cloud

Oracle Universal Credits Negotiation – A Seven-Step Guide

cloud

Oracle Universal Credits Negotiation – A Seven-Step Guide

Oracle Universal Credits Negotiation

  • Understand Needs: Analyze your cloud usage and existing contracts.
  • Research Pricing Models: Compare Pay-as-you-go and Annual Flex.Project Consumption: Use tools to forecast future usage.
  • Leverage Support Rewards: Utilize Oracle’s 25% maintenance rebate.
  • Negotiate Terms: Align contracts with your needs and ask for discounts.
  • Review Thoroughly: Ensure clarity on all contract terms.
  • Monitor Usage: Track consumption and adjust as needed.

Oracle Universal Credits Negotiation – 7 Steps to Negotiating Your Cloud Contract

Successfully negotiating a cloud contract with Oracle involves a thorough understanding of your needs, Oracle’s offerings, and strategic planning.

Here’s a smarter approach with practical tips to ensure you get the best deal possible.

Step 1: Understand Your Needs

Before starting negotiations, deeply analyze your organization’s cloud requirements. Consider:

  • Consumption Estimates: Project the amount of cloud service you will use, the size of the instances, and the timing for going live.
  • Existing Contracts: Evaluate any existing maintenance contracts, as these can influence your negotiation leverage.

Why It Matters: Knowing your precise needs prevents overcommitment and ensures you negotiate for services you will actually use, optimizing cost efficiency.

Step 2: Research Oracle’s Pricing and Contract Models

Gain a comprehensive understanding of Oracle’s pricing structures and contract options:

  • Pay-as-you-go vs. Annual Flex: Understand that the Annual Flex model requires a minimum yearly commitment of $100,000 for discounts.

Why It Matters: Familiarity with Oracle’s pricing models allows you to choose the option that best aligns with your consumption patterns and financial strategy.

Step 3: Model and Project Your OCI Consumption

Utilize forecasting tools to:

  • Project Future Consumption: Anticipate your organization’s cloud usage over time.
  • Monitor Usage: Monitor your actual consumption levels and set up alerts for potential over-consumption.

Why It Matters: Accurate projections help decide the optimal time to switch to an Annual Flex model and the appropriate commitment level, avoiding unnecessary costs.

Step 4: Consider Oracle Support Rewards

If you’re an existing Oracle customer, leverage the Oracle Support Rewards program, which offers:

  • 25% Back: Maintenance fees for every dollar spent on Oracle Cloud services.

Why It Matters: This can significantly offset your maintenance costs, providing additional financial flexibility and reducing overall expenditure.

Step 5: Begin Negotiations

With a clear understanding of your needs and Oracle’s offerings, initiate negotiations:

  • Align Contracts with Needs: Ensure the contract terms reflect your usage patterns.
  • Ask for Discounts: Don’t hesitate to request discounts or additional benefits that align with your consumption forecasts.

Why It Matters: Effective negotiation can lead to better pricing and more favorable terms, directly impacting the return on your cloud investment.

Step 6: Review the Contract Thoroughly

Before signing, meticulously review the contract:

  • Understand Terms and Conditions: Ensure clarity on all aspects of the agreement.
  • Seek Clarification: Ask for detailed explanations if any part of the contract is unclear.

Why It Matters: A thorough contract review prevents misunderstandings and ensures all terms are transparent and acceptable.

Step 7: Monitor Your Consumption Post-Contract

After finalizing the contract, continuously monitor your cloud usage:

  • Track Consumption Levels: Regularly check if your usage aligns with the contracted terms.
  • Adjust as Needed: If you’re over-consuming, consider renegotiating or switching models to better fit your needs.

Why It Matters: Ongoing monitoring helps manage costs effectively and allows for timely adjustments, ensuring sustained alignment with your organization’s evolving requirements.

Final Thoughts: Each organization’s needs are unique. Tailoring these steps to fit your context ensures you secure a cloud contract that optimally supports your business objectives while managing costs efficiently.

FAQs on Oracle Universal Credits

What are Oracle Universal Cloud Credits?

Oracle Universal Cloud Credits are a form of digital cloud currency used to purchase and consume Oracle cloud services.

What contract models are available for Oracle Universal Cloud Credits?

Oracle offers two contract models: Pay-as-you-go and Annual Flex.

What is the Pay-as-you-go model?

With the Pay-as-you-go model, you pay monthly for what you consume without committing to how much you will spend on Oracle Universal Cloud Credits.

What is the Annual Flex model?

The Annual Flex model is a prepayment or pre-commitment to Oracle, where you commit to spending a certain amount annually.

What is the minimum commitment for the Annual Flex model to receive a discount?

The minimum commitment to receive a discount in the Annual Flex model is $100,000 annually.

What happens if I do not consume the committed amount in the Annual Flex model by the end of the 12 months?

You will lose the remaining amount if you do not consume the committed amount by the end of the 12 months.

What is the Oracle Support Rewards program?

The Oracle Support Rewards program reimburses 25% of maintenance costs for every dollar spent on Oracle Cloud.

How can I project my OCI consumption?

You can use a tool that helps you project future consumption, monitor your consumption levels, and provide alerts if you are projected to over-consume.

When should I switch over to the Annual Flex model?

You should switch to the Annual Flex model when your projected consumption reaches a level at which it becomes more cost-effective than the Pay-as-you-go model.

Can I negotiate for discounts or additional benefits in my Oracle Universal Cloud Credits contract?

Yes, you can arrange for discounts or additional benefits in your contract. The goal is to align the contract with your organization’s needs and usage.

What should I consider before starting Oracle Universal Credits Negotiation?

Before starting negotiations, understand your organization’s needs, including how much you will consume, the size of the instances, and when you will go live.

What should I do if I'm over-consuming?

If you’re over-consuming, consider renegotiating your contract or switching to a different model.

What happens if I'm not ready to make a minimum commitment of $100,000 yearly for the Annual Flex model?

The Pay-as-you-go option might be better if you’re not ready to commit.

Can I use Oracle Universal Cloud Credits to purchase Oracle SaaS services?

No, Oracle Universal Cloud Credits can only purchase compute cloud services, not Oracle SaaS services.

Can I switch from the Pay-as-you-go model to the Annual Flex model at any time?

Yes, you can switch from the Pay-as-you-go model to the Annual Flex model when your projected consumption reaches a level where the Annual Flex model becomes more cost-effective.

What are the benefits of the Annual Flex model?

The Annual Flex model can discount upfront purchases and support rewards if you’re an existing Oracle customer, as well as other bonuses.

What are the advantages of the Pay-as-you-go model?

The Pay-as-you-go model is a good option if you’re unsure of how much you will spend on Oracle Cloud, the amount is quite low, or you’re just getting started with Oracle Cloud and are uncertain when you start consuming Universal Cloud Credits.

What should I do before signing an Oracle Universal Cloud Credits contract?

Before signing anything, review the contract thoroughly. Make sure you understand all the terms and conditions. If anything is unclear, ask for clarification.

How can I optimize my Oracle Universal Cloud Credits contract?

To optimize your contract, understand your organization’s specific needs, negotiate a contract that best meets those needs, and continuously monitor your consumption levels. If you’re over-consuming, consider renegotiating your contract or switching to a different model.

Contact us if you need help negotiating with Oracle.

Please enable JavaScript in your browser to complete this form.

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, improving organizational efficiency.

    View all posts