6 Key Questions for Buying Oracle Cloud Credits

Introduced in September 2017, Oracle’s Universal Cloud Credits represent a flexible model for buying and consuming Oracle Cloud Services.

Oracle’s Universal Cloud Credits or “UCC” apply to the Platform-as-a-Service (“PaaS”) and Infrastructure-as-a-Service (“IaaS”) offerings from Oracle. Each of these has eligible services, including Analytics (data visualization), Database Integration (GoldenGate), and Data Management (Database) services for PaaS, and Compute (various types of bare metal offerings and load balancing) and Network (FastConnect) services for IaaS.

While Oracle’s Cloud Infrastructure (“OCI”) offers many different services, many organizations will want to start with a carefully chosen application to understand the machinations of the OCI: how it performs, how well it works within the organization’s environment, how it is managed, and much more.

Once vetted, the services could then be expanded. And this is where UCC comes into play. Per Oracle, organizations “gain the ability to switch the PaaS or IaaS services… without having to notify Oracle.” In other words, once the commitment has been made, unused monthly amounts can be allotted for services that are not currently in use.

For example, if an organization subscribes to Oracle Cloud Infrastructure – Database Enterprise Edition – High I/O, but is not using the entire committed monthly amount, it could easily experiment with Oracle MySQL Cloud Service or Oracle Big Data Cloud Service. Once the evaluation ends and the organization no longer uses the products, the credits would no longer be applied to them.

But there are some important questions the organization should consider when planning a UCC based Oracle Cloud investment.

1. How Do I Avoid Underutilization?

When the committed rate is under-utilized, the remainder is non-refundable and cannot be carried over to a subsequent month. The forfeiture of these dollars ought to give pause to the organization about which applications might be transitioned to the Oracle Cloud (or newly developed there) and whether there is cyclical usage to the application. For example, retail applications during the mid-November through early January period would likely see a higher degree of usage than in the summer months.

2. When do Overages Apply?

Overages – that is, when the usage exceeds the commitment rate – are charged at Pay-As-You-Go or “PAYGO” rates. For PaaS, these rates are 50% higher. That same is true when the Commitment Service Period ends. Unless renewed, the use of the services are automatically charged at the PAYGO rates.

3. What is the Rate Card (Discount) Schedule?

The rate card schedule, often referred to as the discount schedule, does not translate into a lower cost. The value proposition is additional capacity. In other words, for the full, committed spend, the organization is granted additional use privileges based on the amount and length of the commitment. For example, an organization commits to $35,000 in monthly credits and will commit to two (2) years. Per the rate card schedule, this entitles the organization to 20% additional capacity or $7,000 per month, totaling $42,000 per month. However, this caveat comes with its own caveat: The under-utilization rule remains in effect.

4. Can I BYOL – Bring Your Own License?

IaaS and PaaS support a Bring-Your-Own-License or “BYOL” construct. So the licenses that would be used on-premise can retain their value by using them for Cloud Services. However, the quantity and type of licenses (e.g., eight [8] Processor licenses) must be sufficient for the Oracle Cloud deployment and be actively covered by support. In addition, the organization would no longer be allowed to use those same licenses for on-premise deployments, for the duration of the term of the Cloud Services Commitment Service Period.

5. Are there Any Prerequisites?

Some of Oracle Cloud Services have pre-requisite services that can add to the overall cost. An example is Oracle Security Monitoring and Compliance – Security Monitoring and Analytics Edition, which requires an active subscription of Oracle Management Cloud – Log Analytics Edition. Another example would be Oracle Integration Cloud– Enterprise and Oracle Integration Cloud – Enterprise – BYOL requiring Oracle Database Cloud Service and its underlying dependencies. These pre-requisites will increase the cost.

6. What are the Usage Limitations?

Some of the Oracle Cloud Services impose limitations on usage. For example, Oracle Security and Identity Cloud Services is limited not only to number of active users under your Oracle contract terms but also to ten (10) SMS messages / user / month.

Transitioning a workload to the Oracle Cloud or developing a new Oracle Cloud-based application has many complex factors. Oracle’s Universal Cloud Credits are just one of them. Navigating through the rules around Cloud licensing can be difficult and time-consuming. Doing so with the advice of and Oracle licensing expert can help ease that journey.

Contact Miro and we can help you evaluate if a cloud credit purchase is right for you, or to help you understand your licensing compliance position with Oracle.