Oracle Universal Cloud Credits and Contract Models

Oracle Universal Cloud Credits and Contract Models

In cloud services, Oracle offers a unique digital cloud currency known as Oracle Universal Cloud Credits. These credits are used to purchase and consume Oracle cloud services. This article will explain the basics of Oracle Universal Cloud Credits and help you decide the suitable cloud contract model for your organization.

What are Oracle Universal Cloud Credits?

Oracle Universal Cloud Credits are a form of digital cloud currency. You pay with traditional currency (dollars, euros, pounds, yen, etc.) to buy these credits, which are used to consume and purchase Oracle cloud services. It's important to note that these credits can only be used to buy compute cloud services, not Oracle SaaS services.

Contract Models: Pay-as-you-go vs. Annual Flex

Oracle offers two different contract models for Universal Cloud Credits: Pay-as-you-go and Annual Flex.

Pay-as-you-go

With the pay-as-you-go model, you do not make any commitment to how much you will spend on Oracle Universal Cloud Credits. You pay monthly for your consumption, either by credit card or invoicing. This model is a good option if you're unsure of how much you will spend on Oracle Cloud, the amount is relatively low, or you're just getting started with Oracle Cloud and uncertain when you will begin to consuming Universal Cloud Credits.

Annual Flex

The Annual Flex model is essentially a prepayment or pre-commitment to Oracle. You make an annual commitment to spend a certain amount every year. The minimum threshold to receive a discount is $100,000 a year. If you're not ready to commit, the pay-as-you-go option might be better.

With Annual Flex, it's important to remember that there's no carryover. You will lose the remaining amount if you do not consume the committed amount by the end of the 12-month period. However, you must make an Annual Flex agreement to avail yourself of Oracle support rewards and other bonuses.

Deciding the Right Cloud Contract Model

To decide the suitable cloud contract model for your organization, you should model and project your OCI consumption and then compare the available contract models. Consider factors like when you will go live, how much you will consume, the size of the instances, whether you have an existing maintenance contract, and whether you will look at support rewards.

In practice, the Annual Flex model can give you a discount for upfront purchases, support rewards if you're an existing Oracle customer and other bonuses. For example, if you purchase Universal Cloud Credits for $50,000 and run a database cloud service instance for one month costing $2,640, you will have $47,360 left for the next month.

However, it's essential to have a tool that can help you project future consumption, monitor your consumption levels, and provide alerts if you are launched to over-consume. This will help you decide when is the right time to switch over to Annual Flex and how much you should commit to it.

In conclusion, understanding Oracle Universal Cloud Credits and the different contract models is essential for optimizing and saving money on your Oracle cloud contracts. Whether moving to Oracle Cloud or a few years into your Oracle Cloud consumption, having the proper knowledge and tools can help you make the best decisions for your organization.

For more information, read our articles on Universal Cloud Credits - which contract model to choose and how to negotiate UC contracts