Introduction to Oracle Universal Credits for Cloud

At our organization, we have helped hundreds of companies navigate the complexities of Oracle Universal Credits and optimize their cloud consumption.

A summary of this article:

• Oracle Universal Credits (UCs) is a program that allows customers to purchase cloud credits that can be used across Oracle’s entire portfolio of cloud services.
  
  
• There are two models of purchasing Oracle Cloud Credits: Annual Oracle Universal Credits and Pay as You Go.
  
  
• Annual Oracle Universal Credits require an annual commitment to Oracle and provide a discounted rate. In contrast, the Pay as You Go model does not require any commitment, and payments are made monthly.
  
  
• Oracle BYOL (Bring Your License) allows customers to use their existing supported Oracle technology licenses on the Oracle Cloud.
  
  
• The Annual Universal Credits model enables customers to have the flexibility to use any Oracle Cloud Infrastructure and platform service at any time and in any place.
  
  
• This program can help customers scale their cloud usage as their business needs change over time, and it’s essential to review and understand the cost-effective way of moving to Oracle Cloud, whether leveraging existing software licenses or purchasing Oracle UCs.

What is 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, while the Pay as You Go model, does not require any commitment, and payments are made monthly.

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

How does Oracle UC work?

In the Oracle Universal Cloud Credits program, customers can choose the Annual Universal Credits model, which allows them to commit upfront to an annual pool of funds or credits that can be used for future usage of eligible Oracle Cloud Infrastructure and platform services.

The flexibility of this model enables customers to use any Oracle Cloud service at any time and place. Additionally, this model provides cost savings on all the cloud services offered by Oracle.

Two different contract models for Oracle UCC

• The Annual-Flex Oracle Universal Credits model requires an annual commitment to Oracle, in which customers receive a discounted rate and have 12 months to burn down the credits. Any unused credits will be forfeited. Invoicing is done in advance for the 12 months, and the credits can be used towards Oracle cloud infrastructure and platform services, including database, middleware, and computing. This model is best for companies that have independently reviewed their utilization of Oracle cloud, as relying on Oracle’s assessment of credit requirements often leads to overestimations.
  

• On the other hand, the Pay as You Go model does not require any commitment, and payments are made on a monthly basis. This model can be used towards Oracle Cloud Infrastructure or platform services, and customers only pay for what they consume; however, pricing is higher than the annual commitment. This model is best for companies that are uncertain about their commitments to Oracle cloud and need to deploy or test Oracle cloud before making an annual commitment.

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

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

Compare Annual Flex with Pay as You Go

Comparison of the two models of purchasing Oracle Cloud credits:

• Annual-Flex Oracle Universal Credits
  • Requires an annual commitment to Oracle
  • Receive a discounted rate
  • 12 months to burn down the credits
  • Any unused credits will be forfeited.
  • Invoicing is done in advance for 12 months.
  • Credits can be used towards Oracle cloud infrastructure and platform services, including database, middleware, and compute
  • Best for companies that have independently reviewed their utilization of Oracle cloud
  • Read our Universal Cloud Credits Negotiation guide.
    
    

• Pay as You Go
  • No commitment required
  • Payments are made monthly.
  • It can be used for Oracle Cloud Infrastructure or platform services.
  • Only pay for what you consume/use.
  • Pricing is higher than the annual commitment.
  • Best for companies that are uncertain about their commitments to Oracle cloud and need to deploy or test Oracle cloud before making an annual commitment.
    

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), it’s crucial to evaluate your current Oracle technology licenses and usage. 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 1 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.

FAQ on Oracle Universal Credit

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 is a beneficial choice for 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

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. It provides flexibility, cost control, and the ability to align cloud services with evolving business needs.

A pay-as-you-go contract model with Oracle allows organizations to purchase cloud services monthly with no upfront commitment required.

Need Expert Help? Optimize Your Oracle Cloud Infrastructure

The Oracle OCI Optimization Service offers a comprehensive solution to help organizations optimize their usage of Oracle Cloud Infrastructure (OCI) services. 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 actual 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 the decision-making process, helping you choose between an annual flex model or a pay-as-you-go model based on your organization’s unique needs and goals.
   
   

Our service includes the following components:

• Assessment of Current Cloud Consumption: We will evaluate your existing cloud usage patterns and analyze your future needs to provide a comprehensive understanding of your cloud consumption.
  
  
• Recommendation for Cost-Effective Contract Models: Our team will provide expert recommendations on the most cost-effective contract model that aligns with your usage patterns and business objectives.
  
  
• Contract Design and Implementation: We will assist you in designing and implementing a cloud contract that optimizes cost savings and ensures you have the necessary resources to support your business operations.
  
  
• Ongoing Monitoring and Support: We offer continuous monitoring and support to ensure your cloud contract remains efficient over time. If adjustments are needed as your business needs evolve, we will help you make the necessary changes.

Partner with us to leverage our expertise and optimize your Oracle Cloud Infrastructure, maximizing cost savings and aligning your cloud usage with your organization’s objectives. Contact us today to book an meeting.