhere for eligible services.
    • Savings: Provides cost savings on Oracle Cloud services.
    • Expiration: Unused credits are forfeited after 12 months.
  2. Pay as You Go, Model:
    • Commitment: No annual commitment is required.
    • Billing: Monthly payments based on usage.
    • Flexibility: Suitable for uncertain or variable cloud needs.
    • Cost: Higher pricing than yearly commitment, but only for consumed services.

You will negotiate a discount rate for Oracle Cloud services; discounts being offered by Oracle are conservative and range from 0-20%

universal cloud discounts

That discount is then applied to your burn-down rate card.

oracle universal cloud credits

Use existing on-premise licenses for BYOL or buy UCC?

When deciding between Oracle Universal Cloud Credits (UCC) and Oracle Bring Your Own License (BYOL), evaluating your current Oracle technology licenses and usage is crucial.

Here are some key considerations:

  • Oracle BYOL: This option allows you to utilize your existing, supported Oracle technology licenses, such as Oracle Database Enterprise Edition, on the Oracle Cloud. For each supported Enterprise Edition Database, you receive two free Oracle Cloud Platform Units (OCPUs) of Oracle platform service and database. For instance, if you have 100 Oracle Database Enterprise Edition processors and opt for BYOL, you’ll be granted 200 OCPUs of Oracle Database (since one processor equates to 2 OCPUs).
  • Oracle Universal Cloud Credits (UCC): If you don’t have any supported Oracle licenses, UCC offers a pay-as-you-go model. You can purchase cloud credits that can be utilized across Oracle’s entire portfolio of cloud services. Running 200 OCPUs of Oracle Databases of Enterprise Edition would cost approximately $64,000 monthly or $767,000 yearly.
  • Cost Comparison: If you have available licenses and opt for BYOL, you could save approximately $767,000 annually compared to purchasing cloud credit for the Oracle Database Enterprise Edition.
  • Note for Oracle ULA Customers: Oracle’s BYOL FAQ mentions that you cannot count deployments on Oracle Cloud towards your Oracle Unlimited License Agreement (ULA) deployment exit numbers.
Oracle PAYG vs Annual Flex - Advisory

FAQ on Oracle Universal Credit

What are Oracle Universal Credits (UCCs)?

Oracle Universal Cloud Credits (UCs) is a program that allows customers to purchase cloud credits that can be used across Oracle’s entire portfolio of cloud services.

This program provides flexibility and cost savings by allowing customers to pay for cloud services in advance and use the credits as needed.

What are the two models of purchasing Oracle Cloud Credits?

The two models of purchasing Oracle Cloud Credits are Annual Oracle Universal Credits and Pay-as-you-go.

The Annual Oracle Universal Credits require an annual commitment to Oracle and provide a discounted rate. In contrast, the Pay as You Go model requires no commitment, and payments are made monthly.

What is Oracle Bring Your Own License (BYOL)?

Oracle Bring Your Own License (BYOL) allows customers to use their existing supported Oracle technology licenses on the Oracle Cloud. This option can provide cost savings for customers who already own Oracle licenses.

What are the benefits of the Annual Universal Credits model?

You can receive discounts for an upfront commitment of 0-25% based on volume purchases. Second, you qualify for Oracle support rewards and can get 25-33% back from any on-premise maintenance fees.

What is the difference between Annual Oracle Universal Credits and Pay as You Go?

Can I use my existing Oracle technology licenses on the Oracle Cloud?

You can use your existing supported Oracle technology licenses on the Oracle Cloud through the Bring Your License (BYOL) program.

When is the Pay as You Go model beneficial?

The Pay as You Go model benefits organizations with uncertain or variable cloud usage needs, new to cloud services, not ready to make a long-term commitment, or wanting to avoid the uncertainty of an annual commitment.

Can I negotiate a discount rate for Oracle Cloud services?

Yes, customers can negotiate a discount rate for Oracle Cloud services. However, discounts offered by Oracle are typically conservative and range from 0-20%

What is the difference between using existing licenses with BYOL and buying UCCs?

Using BYOL can save you money compared to purchasing UCs if you have supported Oracle licenses. However, if you do not have any supported Oracle licenses, UCs can offer cost savings for cloud services across Oracle’s portfolio.

Who is an annual-flex agreement best suited for?

An annual flex agreement is best suited for organizations that want to lock in a discounted rate for cloud services for the next 12 months, want to take advantage of the cost savings and flexibility offered by an annual commitment while maintaining the flexibility to adjust their usage as needed, and are planning for a large-scale project that requires significant cloud resources.

Who is a pay-as-you-go contract model best suited for?

A pay-as-you-go contract model is best suited for organizations that have uncertain or variable cloud usage needs, are new to cloud services, not ready to make a long-term commitment, want to avoid the uncertainty of an annual commitment, and want to try out different services and pay only for what they use.

What is the minimum Oracle Annual Flex?

1,000 $ a month – 12 months.

What is the minimum term for an Oracle Universal Credit agreement?

12 months.

What is the discounts available for Oracle UCC?

Oracle is very conservative; you can only negotiate discounts for annual-flex agreements, and it is up to 10% for anything below a 1m $ annual commitment. The savings are made by ensuring you do not commit too much, as unspent UCC is the biggest waste.

Understanding Oracle’s Annual Flex Agreement: An Expert’s Perspective

Oracle’s Annual-Flex agreement is a strategic choice for organizations with a clear forecast of their cloud usage needs for the upcoming year. This agreement provides several advantages:

  1. Predictable Budgeting: With an Annual-Flex agreement, organizations can secure a discounted rate for Oracle’s cloud services, allowing them to plan their budget effectively for the next 12 months.
  2. Flexibility: Despite the annual commitment, this agreement offers the flexibility to adjust usage over time without incurring additional costs. This is particularly beneficial for organizations whose needs may evolve throughout the year.
  3. Avoiding Pay-As-You-Go Uncertainties: The Annual-Flex agreement eliminates the uncertainties associated with a pay-as-you-go model, providing a one-time commitment with a clear budget for cloud services for the year.
  4. Access to Oracle’s Entire Cloud Portfolio: The agreement allows organizations to purchase credits that can be used across all of Oracle’s cloud services, offering the flexibility to utilize the services that best meet their needs.
  5. Ideal for Large-Scale Projects: For organizations planning a large-scale project requiring significant cloud resources, the Annual-Flex agreement allows them to purchase the necessary resources in advance at a discounted rate and use them as the project progresses.

In summary, Oracle’s Annual-Flex agreement benefits organizations that clearly understand their cloud usage needs for the next year, offering both cost savings and flexibility.

Expert Advice on Pay As You Go

Expert Advice on Pay As You Go

A pay-as-you-go contract model with Oracle allows organizations to purchase cloud services every month without any upfront commitment.

This model can be advantageous in the following scenarios:

  • Uncertain or Variable Cloud Usage Needs: Organizations with fluctuating cloud usage can benefit from paying only for their services, avoiding additional costs for unused resources.
  • New or Exploratory Cloud Adoption: Organizations new to cloud services or in the early stages of adoption can start with a small-scale approach and gradually scale up as they gain familiarity with the cloud and determine their specific usage requirements.
  • Short-Term Commitment: Organizations not ready to commit to a long-term contract can choose a pay-as-you-go model, allowing them to start with a short-term agreement and have the flexibility to renew or terminate it as needed.
  • Avoidance of Long-Term Commitment Uncertainty: For organizations seeking to avoid the uncertainties associated with long-term commitments, a pay-as-you-go model allows them to make monthly payments without being tied to a fixed-term contract.
  • Exploration of Cloud Services: Organizations unsure of their future cloud service requirements can leverage the pay-as-you-go model to explore different services and only pay for those that align with their needs.

In summary, opting for a pay-as-you-go contract model with Oracle is ideal for organizations with uncertain or variable cloud usage, those new to cloud services, and those not ready to commit to long-term contracts.

Need Expert Help? Optimize Your Oracle Cloud Infrastructure

The Oracle OCI Optimization Service offers a comprehensive solution to help organizations optimize their Oracle Cloud Infrastructure (OCI) services usage.

Our team of experts is ready to assist you in the following ways:

  1. Resizing Your Oracle Cloud Consumption: We will assess your current cloud consumption and identify opportunities for resizing your resources to align with your needs, ensuring cost efficiency.
  2. Designing Cost-Effective Cloud Contracts: Our experts will work closely with you to design the most suitable cloud contract model that maximizes cost savings while meeting your organization’s specific requirements.
  3. Choosing the Right Contract Model: We will guide you through decision-making, helping you choose between an annual flex model or a pay-as-you-go model based on your organization’s unique needs and goals.

Contact us today to get help.

Author

  • Fredrik Filipsson

    Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, enhancing organizational efficiency.

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